Act of God
An event which is not the fault of any one person. The damage caused by an Act of God can be claimed for, depending on the circumstances.
Assistance
The immediate, practical help to resolve a emergency for which there is cover, e.g. medical, roadside, household, legal and/or trauma assistance.
Average
A policy condition where the amount of a claim payment is reduced proportionately if the insured items are not insured for their full replacement value.
Betterment
Sometimes, after a repair, the property which has been claimed for is put into a better condition than before it was damaged; in these cases, the policyholder can be requested to contribute towards the cost of the claim.
Broker
An "intermediary" who is licensed in terms of the law to provide insurance services to clients.
Buildings Insurance
A policy that covers the cost of repairing/replacing the structure of a house or building, eg walls if damaged by events such as fire, flood etc.
Claim
When a policyholder’s insured goods are damaged or lost, and he/she requests that the goods be repaired or replaced.
Co-Insurance
An arrangement that involves a number of separate insurance companies sharing the cover of one particular risk. Where two insurers are involved it is known as dual insurance.
Commencement Date
The date on which the cover in terms of the policy starts.
Commission Money
An amount of money paid by insurance companies to brokers, independent intermediaries or agents for selling an insurer’s policies.
Comprehensive Insurance
A policy, usually relating to motor insurance, that covers a number of types of loss or damage.
Condition
Part of a policy setting out the rules that must be followed. For example, the duty to take reasonable care to protect property, or to report claims to your insurance company promptly.
Consequential Loss
Insurance covering the loss of profits of a business, and certain other costs, after an event such as fire has damaged the business. This is also known as Business Interruption.
Contents Policy
An insurance policy in terms of which the contents of a home or other building are covered.
Contribution
The principle of contribution applies where a risk is insured on more than one insurance policy (for example on a travel and household policy), and the two insurers concerned may share the cost of any claim.
Cover Note
A document giving temporary evidence of cover while the insurance policy and certificate are being prepared.
Declaration
Is a special contractual term which implies that the Insured must give true and complete information at all times.
Endorsement
A written amendment to an insurance policy that then forms part of that policy.
Excess
An amount of money that the policyholder has to pay towards the cost of a claim.
Exclusion
Specified property, person or event that is not covered by the policy.
Ex Gratia Payment
A payment made by an insurance company to a client that, in terms of the policy, is not strictly necessary.
General Liability
Covers the policyholder's legal liability for injury, property damage or financial loss caused to others.
Home Contents Policy
A policy covering the contents of a home or building against a number of different risks.
Insurance
A service, for which the client pays a price, which offers financial indemnification or compensation for something unexpected that happens. Originally the term assurance was generally used for life insurance, but now the two words are interchangeable.
Insurance Company
Provides insurance cover to individuals/entities to cover the cost of repairing/replacing goods that are damaged or lost.
Insured
The person covered by an insurance policy.
Insurer
See "Insurance Company".
Motor Insurance
Covers legal liability that a person may incur arising out of the use of a motor vehicle. Types of policies include Comprehensive cover, 3rd Party, Fire and Theft and 3rd Party only.
New-For-Old
Cover for property where an item which is lost or destroyed, no matter how old it was, would be replaced with a brand new one, with no deduction for wear and tear. Also called "replacement as new".
No Claims Bonus
A discount that is given on a premium based on a client’s claim-free insurance claims history.
Ombudsman
A highly qualified and experienced independent person who arbitrates on a dispute where an insured person does not agree with a decision taken by the insurer.
Perils
An event which may result in a loss or damage. Fire, malicious damage, storms, flood, theft and accidents are examples of perils. Only insured perils that are stated in the insurance policy, are covered.
Personal Accident Insurance
A policy that pays specified amounts of money should the policyholder be accidentally injured. Depending on the type of disability, the payments may be made weekly, for a set period, or as a lump sum.
Policy
The document providing full details of the contract between the insurer and the policyholder and setting out the terms and conditions relating to cover.
Policyholder
Person or entity to which the insurer issues a policy and normally the person to whom benefits are payable. Also known as the Insured.
Premium
The amount of money a client pays for insurance cover.
Proof of Ownership
The client needs to prove that the item belonged to him/her i.e. an invoice or a certificate of value, which provides the client’s details on it. Could also be photographs of damaged or lost items proving ownership.
Proof of Quantum
Refers to the value or cost of any item being claimed for and often the policyholder has to prove the 'Quantum' by submitting invoices or valuation certificates.
Property
Property is any item owned by someone such as a house or car or a personal possession. Property can be lost or stolen and therefore may be something the owner wants to protect – ‘insured property’.
Property Damage
Property policies cover specified property that may be damaged or destroyed by events or perils, such as fires, storms or theft.
Proposer
Person or company who applies to take out insurance.
Public Liability Policy
Covers legal liability for injury or damage caused to others.
Quote
A quote is a combination of suitable cover options and the related premium. There is no contract of insurance if only a quote is given.
Rate
The price of insurance, usually expressed as the cost per unit of cover, e.g. Rx per R1,000.
Regular Driver
Is the person who drives the insured vehicle most often and more frequently than any other person, and may not necessarily be the insured.
Reinsurance
Reinsurance is the cover insurance companies can purchase to take out insurance in order to protect themselves against large losses by having a portion of loss re-covered by the other insurer.
Salvage
Damaged insured goods that will be replaced by the insurance company through settlement of the claim. These goods then belong to the insurance company.
Subrogation
The right of an insurer (who has indemnified a policyholder) to take over any legal rights the policyholder may have had in respect of a particular claim.
Sum Insured
The amount for which goods or property are insured, and the maximum amount which the insurance company will pay for any claim.
Third Party
Someone involved in a claim who is neither the policyholder nor the insurer.
Underinsurance
When the sum insured is not enough to cover the maximum possible loss or damage.
Underwriter
Person/ company that decides whether to accept an insurance risk or not and that calculates the premium to be charged.
Underwriting
The process of obtaining information from the client to decide whether the risk is acceptable or not, and what extra security such as anti-theft devices or burglar alarms are required.
Utmost Good Faith
The principle of insurance that requires proposers to be truthful and give all relevant information to the insurer to enable it to underwrite a policy or process a claim, correctly.
Write-Off
A damaged motor vehicle which is not repairable, or one that would cost more to repair than the car was actually worth before the damage occurred. This is also known as a "total loss".
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