Hippo - A-Z General Insurance Glossary

If you confuse insurance excess with the extra bulge around your waist then you need to learn some Insuranese. This glossary will help you become fluent in this, often, a misunderstood language.



Act of God
An act of God is used to describe natural disasters like flooding, lightning, earthquakes, etc. It can also mean any unforeseen incident like a tree falling on your car. Now, that will put a dent in your bank balance if you don’t have car insurance.


You are never alone. There’s always someone to lend a hand in an emergency – be it medical, roadside, household, legal and/or trauma assistance. Many insurance companies offer assist products to help you in times of need.


Nobody likes getting an average score even in insurance. Make certain that you insure all your items for their full replacement value; if you don’t, the average applies. This policy condition has the effect of reducing a claim payment if the insured items are underinsured.


Additions or changes made by a resident, at his own cost, to a building that he occupies. These improvements add to the value of the property. In these cases, the policyholder can be requested to contribute towards the cost of the claim, unless the policy holder has updated his policy


An intermediary who is licensed to provide insurance services to clients.


Building insurance
Make sure your home or buildings are covered with building insurance. Buildings insurance  covers the cost of repairing/replacing the structure of a house or building, including garages, walls, fences and gates in the event of fire, lightning, explosions and/or earthquakes. If you have a bond your home or buildings will need to be covered.


A claim is when a policyholder’s insured goods are damaged or lost, and he requests that they be repaired or replaced.


It’s not that you are such a risk that you need two insurers. Co-insurance is an arrangement that involves separate insurance companies sharing the cover of one particular risk.


Commencement date
This is the start of a beautiful friendship. The cover, in terms of the policy, begins on this date.  


Commission money

Insurance companies pay brokers or independent intermediaries for giving them business.


Comprehensive insurance
A policy, usually relating to car insurance, that covers different types of loss or damage. So, insure your set of wheels against pesky thieves and nasty damage.


You can’t bend the rules in the insurance game. A condition is part of a contract that sets out the rules that must be followed by all parties.


Consequential loss
A Business insurance policy covers the profit loss of a business, and certain other costs, after an event such as fire. This is also known as ‘business interruption’.


Contents policy
This is an insurance policy in which the contents of a home or building are covered. So, insure everything you own from your entire CD collection of The Supremes to your /fridge


Contribution applies where a risk is insured on more than one insurance policy (e.g. on a travel and household policy), and the two insurers concerned may share the cost of any claim. In this case, sharing is caring.



The protection provided by insurance, so you don’t have to worry when the unexpected happens.


Cover note
A document giving temporary evidence of cover while the insurance policy and certificate are being prepared.


‘Do you swear to tell the truth, the whole truth and nothing but the truth...’ This contractual term is similar to taking an oath in court, where the insured must give true and complete information at all times.


A written amendment to an insurance policy that then forms part of that policy.


In this case, excess doesn’t refer to the extra tyre around your waist, but to an amount of money that the policyholder has to pay towards the cost of a claim.


This refers to the odd one out, namely specified property, a 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. Bravo for the client!


General liability
Covers the policyholder's legal liability for injury (except when driving a motor vehicle), property damage or financial loss caused to others.


Home contents policy
It insures all the bits and bobs you keep in your home, including:

  • Your clothing and household appliances
  • Furniture and garden tools
  • Food that spoils in your fridge during a power failure
  • Personal documents and credit cards


A service that offers financial compensation for when something unexpected happens – be it a stolen cell phone or damage to your home


Insurance company
Provides insurance to individuals/entities to cover the cost of repairing/replacing goods that are damaged or lost.


The person covered by an insurance policy.


A company that provides insurance services.


Motor insurance
Car insurance covers you and your wheels in the event of an accident or theft. There are various types of policies, including Comprehensive Cover, Third Party, Fire and Theft.


Get an upgrade on an item that is lost or damaged. No matter how old it was, it will be replaced with a spanking substitute, with no deduction for wear and tear. Also called ‘replacement as new’.


No claims bonus
If you don’t make a claim during these unpredictable times, you must be either super-vigilant or an agoraphobic . Either way, you deserve a reward.


The Ombudsman is not a right-wing activist group, it’s actually a Swedish word for ‘representative’. The Ombudsman is an independent office that resolves disputes between policyholders and insurance companies. And, the complainants don’t pay a cent for their services – its mahala!


Perils include fire, malicious damage, storms, flood, theft and accidents. Only perils stated in the insurance policy are covered.


Personal accident insurance
Be careful, it’s a jungle out there. Luckily, this insurance product provides financial assistance for you and your family in the event of your hospitalisation, disablement or death, resulting from an accident. Depending on the type of disability, the payments may be made weekly, for a set period, or as a lump sum.


A policy is written evidence of the contract’s terms. Don’t forget to read the small print before you sign on the dotted line.


The insured person – that would be you.


Simply put, the amount of money a client pays for insurance cover.


Proof of ownership
The client needs to prove that the item belonged to him. Proof can be in the form of an invoice, photograph or certificate. It’s a good idea to keep your purchase slips after a shopping spree, you never know when you’ll need it.


Proof of quantum
Thankfully, this has nothing to do with quantum physics. It refers to the value of any item being claimed. The policyholder has to prove the 'quantum' by submitting invoices or valuation certificates.


Property is anything you own whether it’s a mansion, car or teacup. Property can be damaged, lost or stolen; therefore, the owner insures all his prized possessions.


Property damage
Property policies cover specified property that may be damaged or destroyed by events or perils, such as fires, storms or theft. Plan and protect your possessions against unpleasant surprises.


Nope, this is not some nervous bloke about to pop the question. In the insurance world, a proposer is a person or company who applies to take out insurance.


Public liability policy
This covers legal liability for injury or damage caused to others but not in the case of a motor vehicle accident.


A quote is a combination of suitable cover options and the related premium. Hippo will help you find the best comparative  car, home, buildings and life insurance quotes online. Hippo does the hard work so you don’t have to


Everything has its price especially in insurance. A rate is 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 is mostly behind the wheel of an insured car, but who is not insured himself.


Reinsurance is insurance for insurance companies. Hey, even the big shots need to protect themselves against large losses.


Insured belongings that were replaced by the insurance company, through settlement of the claim, now belong to them.


This term hails from dusty legal archives, so it’s not surprising that it’s foreign to most of our lingo. In a nutshell, subrogation is the right of an insurer to take over any legal rights the policyholder may have had in respect of a particular claim.


Sum insured
It’s all about the moolah. This is the amount for which goods or properties are insured, and the maximum sum that the insurance company will pay for any claim.


Third party
Someone involved in a claim who is neither the policyholder nor the insurer.


When the sum insured is not enough to cover the maximum possible loss or damage – what a pity!



‘To accept or not to accept an insurance risk?’ That is the question asked by underwriters all day, every day. This person/company has the power to accept or reject an insurance risk and they calculate the premium to be charged. Respect.



Underwriting is similar to weighing up the pros and cons. It’s the process of obtaining info from the client to decide whether the risk is acceptable. It also takes into account what extra security, such as anti-theft devices or burglar alarms are required.


Utmost good faith

Honesty is the best policy. Proposers or prospective clients are required to be truthful and give all relevant info to the insurer to enable it to underwrite a policy, or process a claim, correctly.



This is beyond a bender-fender. A vehicle is classified as written-off when the damage is not repairable, or if the costs exceed the value of the car. This is also known as a ‘total loss’.

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