Insurance Terminology

Terms and meanings that are commonly used in the insurance industry.

TERM
MEANING
Accident An event causing injury to an insured person and was not intended by them to happen
Agreed Value The set amount an insurer will pay for an item or asset
Claim A request for payment according to the policy terms made by you to the insurer
Cover The amount of protection an insurance policy provides
Exclusion A provision in a policy that excludes cover for certain events or conditions
Event A single event or a series of events which have the same cause
EQ Cover The cover provided by the Earthquake Commission in the event of damage to houses and their contents caused by natural disaster such as an earthquake.  It's funded by the compulsory levy which is included in every home and contents policy premium
Excess/Deductible This is the first amount payable by the insured towards the cost of the claim
Insured Someone covered by an insurance policy
Indemnity Value This is the value of the item at the time of the loss.  Indemnity value is designed to put you in the same financial position you were in immediately before the loss occurred
Invoice Amount This is the full annual charge for your insurances, including fees, levies, and GST
Liability When you are legally responsible for damaging someone else's property
Policy Document/Policy Wording A document outlining terms and conditions of insurance agreement for a specific insurance policy
Policy Summary Document detailing your policy benefits
Policy Schedule The document that states the benefits of your policy
Premiums The regular payments made to an insurer in order to keep the policy going
Renewal The insurer and policy owner agree to continue insurance from one risk period to the next
Replacement Value This is the amount to replace an asset at the present time
Sum Insured/Cover Level/Benefit The amound the insurer agrees to pay out under the policy's terms
Underinsured Underinsurance is where someone does not have adequate levels of insurance, when insurance does not cover the full value of potential claims
Underwriter Someone who assesses the risk of providing insurance to the person applying

 

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