Additional Benefit A benefit added to a standard policy cover.
Average Condition A condition in an insurance policy which applies where the Sum Insured or value of the property has been under-insured. In such circumstance the insured's claim is reduced proportionately to the under-insurance.
Certificate of Insurance A document stating the fact of insurance usually issued under a group or master policy where it is convenient to have such evidence of cover separate from the group or master policy.
Contract of Indemnity A contract with the intention to make good financial loss as nearly as possible. Most insurance contract is based on this principle.
Contractual Liability Liability that arises by virtue of a contract and not from liability at common law.
Hazard A physical or moral element that increases the chance of a loss.
Hospital Cash Payment of a cash sum for a specific period for treatment as a hospital in-patient.
Household Goods & Personal Effects In insurance the term refers to furniture, clothing and other customary contents of a private dwelling.
Householders' Insurance A package of insurances designed for private dwelling that covers contents against fire, theft and other specified perils and also liability of the householder as occupier.
Houseowners' Insurance A package of insurances designed for the owners of private dwelling that covers the buildings against fire, theft and other specified perils and also liability of the owner to third parties.
Indemnity In insurance 'indemnity' means the making good of a loss by way of a monetary payment.
Inherent Vice A quality in goods that causes damage by its own action.
Insurable Interest The insured is said to have an 'insurable interest' in the subject-matter of the insurance if he will benefit from its survival or will suffer from the loss or damage of it or may incur liability in respect of it.
Insurance Agent A representative of an insurer who negotiates, effects or services contracts of insurance.
Insurance Broker One who advises person on their insurance needs and negotiates insurances on their behalf with insurers.
Jurisdiction Clause A clause in a policy that specifies which country's courts shall have jurisdiction in the event of a dispute under the policy or, in liability insurances, that excludes liability for third party claims brought in other than domestic courts.
Knock-For-Knock Agreement An agreement between insurers that in the event of an accident involving their respective policyholders neither insurer shall seek to recover the cost of repairing the damaged caused to the vehicle it insures from the other party.
Malicious Damage Deliberate damage by individuals.
Market Value The value of property at a price acceptable to a willing seller and a willing buyer.
Material Fact A fact that will influence a prudent insurer in deciding whether or not to accept a proposed insurance and if so, on what terms and conditions.
Minimum Premium The minimum premium for a particular class of insurance that an insurer is prepared to accept taking into consideration the administration expenses that the insurer will incur.
Minimizing a Loss In the event of a loss cover under the policy it is the duty of the insured to take all reasonable steps to minimize the loss, acting as he would as in his own interest if the loss is not insured.
Misdescription An incorrect description of the risk proposed for insurance by the proposer.
Misrepresentation An incorrect statement.
Moral Hazard The hazard arising from the recklessness or dishonesty behaviour of the insured or his family or employees that may increase the possibility of loss.
Mortality Risk The risk of death.
Mortgagee A lender or financier to whom property is charged as security for a debt or loan on the condition that the property will be discharged when the debt or loan is fully paid.
Mortgagee Clause A clause in an insurance policy providing beneficiary rights to the lender or mortgagee.
Mortgagor The borrower who charges his property to the lender on condition that it will be discharged when the debt or loan is fully paid.
Uberrima Fides Same as Utmost Good Faith. Under-insurance Insufficient sum insured for full payment of loss.
Underwriter Same as insurer.
Utmost Good Faith In insurance contracts both the insurer and the insured are required to exercise utmost good faith or truthful in their dealings with each other. More so for the proposal of an insurance to disclose all material facts to the insurer so that he may assess his application prudently.
Waiting Period A period in which the benefit of the policy will not be payable after the inception of the policy. For example, a hospital & medical policy with 30 days 'waiting period' exclusion for hospital expenses would not pay for expenses incurred within the 30 days from inception of the policy.
Warranty A warranty in an insurance contract is a condition that must be complied with. A breach of the warranty entitles the insurer to deny liability.
Wear and Tear Damage due to deterioration of the property over time which is excluded in an insurance policy.