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Insurance Jargons Explained in Detail

In the world of insurance, there are a lot of archaic-sounding terms you may never have heard before. While you don’t need to get caught up on industry lingo to get insured, knowing the basics is an advantage. Here are some of the most common insurance terms and phrases you might come across while shopping for insurance or having a chat with your agent.

Sl. No. Insurance Jargon Explanation
01 Accidental damage cover Coverage against property damage instead of theft or loss.
02 Act of God Natural disasters that cannot be predicted or foreseen are covered under the Act of God provision.
03 All risks A special insurance plan that includes all risks except for those specifically mentioned as exclusions.
04 Annual policy Insurance coverage that is valid throughout the year rather than for a single trip or vacation.
05 Any driver Coverage that permits anybody, not just the owners, to drive a car. However, all driver plans only insure drivers who have a license to operate the vehicle.
06 Breakdown cover Coverage that covers motorists with recovery and repairing assistance.
07 Broker A third-party mediator who offers plans from various insurance firms.
08 Buildings insurance Insurance that protects a building’s fabric from damage caused by risks such as water, fire, or collapse. Coverage will cover the cost of reconstructing or repairing the building.
09 Business equipment Conventional home insurance coverage usually excludes anything utilized for business purposes. This can include important equipment like fax machines and PCs.
10 Claim The procedure of obtaining payment from an insurance provider for a policy you purchased from the company.
11 Combined policy A coverage that insures both the structure and the contents of a residence. Insurers typically provide a discount for combination plans, making them appear more appealing. However, purchasing separate plans in the marketplace may still be less expensive.
12 Contents insurance Coverage for personal belongings
13 Excess The sum a policyholder promises to pay when he or she suffers a loss on the insured asset. Some contracts, such as a vehicle or travel insurance, frequently have an excess. Usually, insurance rates are reduced by a voluntary excess.
14 Exclusions Situations that are not insured by a contract of insurance.
15 Fully comprehensive A plan for car insurance that includes damage to the policyholder’s car as well as any third-party damage.
16 Green Card Paperwork supplied to persons driving in other countries as proof that the individual holds the minimum legal insurance coverage necessary.
17 High-risk occupation A profession that increases the likelihood of an accident occurring.
18 Indemnity A distinguishing feature of insurance that states that a loss payout would compensate what was lost, restoring the policyholder’s financial position previous to the event without rewarding or punishing the policyholder for its misfortune.
19 Insurance Premium Tax A federal levy levied in the form of a proportion of insurance premiums.
20 Knock for knock A contract reached between insurance firms to reduce documentation and legal actions.  Rather than seeking payment from the opposing party, insurance providers pay the claims cost for their own clients.
21 Legal expenses insurance Coverage that pays for the expenses of private court proceedings, such as a disagreement with a neighbor or a tradesperson. Typically marketed as a rider to homeowner insurance plans.
22 Loss adjuster An expert in insurance who handles large or difficult insurance claim procedures. His/her responsibility is to ensure that claims are true as they appear.
23 Loss Assessor A claim adjuster is someone who negotiates claim action on behalf of the insured.
24 Loss The insurance industry’s word for being burgled, robbed, hurt, or involved in an automobile accident.
25 Material fact Details that may influence an insurance firm’s willingness to make a plan or the rate it charges. A plan may be rendered null and void if a crucial fact is not disclosed. 
26 Mechanical breakdown insurance Insurance plans that compensate if a car develops specified flaws.
27 Mutual Insured owned insurance company.
28 Named driver Any driver who is named on an insurance plan who does not own the car. 
29 New-For-Old Property insurance in which anything damaged or stolen is compensated with a brand new product with no depreciation adjustment.
30 No-claims bonus A reduction in the premium rate that accumulates with each year that there is no raised claim.
31 Personal possessions cover Personal insurance covers valuables such as cash, jewelry, and bags.
32 Pluvius Insurance Pays losses caused by inclement weather, most notably rain.
33 Policy The agreement between the insurance provider and the insured is detailed in this paperwork.
34 Policyholder The individual to whom the coverage is issued by the insurance provider. Typically, this is the individual who receives advantages from an insurance plan.
35 Premium The sum a consumer must pay in exchange for insurance coverage.
36 Professional Indemnity Insurance Professionals, such as attorneys, are protected from liability claims originating from improper activity.
37 Public Liability Policy Addresses legal liability for bodily harm or property harm done to others. Usually included in car insurance and certain house insurance packages.
38 Settlement If an insurance company settles a claim.
39 Single trip Insurance coverage that covers a single vacation or trip for a set period of time.
40 Sum insured The highest amount an insurance provider will payout on a claim.
41 Third-party Liability A low-cost and simple type of auto insurance. Third-party insurance covers damages to other people’s automobiles but not the insured vehicle.
42 Under-insurance If a consumer purchases insufficient insurance and pays lower rates than they need to.
43 Underwriter An insurance firm employee who chooses whether to provide a policy and determines the premium rate which needs to be charged.
44 Warranty Insurance Coverage for the expense of repairing broken-down home appliances.
45 Write-Off A destroyed automobile that cannot be repaired or would charge more to fix than the automobile was valued before the accident happened.

 

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