Insurance Glossary
These are the Insurance terms which are commonly used in Insurance communication, short codes and acronyms.
ANY ONE ACCIDENT (AOA) | Any one accident. This term is used in relation to liability insurance, which refers to the maximum liability of the insurer in respect of all claims (both bodily & property damage) to third parties arising out of any one accident. |
ANY ONE VESSEL (AOV) | Any one vessel. This term is used related to Marine Cargo Insurance and refers to the insurer's maximum indemnity under the policy for all cargo in respect of any one vessel. |
ANY ONE YEAR (AOY) | Any one year. This term refers to insurers maximum liability for all claims during policy period. |
AS IS WHERE IS | It refers to a present state of condition and location of the goods at the time of sale, in which case the buyer takes on all the risks. |
ABSOLUTE LIABILITY | A Legal responsibility towards damages that are final and binding even when though there is non proven fault or Liability |
ACTUAL TOTAL LOSS | An actual total loss of a property is said to take place when:- The insured is irretrievably deprived of the subject matter insured The subject matter is so damaged by an insured peril as to cease to be a thing of its kind- loss of specie. It relates to a vessel and/or cargo thereon, the vessel is declared as missing. |
ACTUARY | An expert in statistics and a mathematician of the insurance field.Who conducts extensive statistical studies, calculate insurance risks and premiums and reserve, involves in the preparation of various annual reports in compliance of regulatory requirements. |
AD VALOREM | In proportion to the value
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ACTUAL TOTAL LOSS | An actual total loss of a property is said to take place when- -the insured is irretrievably deprived of the subject matter insured -the subject matter is so damaged by an insured peril as to be a thing of its kind-loss of specie -it relates to a vessel and/or cargo thereon, the vessel is declared as missing |
ACT OF GOD PERILS | Any event not caused or contributed to by man. Some sudden and irresistible acts of nature that could not reasonably have been forseen or prevented, such as Earthquake, Flood, storm, lighting etc. which constitutes Act of God Perils |
ACCIDENTAL MEANS | Refers to Purely by circumtances which are wholly unexpected, unforseen and beyond the control of the insured/beneficiary under the policy |
ACCIDENT | An unlooked for mishap or an untoward event which is not expected or design |
ACCESS TO RECORD CLAUSE | This term is also known as "Inspection of Records Clause", which refers to the right of the Reinsurer to inspect any books or records of the reinsured company, at the expense of the Reinsurer |
ACCOMMODATION LINE | The sale of an Insurance policy by the insurer to a company/business which doesn"t meet the said requirements but is accomodated to buid a rapport and attract prospective policyholders within the organization |
ACCOMPANIED BAGGAGE | Baggaged carrying out by a person during travel |
ACCOUNT-PROFIT & LOSS APPROPRIATION | The accounting format prescribed by IRDA Regulations, used to represent the distribution of the net profit balance between dividend, transfers to General reserve or Dividend equalization reserve etc. during the year |
ACCOUNT- REVENUE | The accounting format prescribed as per IRDA regulations, used to represent the premium underwritten by the insurer for each department, indicative of the revenue generation |
ACCOUNTING | The recording of revenue and expenses, debts owed by and to others and maintenance of Financial Statements |
ACCUMULATED STOCK CLAUSE | It pertains to the accumulated finished goods stock at a time when the activities of the business have been affected by any insured peril like Fire in manufacturing process etc. |
ACCUMULATION PERIOD | The duration for which premium payments are made by the annuitant under life insurance |
AD VALOREM | this is Latin word meaning "according to value", it refers to insurance premium calculated proportionately to the value of the property or subject under policy coverage |
AD VALOREM DUTY | Duty determined based on percentage of value of cargo |
ADDITIONAL COVER | An insurance policy extended to cover additional risks like riots, stikes etc. on payment of extra premium |
ADDITIONAL EXPENSES-STRIKE | The term used in relation to cargo, which refers to an event when the destination port is bound by a strike at the time the cargo is due to arrive at that port. The shipowner can choose to deliver the cargo at the nearest alternate port, in which case the cargo owner will have to bear the expense of transporting it to the final port eventually. TO provide for this contingency, the cargo owner can opt for an additional expenses (strikes) cover to be effected during a period of 12 months. However this feature will not be available once the strike has already commenced |
ADDITIONAL INSURED | Refers to an entity(any person or company) which is not originally included in the policy, but is included as an insured on request of the insured. |
ADD-ONS | additional benefits or covers of policy which forms part of policy once attached to main policy. |
ADJUSTER | Person who carries out investigation and settle claim on behalf of hirer |
ADJUSTING | The final process of settlement of losses with the Insured. |
AGENT | A person who acts on behalf of Insurer. |
ASSIGNEE | A person to whom policy benefits accrued. |
BASIC RATE | The minimum charge or rate, which is charged by Insurance company for providing specified coverage |
BILL OF EXCHANGE | |
BILL OF LADING | |
BODILY INJURY | Physical Injury including Sickness, death or mental injury. |
BREACH OF CONDITION | Non following of condition by insured as per the policy document. |
BROKER | An Intermediate person/agency which acts as a middlemen between Insured and Insurer and provides its various services to Insured. |
BROKERAGE | Fees charged by the Broker in lieu of services rendered to Insured.Brokerage normally paid by Insurance company directly to Brokers |
CAPITAL SUM INSURED | Amount of cover under Personal Accident Insurance. |
CLAIM | A request of Policyholder for the services mentioned as per the respective policy document |
CEDING COMPANY | The company that transfers its risk to a reinsurer. It is also called the Cedant. |
CERTIFICATE OF INSURANCE | Document which contain all information regarding policy coverage,terms,conditions, deductible etc. |
CO-PAYMENT | Its a pre agreed sharing of claim amount between Insured and Insurer |
CUMULATIVE BONUS | Its a kind of award for every claim free year.The total Sum Insured increased(without any additional premium) by a certain percentage for every Claim free year upto a maximum limit. |
DEDUCTIBLE | The amount of money the policyholder must pay on a loss from his own. |
Difference in Condition (DIC) / Difference in Liability (DIL) Insurance | A Difference-in-conditions (DIC) or Difference -in-limit(DIL) insurance arrangement is a type of cover. Which operate over and above Insurance covers when existing Insurance policy cover or limits ceased. It is basically designed to fill gaps in existing insurance policy , and it is used by big organization to protect itself from catastrophic risks. |
DYNAMO CLAUSE | This insurance Clause excludes all loss or damage to dynamos, exciters, lamps, switches, motors or other electrical appliances or devices, such as may be caused by electrical currents, whether artificial or natural and will be liable for only such loss or damage to them as may occur in consequence of fire outside of the machines themselves |
EARNED PREMIUM | The portion of the premium for which protection has been provided. If an insured has an annual premium and makes monthly payments, each month the insurer earns 1/12th of the premium. |
ENDORSEMENT | A written agreement attached to the insurance policy which alters the provisions of the contract. |
EXCLUSION | These are specified conditions which mentions the non covered details under the policy. |
EXPOSURE TO LOSS | The policyholder’s possibility of loss. |
INTERNET OF THINGS(IoT) | A network of objects that transmit data to and from each other without human interaction. |
INSURTECH | The use of emerging technologies in the insurance industry is known as 'Insurtech'. |
PREMIUM | The amount which is paid by Insured to his/her Insurance company in lieu of policy benefits & coverages. It can be Monthly, quarterly,yearly or as agreed between Insured and Insurer |
POLICY | A legal document having all details of agreed Insurance coverage along with terms & conditions between an Insured and Insurance Company. In case of any covered event this amount will be paid by Insurance company to Insured as per the Policy document/Certificate of Insurance |
RISKTECH | Risk monitoring and mitigation technology is known as 'Risktech'. |
SALVAGE | Remaining or saved property from a loss like Fire, Flood, Accident or any other mishap |
SOUND ARRIVED VALUE | Refers to the value of Sound market value of items/property |
SUBROGATION | |
TERM LIFE INSURANCE | |
THIRD PARTY | Refers to party which is apart from Insured and insurance company |
THIRD PARTY LIABILITY | Liability towards to uninsured person apart from any contractual liability |
TOTAL LOSS | It refers to the total loss, in which No value is retrieved or left after the accident |
WAITING PERIOD | It is the period(number of days) which makes wait to Insurer for claim any benefit under the policy issued. It varies as per nature of policy. |
SUM INSURED | Agreed amount of coverage which Insurance company |
UNDERWRITING | Process by which the Risk is rated to be charged by way of premium.Basically this process determines the eligibility of Risk to be accept or reject, and if accept then what rate to be charged. |
VALUATION | Estimated value of the covered property, appraised by an aapraisal. |
VALUED POLICY | The Value of the thing payable to Insured in case of Total loss of the covered items under the policy |
WARRANTY | Mentioned in policy as conditions to be followed by the Insured |
WEAR AND TEAR | Refers to depreciation in Insurance |
WORKERS COMPENSATION | Payment to Worker/Employee or his/her dependents due to any mishap |
WRITTEN PREMIUM | Total of all premiums paid to Insurance company in respect of written Insurance policies |