Understanding insurance terms can be a daunting and difficult task. Use this essential guide to insurance terminology to help you get your head around the key terms.

1. A Guide to
Insurance
Terminology

2. Understanding insurance terms
can be a daunting and difficult
task. Use this essential guide to
insurance terminology to help
you get your head around the
key terms.
Adjuster
This is an independent professional individual who investigates
and assesses claims on behalf of insurance companies.
Assets
Assets are the goods that you own, such as your car, house,
belongings, cash and investments. Assets are anything you own
with a tangible value.
Benefit
The amount payable by an insurer.

3. Buildings and content insurance
Buildings insurance covers the cost of rebuilding or repairing your
house if it is damaged or destroyed. Buildings insurance can
normally be combined with contents insurance, which covers
your personal possessions within your home.
Cover note
The document issued that confirms details of your insurance
cover and policy.
Car insurance
An insurance policy for your car. There are three main types,
comprehensive third party and theft or third party only.
Comprehensive insurance covers you for the widest range of
possible claims in the case of accident or theft, including repairs,
replacements, personal injury and other losses. Third party is the
minimum cover required by law in the UK.
Deductible
The specified amount a loss must exceed before a claim is
payable. When the loss exceeds the deductible only the excess
is recoverable under the policy.
Excess
The first portion of the cost of a claim or loss which the insured
has to bear in accordance with the policy. The excess can be
either voluntary or imposed.

4. Ex gratia
The means without legal obligation.
Fraud
A criminal offence that refers to making false statements to an
insurance company or making a claim for a fictional loss.
Claims
A claim arises following injury
or loss to the insured, which
causes liability to the insurer
under an insurance policy.
Health Insurance
Insurance that provides you
with access to health
treatment if you are ill or need
treatment for an injury. It can
also provide cover for regular
income if you have a long
term illness.
Home Emergency Cover
An addition to home insurance that covers you for emergency
repairs for services in your house, such as electricity, plumbing and
heating.
Inception
When an insurance contract comes into force.
Indemity
Security against financial loss. A policy of indemnity is designed to
place the insured in the same financial position as he/she would
have been in had the insured peril not occurred.
Life insurance/assurance
A type of insurance policy that pays a lump sum on the death of the
insured person.

5. Legal Expenses Cover
A type of insurance that covers you for any fees or expenses
incurred for consulting a lawyer or other legal proceedings.
Multi Trip Travel Insurance
A type of annual travel insurance that covers you for multiple
trips in the same year.
New for old
Where insurers agree to pay the cost of property lost or
destroyed without deduction for depreciation.
No claims bonus
No claims bonus is very common in motor insurance. It is a rebate
of premium where no claims have been made by the insured.
Premium
The amount paid for a contract of insurance.
Salvage
A recovery of all or part of the value of an insured item on which
a claim has been paid. The insurer will normally dispose of the
item and apply the proceeds to reduce the cost of the claim.
Sum insured
The maximum amount payable for a claim as part of an
insurance policy.
Single Trip Travel Insurance
Travel insurance cover for a single trip, which protects you
against medical emergencies, lost baggage, cancellations and
accidents.
Underlying insurance
The primary insurance, distinct from excess insurance.
Underwriter
A person who accepts business on behalf of an insurer.
Wear and tear
The amount deducted from claims payments to allow for any
depreciation, which is caused by its usage.