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Insurance Terms For Insurance Exams PDF
Insurance Terms For Insurance Exams PDF
Absolute Ownership Any accidental act which could not have been
prevented by any amount of human care and
Absolute ownership exits where the interest fore thought.
or explicit right of possession of the insured is
so free from limitations, qualifications or Actual Total Loss
restrictions that it cannot be taken from him
It is a loss where the goods are completely
without his consent.
lost and become irrecoverable.
Accident Ad valorem duty
Any Unforeseen and unexpected event is
Duty evaluated on percentage of cargo value.
considered an accident. For insurance
purposes it has to be due to external, physical Additional cover
and violent means.
An insurance policy extended to cover
Accidental Bodily Injury additional risk perils such as strikes. Riots and
Civil commotion etc. on payment of extra
Injury to the body as the result of an accident
premium.
Accident, Hit and Run Adjuster
Accidental Death or injury arising out of the
A person who investigates and settles losses
use of a motor vehicle(s) the identity whereof
for an insurance buyer.
cannot be ascertained inspite of reasonable
efforts for the purpose.
Administrator Assessor
An individual or professional organization, Person who estimates the value of goods for
such as a bank's trust department, appointed the purpose of apportioning the sum payable
by the court to administer an estate when the by the underwriters to settle the claims. Also
owner dies without having made a will or called as Surveyor.
without nominating an executor. An executor
may also be appointed if the named executor Assignment
declines to serve. The legal transfer of one person's interest in
an insurance policy to another person.
Agent
An insurance company representative
Assured
licensed by the state who solicits, negotiates Party indemnified or promised to be
or effects contracts of insurance, and provides indemnified against loss by means of
service to the policyholder for the insurer. insurance.
Aggravation of risk Average adjuster
To make the existing risk worse, more Independent expert who assesses the
troublesome, etc. liabilities of the various parties to a common
maritime adventure and to classify the various
Aggregate Indemnity
items of expenditure between general and
The maximum amount that may be collected particular average, viz, ship, Freight and cargo.
for any disability or period of disability under
the policy.
Avoidance
A right which can be exercised by and
Agreed value policy
underwriter to relieve him of liability under
Policy which undertakes to pay a specified the policy because the assured has been guilty
amount in case of total loss. Under this case of a breach of good faith or where the risk in
the policy does not take into account the voyage policy has failed to attach within a
current market value. reasonable time after the underwriter wrote
the risk.
All-risks Policy
Award
Coverage by an insurance contract that
promises to cover all losses except those The decision in arbitration.
losses specifically excluded in the policy. Also
known as open peril coverage. B
Arbitration Bailee
A form of quasi-judicial dispute resolution One who has custody of the property of
where an unbiased person or panel gives an another. Bailees "for hire" have certain
opinion about quantum of loss. responsibilities to care for the property of
others that is in their custody.
Beneficiary Broker
An individual designated in a will to receive an Middleman who represents an insured in the
inheritance, or the individual designated to solicitation, negotiation or procurement of
receive the proceeds of an insurance policy, contracts of insurance, and who may render
retirement account, trust, or other asset. services incidental to those functions. He also
represents insurer for certain purposes such
Bill of Exchange as delivery of the policy or collection of the
It is the bill drawn by exporter against the premium.
importer.
Burglary
Bill of Lading It is a theft committed by breaking into or out
Receipt for goods shipped on board a ship of the premises. Evidence of breaking in, is
signed by the person who contracts to carry necessary.
them, and stating the terms on which the
Burning Ratio
goods are carried.
The ratio of losses suffered to the amount of
Blanket Contract insurance in effect.
A contract of health insurance affording
Business Interruption Insurance
benefits, such as accidental death and
dismemberment, for all of a class of persons Insurance for a business owner against losses
not individually identified. It is used for such resulting from stoppage of business because
groups as athletic teams, campers, and travel of fire or other insured peril. The insurance
policy for employees, etc. provides reimbursement for lost net profits
and necessary standing expenses.
Bodily Injury
Physical injury, including sickness, disease, C
mental injury, shock or death.
Cancellation
Bonus
The discontinuance of an insurance policy
The Bonus system awards discounts for claim- before its normal expiration date, either by
free driving for a certain continuous period. the insured or the Insurance Company.
This goes on increasing upto a certain limit for
continuous claim free years.
Capacity
The amount of capital with an insurance
company as a whole for underwriting general
insurance coverage.
Insurance Intermediary
An economic device whereby the individual Any person who, or organisation which, gives
substitutes a small certain cost (the premium) advice by way of directly offering, advertising
for a large uncertain financial loss (the or on a person-to-person basis in respect of
contingency insured against) which would an insurance product and includes the
exist if it were not for the insurance contract: promotion of such a product or the facilitation
an economic device for reducing and of an agreement or contract between an
eliminating risk through the process of insurer and a customer. Intermediaries are
combining a sufficient number of generally divided into separate classes. The
homogeneous exposures into a group in order most common types are 'independent
to make the losses predictable for the group intermediaries' who represent the buyer in
as a whole. dealings with the insurer (also known as
independent brokers) and 'agents' (which
Insurance Company generally include multiple agents and sub-
An organization chartered to operate as an agents) who represent the insurer.
insurer.
Irrevocable beneficiary
Any corporation primarily engaged in the
Beneficiary designation allowing no change to
business of furnishing insurance protection to
be made in the beneficiary of an insurance
the public
policy without the consent of the named
Insurance Entities beneficiary
Nominee
Named Perils Policy
Nominee is the person who is nominated to
Coverage in a property policy that provides
receive the amount under a policy and to give
protection against loss from only the perils
a valid discharge to the insurer on settlement
specifically listed in the policy rather than
of claim under a life insurance policy
protection from physical loss. Examples of
named perils are fire, windstorm, theft,
smoke, etc.
O
Negligence Obligatory Treaty
Failure to use that care which a reasonable A reinsurance contract under which business
and prudent person would have used under must be ceded in accordance with contract
the same or similar circumstance. Negligence terms and must be accepted by the reinsurer
may be constituted by acts of either omission Occupational Hazards
or commission or both.
Occupations which expose the insured to
Net Premium greater than normal physical danger by the
A portion of the premium rate designed to very nature of the work in which the insured
cover benefits of the policy, but not expenses, is engaged, and the varying periods of
contingencies, or profit absence from the occupation, due to the
disability, that can be expected
Net Premiums Earned
Ombudsman
Net premiums written adjusted for the
increase or decrease during the year of the An authority established either by the
liability for unearned premiums company or the Government for the quick
redressal of grievances
P Policy
The legal document issued by the company to
Package Policy the policyholder, which outlines the
A combination of two or more individual conditions and terms of the insurance; also
polices into a single policy. A householders called the policy contract for the contract
policy, for example, is a package policy.
Policyholder's funds
Partial Disability Monies set aside by insurers to cover
The result of an illness or injury which outstanding liabilities to Policyholders. Also
prevents an insurd from performing on or known as technical reserves
more of the functions of his/her regular job
Policy Period
Particular Average The term for which insurance remains in
A term meaning an accidental and usually a force, sometimes definite, sometimes not
partial loss suffered by one interest and not
Policyholder's surplus
chargeable against others
Amount over and above liabilities available for
Peril an insurer to meet future obligations to its
The event insured against; the cause of policyholders
possible loss
Policy Term
Personal Injury The period for which an insurance policy
In law, a term used to embrace a broad range provides coverage
of torts that includes bodily injury, libel,
Policyholder
slander, discrimination and similar offences.
Also a standard insurance coverage that A person who pays a premium to an insurance
protects against a more limited group of torts company in exchange for the insurance
(false arrest, detention or imprisonment, protection provided by a policy of insurance
malicious prosecution, wrongful entry or
eviction, and libel, slander, or defamation)
R Replacement Cost
The cost to repair or replace property at
Rate
construction costs prevailing at time of loss;
The pricing factor upon which the insurance the cost to repair or rebuild property without
buyer's premium is based any depreciation
An amount due the insured upon cancellation A list of coverages or amounts concerning
of a policy things or persons insured
A beneficiary designation that may be A form of risk financing through which a firm
changed by the policyowner without the assumes all or a part of its own losses
consent of the existing beneficiary
Settlement
Rider A policy benefit of claim payment
Usually known as an endorsement, a rider is
Short period rates
an amendment to the policy used to add or
delete coverage Percentage of annual premiums charged for
short period policies
Risks not acceptable for insurance due to Weekly benefits (for Personal Accident
excessive risk Insurance)
Utmost Good Faith They are paid for the period of temporary
total disablement following an injury which is
A duty imposed on both parties to an admissible under the policy
insurance contract. The legal duty implies full
disclosure of all facts material to the contract Workers Compensation
during negotiations of the contract
A system of providing for the cost of medical
care and weekly payments to injured
V employees or to dependants of those killed in
Valuation the course of or arising out of their
employment in industry in which Absolute
Estimation of the value of an item, usually by Liability is imposed on the employer, requiring
appraisal him or her to pay benefits prescribed by law