Insurance: Simplified
Insurance may be complicated, but it doesn’t have to be a mystery!
This blog will detail the key policies, documents, and people that will pop up during your insurance journey. It is by no means comprehensive, and that’s where our brokers come in. They know the ins and outs of the jargon and will make sure you understand exactly what it means.
Key Policy Terms
Policy terms are the words that you’ll find in your insurance policy documents. These are the most common terms found, but if you are unsure get in touch with your broker.
Indemnity
- A promise to pay after a loss or damage. This is the promise that insurers uphold during the claims process. An Indemnity Period is the amount of time that you can make a claim after the loss or damage occurs
Premium
- This is the amount you agree to pay for your insurance coverage. A Deferred Premium is a premium payment that has been postponed under special circumstances.
Deductible
- A deductible is the monetary amount you have to contribute before the insurance company will pay a claim. This tends to be found in larger, commercial policies. An excess is the same thing, except it does not affect the maximum payout.
Limit
- This is the highest amount of money that an insurer will pay in the event of a claim. It can be expressed in a number of ways, including: per annum, per occurrence, per event, and per accident.
Negligence
- The failure to take precautions in order to prevent accidents, damages, or loss to property or people. If you are found to be negligent, it can affect how much you receive from a claim.
Insurable Interest
- An insurable interest is something or someone you have an economic stake in, such as an employee, tools, or a website. The ‘insurable’ is the monetary value that is associated with potential damage or loss.
Insurable Value
- The total value that can be covered by an insurance policy. Different policies will have different limits, so it is important to check the fine print to make sure you’re fully protected.
Key People
Insurance is a collaborative industry, with many different people being involved from when you first request a quote to when you are officially insured.
Policyholder
- Policyholders are those who have taken out the policy with the insurer. They are responsible for paying the insurance premium. Policyholders can also be referred to as clients. In the event of a claim, they would be known as claimants.
Insurers
- Another term for an insurance company as an entity. The insurer is who you take out a policy with and who would pay you in the event of a claim.
Underwriter
- Underwriters work under insurers. They evaluate insurance applications for approval and determine coverage amounts and premiums. They negotiate terms with brokers or clients on behalf of the insurer they work for.
Broker
- Brokers facilitate the insurance process between clients and underwriters. They help their clients decide what cover is most appropriate, as well as offering risk management advice.
Lloyd’s Broker
- Based in London, Lloyd’s is a unique marketplace with syndicates that offer specialist expertise. Clients wanting to obtain cover at Lloyd’s should contact a broker or other insurnace intermediary.
Loss Adjuster
- Loss Adjustors work on behalf of the insurance company to assess whether the claim is valid and covered by your policy. They usually conduct a visit to the premises before deciding what final sum will be paid (if any).
Public Adjustor
- Also known as Loss Assessors, they are independent to the insurer. They are employed by individuals and manage the insurance claims process on their behalf.
Key Documents
Insurance also involves a lot of documents. From overviews to forms, it can feel overwhelming. Below are the key documents to get to grips with.
Cover Note
- A temporary document that shows you have paid your insurance and are fully covered. Less common now with the rise in digital certificates and confirmation.
Certificate
- A Certificate of Insurance (COI) provides evidence of your insurance, usually requested by third parties. It can also be known as a Policy Schedule and contains key covers, policy numbers, and other details.
Statement of Fact
- A record of the risk information that the insurer uses to decide on coverage. It is a requirement to disclose information that could affect your policy, as it could result in a denied claim if it is found later.
Policy Summary
- Also known as an Insurance Product Information Document (IPID), it is a simplified version of an insurance policy. This is particularly useful when the full policy is extensive, as it provides all the essential information of the agreement.
Declaration Page
- Also known as a ‘dec’ page, it details the terms of coverage such as cost and cover limits. It is part of the detailed summary within your insurance policy and is not the same as a COI.
Renewal Notice
- A reminder that your insurance is due for renewal, usually sent around 3-4 weeks prior to the renewal date. If you use a broekr, they will advise you on the next steps and steer the process.
Got more questions? Click here to get in touch with one of our brokers today.
