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Must Read: Glossary Of Insurance Terms That You Need To Know

Written by Wasim

Insurance can be pretty complicated, like medicine, there are specific terms that are often difficult for an ordinary person to understand. In the period we have been in the market, these are the words that we’ve found our clients find either hard to understand or are unsure of:

Insurance Terms simplified, A-I

Automobile insurance

Auto insurance is a policy purchased by vehicle owners to mitigate costs associated with getting into an accident. This insurance policy covers automotive vehicles and its inhabitants in the event of a car crash. Coverage types include liability, bodily injury, collision, comprehensive coverage, among many others.

Binder

A binder refers to a legal agreement issued by an insurer to allow temporary evidence of insurance until a policy can be insured. It is a statement providing immediate protection. Binders contain specific time limits.

Claim

A claim is a request by a policyholder to an insurance company for coverage or compensation for a covered loss or policy event.

Deductible

The amount that you pay for the covered event before your insurance plan starts to pay.

Exclusion

These are listed items that your insurance will not cover.

Flat Rate Cancellation

The termination of an insurance policy before it goes into effect.

GCC Insurance Protection Extension Program

Gulf Cooperation Council citizens are those employees holding the nationality of one of the GCC countries. The employees work in  GCC member countries outside their home country so, social security is extended to include them.

Hit and Run

You are in an accident, and the other driver flees the scene, its called a hit and run.

Insured Declared Value (IDV)

The premium is calculated based on the IDV of the vehicle; this is the depreciated worth of the vehicle agreed upon by the insurer and the policyholder.

Motor Vehicle Record (MVR)

This statement from the Department of Motor Vehicles lists any traffic violations received by the insured party over time.

Non-disclosure, Misrepresentation and False Declaration

These words mean pretty much the same thing in the insurance world. If you’re applying for insurance, you should disclose any information (material facts) influential to the price. Failure to do so, the above terms will bind you.

Own Damage Premium (OD)

OD means cover against damages to your car. Payment of OD premium entitles you to claim compensation in case of theft or damage to your vehicle.

Proof of Loss

Documents you provide to the insurer to support your request for payment losses.

Recoverable/Non-Recoverable Claim

A recoverable is a claim when an insurance provider can recover their repair bills from another insurance provider. For instance, if the other party in a collision was at fault. A non-recoverable is when the insurance provider has to pay for the damages.

SR-22

A document required by the Department of Motor Vehicles (DMV) for high-risk insurance policies.

Term

The amount of time that an insurance policy is in effect.

Unearned Premium

The amount of time left on your insurance policy.

Vehicle Identification Number

An alphanumeric code assigned to each vehicle that gives information such as make, model, and year.

Waiver of Collision Deductible

Coverage purchased as part of your insurance policy. It will reimburse your collision deductible if your insured vehicle is in an accident and the person liable is an uninsured driver.


Originally published Jun 20, 2019 16:57:38 PM, updated Aug 26, 2019

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