Common Insurance Questions and Answers

It's important you understand what the words used in a policy mean. Here is some common insurance industry jargon.

Avoidance
If a policy is avoided, it is treated as if it has never existed.

Disability
The definition of disability depends on your policy's wording. Some people have found themselves diagnosed by their doctors as disabled but have not received payment from their insurer. You need to read your policy very carefully to see what is included in the definition.

Duty of disclosure
You must give an insurer all relevant information. If you fail in your duty of disclosure, the company may avoid the policy.

Endorsement
A change to the standard terms of the policy.

Excess
A fixed amount you have agreed to pay towards any insurance claim. People usually take an excess to lower their insurance premiums.

Ex gratia payment
A payment which does not have to be made in law.

Indemnity value / Market value
The value of an item at the time it is lost or damaged.

Material information
Any information that would affect the insurer's judgement in offering you cover.

Premium
The money paid you pay the insurance company for the cover provided by the insurance policy.

Proposal
Your application for insurance.

Sum insured
The maximum amount the insurer will pay for a claim.

Surrender value
The amount payable to you when you cancel a life insurance policy.

Third party
Anyone other than you and your insurer.