Learner Study Guide
Demonstrate knowledge and
understanding of all risk insurance
(Unit standard No 10375)
NAME:
ORGANISATION:
COURSE NO:
OR
RPL:
10375 – Learner Guide
2016/02/05
Page 1 of 27
Table of Contents
Page
Introduction
3
Specific Outcome 1
5
Specific Outcome 2
10
Specific Outcome 3
16
Specific outcome 4
18
Glossary of terms
24
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Introduction
Welcome
Welcome to this learning intervention, which is aligned to unit
standard 10375 and deals with all risks insurance.
This learning intervention can form part of a Level 4 Skills
Programme, which will enable you to meet the minimum
requirements of Column Four (Conditions/Restrictions) of the
Determination of Fit and Proper Requirements for Financial
Services Provider (2002), in order to be “fit and proper” in
terms of the Financial Advisory and Intermediary Services Act
37 of 2002.
Purpose of this
learning
intervention
This learning intervention will provide you with the knowledge
and skills required to:
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Learner’s roles
and
responsibilities
Explain all risks insurance.
Differentiate between specified and unspecified all risks
cover.
Describe the optional cover available under all risks
insurance.
Explain indemnity under an all risks policy.
You are required to:

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
10375 – Learner Guide
Work through this self-study guide.
Take responsibility for your own learning.
Ask for guidance and support when required.
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Unit standard
The overall outcomes and specific outcomes of this learning
intervention are aligned with registered Unit Standard 10375.
This means that if you are able to demonstrate competence in
the learning outcomes, which are aligned to the specific
outcomes of the unit standard, you will qualify for credits,
which will contribute towards the 120 credits required for a
National Certificate at Level 4.
For further details regarding the process for obtaining the
National Certificate at Level 4, please contact your Human
Resources Department or the Skills Development Facilitator
within your organisation.
Assessment
In order to obtain the two credits for unit standard 10375, you
are required to work through this self-study guide and provide
evidence of your competence against the unit standard. If you
are unable to demonstrate competence, you will not obtain any
credits for the unit standard.
The assessment can be conducted at your workplace. A
qualified assessor or your line manager will conduct the
assessment and will provide you with the necessary information
about how the assessment will be conducted.
Enjoy
Now you may begin with the actual content of this learning
material. Everything of the best in your studies.
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1. Specific Outcome 1:
Explain all risks insurance
Assessment
criteria 1.1
The concept of personal effects is explained with
examples
The Insured
The Policyholder in an all risks insurance policy is defined as
the insured and the members of his family normally residing
with him.
Personal
Effects
The property insured under an all risks policy includes:
Clothing (wearing apparel), personal effects and personal
equipment normally worn or used by the person participating
in sport.
Wearing apparel and personal effects means
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Wearing apparel excluding furs;
Luggage containers, handbags and briefcases;
Sporting equipment but excluding pedal cycles motor
vehicles trailers hand-gliders aircraft or water craft;
Watches jewellery trinkets and toilet requisites;
Photographic equipment pockets calculators and
binoculars;
Other personal effects generally carried on the person
but excluding contact lenses radios and sound
reproduction equipment firearms and cellular
telephones;
Personal effects are usually defined as those items normally
worn or designed to be carried on or about the person.
For example if you are carrying your camera with you whilst
on holiday taking pictures as and when you see the
opportunity, the camera is knocked out of your hand and
shatters on the floor, this item is considered as a personal
effect and would be covered for accidental damage.
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Assessment
criteria 1.2
The events covered by an all risks policy are explained
with examples.
Events
covered
If the property is accidentally lost or damaged the insurer will
indemnify the policyholder.
An accident is defined as an unforeseen and unintended event
or occurrence.
The indemnity provided under both the specified and the
unspecified items provides the insurer with the option to:
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Pay for lost or damaged items
To repair them or
To replace them
For example if a policy holder finds themselves lucky enough
to be leaning over the fence at Victoria falls, when a gust of
wind blows their jacket over the edge into the Falls, this is
construed as an accidental loss and the insured will be
indemnified, by either replacement or payment for the lost
jacket, less any excess applicable.
Most insurers provide cover on a new for old basis, whilst
others may depreciate for wear and tear (this is very rare in
today’s market.) The insurer will only pay for the replacement
or repair of the item lost or damaged provided the sum
insured is adequate, if this is not the case then the policy
holder will bear a ratable proportion of the loss or damage
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Assessment
criteria 1.3
The advantages of an all risks policy over a household
policy are explained with examples
Advantages
of an all risks
policy
A Householders policy will usually cover the items within the
confines of the property against an insured peril e.g. burglary
or fire. An all risks policy will include accidental loss or
damage inside and outside the home. The territorial limits of
the all risks policy are far wider than the household policy.
For example if a policyholder has an all risks policy in place for
unspecified items, when he/she leaves their home, the items
they are wearing or carrying on or about them, will be covered
under their all risks policy, hence should they get mugged in
the street, they will be able to submit a claim for the items
stolen or damaged in the theft, should they be involved in an
accident and the items they are wearing are accidentally torn
or broken, they would be able to submit a claim under their all
risks policy.
As the household policy is restricted to specified insured perils,
and only covers the items while they are contained in the
confines of the house it is clear that there are a number of
advantages of taking out an all risks policy in addition to an all
risks policy.
Assessment
criteria 1.4
Territorial limits on an all risks policy are explained
with examples
Territorial
limits
In most all risks policies they will automatically provide
worldwide cover. However, it is advisable to check any
particular policy to ensure this is the case, because some
insurers do limit the geographical area or alternatively,
stipulate that worldwide cover applies for a limited period,
perhaps 90 days, during any 12 months of insurance.
In essence the all risks policy usually covers the policyholder
anywhere in the world, including transit by land. Sea or air.
An interesting example may be if you are traveling to another
country by airplane, you are flying over the Atlantic ocean,
when you accidentally drop your spectacles on the floor,
someone walks by and steps on them, even though you are in
the middle of the Atlantic ocean on an airplane you will still be
covered by your all risks policy for this accidental damage.
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Assessment
criteria 1.5
The concept of a specified and unspecified risk is
explained as it applies in an all risks policy
Specified
Items
When insuring a specified item it will have a separate sum
insured, this sum is the maximum amount of any claim
settlement. At the time of a loss an insurer will require some
proof off value of the item, say a quotation or valuation. Serial
numbers of cameras, radios, cell phones should be obtained
when the insurer goes on risk.
Before the insurer goes on risk he might also require valuation
certificates for the items over a certain value. It is normally in
the region of R1000, but can be higher or lower. For example,
jewelry, Persian rugs, furs, antique items and paintings would
need prior valuation because it would not be possible to
establish the true value after the article is lost or destroyed,
Other articles such as videos, cameras, car radios, binoculars,
pen sets etc. can be established by phoning a supplier and
quoting the make and model numbers of the article. The sum
insured however must be adequate.
When insuring under the unspecified section of the policy
insurers will normally request that a sum insured is given for
clothing and a separate sum insured for general unspecified
items i.e. personal effects. The policy would usually put a
limitation of a percentage of the sum insured for any one
item, i.e. 20% of the sum insured. Therefore the overall sum
insured covers a multiple of items but assuming that the
policyholder will only have a maximum amount at risk at any
one time.
When setting the sum insured under the clothing and the
unspecified all risks sections, the policy holder should takes
into account the maximum items at risk at anyone time. If
there is a family of four, then items of clothing and personal
effects normally carried on or about them needs to be
established to set an accurate sum insured, as all these items
are at risk as they leave the home, where the household
contents cover would cease.
In practice however the policyholder generally selects a value
that he is happy without considering the matter in great
detail.
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Assessment
criteria 1.6
The underwriting criteria in respect of high value items
are explained with reference to the requirements of a
specific insurer.
High Value
items
If an insurer is asked to insure a high value item, they will
follow their underwriting criteria, which will normally require
greater details regarding the item to be insured, such as a
valuation certificate or original purchase invoice. They will also
need to assess the valuation amount to check if the amount
falls outside their retention limit, which would then lead to the
need for facultative reinsurance.
Some high value items may be coin collections or stamp
collections. In these cases insurers would normally limit their
liability to a specified amount. This is often based on the
Stanley Gibbons catalogue for stamps. Coin collections values
are normally based on a percentage of the value calculated by
the Numismatic Society.
In some circumstances a special condition is applied relating
to the value of the articles. The condition will state if the value
is ‘admitted value or agreed value
Admitted
value
The difference between the Admitted value and agreed value
is explained as follows;
In this case a valuation is provided and it is noted on the
schedule. It is important that the wording is phrased correctly
as this is only the value of the item at a given time. In the
case of a diamond ring you might have a situation where the
ring is purchased for R50 000, the price of diamonds fall
subsequently, if the ring was to be replaced it could probably
be replaced for less than the original price.
Agreed value
The schedule should read ‘it is hereby noted that the details of
the ring are as those appearing on the valuation certificate
dated 15/08/2004.
In the case of Agreed value, the insurer agrees that if there is
a loss the basis of settlement would be that value. This is
normally used for antiques or pieces of jewelry. The
underwriter should be careful however, because if the term ‘it
is hereby agreed that the value of the item is R50 000’ were
used and there was a loss, even if the value has dropped the
underwriter it liable to pay that amount
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2.
Specific Outcome 2:
Differentiate between
specified and unspecified all risks
Assessment
criteria 2.1
Limit of liability is explained for specified and
unspecified all risks in five policy schedules
Limits of
Liability
Most insurers allow for a sum insured for unspecified items to
be noted on the policy schedule, there is normally a minimum
figure in the region of R5000, for items to be insured under
this section. Certain insurers may limit the sum insured per
individual items to a percentage of the sum insured. I.e. per
individual item limited to 20% of the sum insured.
The unspecified section of the policy is sometimes subject to
average; hence the insured will be liable for their ratable
proportion of any under insurance established at the time of
claim.
In practice average is very rarely applied as most all risk
claims a relatively small and are settled without the
appointment of a loss adjuster.
The limits under the specified section of the policy are subject
to a separate sum insured for each item; this will be the
maximum amount of any claim settlement. There is generally
no average clause applicable to specified items. It is however
important that the correct values are obtained at underwriting
stage and kept up to date.
If a stamp collection or a coin collection is specified then most
policies will stipulate a limit per stamp normally in the region
of R1000 per stamp or coin.
Some policies have additional limits if they have extensions
such as:
 “Golfers hole in one”

Loss of money (normally limited to R1000)

Pairs and sets (this is discussed in later notes)

Pedal cycles

Compact discs (limited to one unless specified)
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Limits of
Liability cont.
A “golfers hole in one” will usually be limited between R1000 and
R1500,
This amount is normally enough to cover the policy holder against
having to buy a round of drinks for the golf club, after scoring a
hole in one, as long as he/she was playing in an amateur game of
golf in terms of the rules at any recognized golf club. The
policyholder will have to substantiate this by producing written
confirmation from the club secretary.
Pedal cycles have an additional risk attached to them, hence most
policies will limit the cover if they are left unattended they will need
to be attached by a secure device to a permanent structure whilst
outside the boundaries of the residence.
Assessment
criteria 2.2
Reasons why valuation certificates or proof of purchase are
required in the event of a claim are explained with reference
to the type of risk and fraud.
Proof of
purchase
A valuation certificate does not necessarily provide proof of
purchase or ownership, but only the value of the item specified on
the certificate at the time of valuation.
In the event of a loss the insurer may accept the instruction manual
as proof, or the fact that the insured provided serial numbers or
receipts at the time the risk was accepted. Where there is difficulty
in proving the ownership and value of the item, the insurer may call
for photographs, affidavits, and generally seek some sort of proof of
existence of the item
and proof that the insured purchased and owned it, bank
statements, cheque foils, invoices etc.
Unfortunately on average approx 40% of insurance claims have
some element of fraud and with the type of risk involved in all risks
items it is all too easy to present a claim for an item that neither
exists nor is owned by the policyholder. It is therefore important
that both at underwriting time and claim time proof of purchase and
existence are given.
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Assessment
criteria 2.3
The unspecified section of an all risks policy wording is
analyzed and items that are not directly related to the
rating of the premium are identified in that policy
When analyzing the unspecified section of an all risks policy
you will note that there is no reference to the type or value of
items insured under the all risks unspecified section, hence
the type or value of these items have no impact on the rating,
a sum insured is selected and rated in accordance with the
amount chosen.
The insurer has indicated the items that fall under the
personal effects and general unspecified items, and allows an
overall rating for this section without taking specifics of the
articles they intend to insure into account, other than
generalizing.
Assessment
criteria 2.4
And
Assessment
criteria 2.5
Three exclusions under the specified section of an all
risks policy are identified in a specific policy.
Exclusions
In terms of the all risks policy there are not many exclusions,
but because they decide what is covered they are obviously
important. The normal exclusions are noted hereunder but
each policy must be examined before settling a claim.
Sports
equipment
Three exclusions under the unspecified section of an all
risks policy are identified in a specific policy
Most policies exclude loss or damage to sports equipment
whilst in use.
Therefore if you break your squash racquet whilst playing
squash there will be no cover, but if you broke it on the way
to the squash court it would be covered.
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Detention
There is no cover for loss or damage arising from
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Detention
Confiscation
Destruction
Or
Requisition
By customs or other officials or authorities. Normally goods,
which are imported illegally, if, found, would be confiscated
and anything, which is against public policy, is not insurable.
Motor Vehicle
There is no cover for property lost from an unattended motor
vehicle unless the property was contained in a securely locked
boot or glove compartment. There must also be forcible and
violent entry to the vehicle.
The exclusion normally does not apply to fitted car radios
unless the radio or its face is detachable.
Wear and tear
There is no cover for:
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10375 – Learner Guide
Wear and tear
Depreciation
Rust
Moth, vermin, insects, larvae
Any process of cleaning, dyeing, repairing or restoring
Gradual deterioration which includes the action of,
light, atmospheric or climatic conditions
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Breakdown
Mechanical and electrical breakdown is excluded, unless
accompanied by other damage. For computers and the like if
there is maintenance contract an engineering policy would
give this cover.
Cash
There is no cover for
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Cash, bank notes, currency notes
Bonds, coupons
Stamps
Negotiable instruments
Title deeds
Manuscripts
Securities of any kind
Travel tickets
Collections of course can be covered if specified. Some policies
cover cash and negotiable instruments up to a limit.
Photographic
Equipment
Sound and
video tapes
Loss or damage to photographic and optical equipment whilst
it is being used for
 Commercial or professional purposes
 Expeditions of discovery
 Research or
 Underwater photography
Loss or damage to sound or video recording tapes other than
by fire or theft. Indemnity in this instance is the value as
unused material
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Assessment
criteria 2.6
The need for additional insurance cover for a computer
or laptop is explained in terms of replacement of data.
Laptop and
replacement
of data
Laptops and personal computers may be specified under some
all risks policies, however there is no cover for the loss of
data. The cost of reproducing data can become quite
expensive and most insurers offer additional cover for the
reinstatement of data, at additional premium.
The cover provided will indemnify the insured for all costs and
expenses necessarily and reasonably incurred in the
recompilation of data and or programmes recorded on the
data carrying media lost as a result of an accident provided
that such costs and expenses are not caused by programme
errors, viruses, incorrect entry or the inadvertence
cancellation or corruption of data.
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3. Specific Outcome 3:
Describe the optional cover
available under all risks.
Assessment
criteria 3.1
Optional cover required under the caravan section of an
all risks policy is identified in a specific policy
document.
Contents of
caravan
Most insurers will require the contents of the caravan to be
specified under the specified section of the all risks policy. A
definition from one policy in the market is as follows:
“Property insured means household goods, which belong to
you or are your responsibility, while in the caravan or attached
side tent.”
Indemnity
And
Average
Assessment
criteria 3.2
If the property insured is accidentally lost or damaged the
insurer will pay for or may choose to repair or replace it. The
amount payable is normally the current replacement cost of
the item. The average condition applies to this optional cover.
Reasons why caravans are regarded as high risk low
rate are explained and an indication is given of the
exclusions under a specific all risks policy
There are special exclusions normally applicable to this type of
cover one of the policies in the market indicate them as:
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Theft of property insured while the caravan or attached
side tent is unoccupied unless there is forcible and
violent entry.
More than 255 for any one article
The permanent fixtures of the caravan
Stamp and coin collections, money, documents,
jewellery, furs or any article more specifically insured.
Loss or damage caused by fraud or dishonesty by any
person to whom the caravan is on loan or hire.
Theft of items from a caravan or an attached tent present an
easy target for thieves indicating a high risk, not to mention
the risk of accident and overturning whilst the caravan is
being towed. However, whilst the caravan and contents
represent a high risk this risk normally only materializes a
couple of times a year, as policy holders set off on holiday or
weekends away, so insurers adjust the rate of premium
accordingly.
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Assessment
criteria 3.3
Limitations on cover of items stored in a bank vault are
explained with reference to a specific policy document
Limitations
In cover
If the specified item under an all risks policy is being stored in
a bank vault, the policy schedule will normally reflect this. The
rating that has been applied is normally just a fraction of the
rate charged for the item. However the limitation for items
stored in bank vaults indicates that the insurance only applies
when the item is contained in the safety deposit box.
From time to time an insured may wish to remove an item
from the safety deposit box, should this be necessary the
insurers will need to be informed and assess the risk for the
item, charging the appropriate premium which the risk
attaches.
It is not difficult at the time of a claim to establish where the
item was as the safety deposit procedures with in financial
institutions are very strictly controlled, indicating the exact
time and date of entry to the safety deposit box. Any actual
theft from the bank vault would be extremely unlikely, in the
unlikely event of a robbery taking place the bank would be
able to establish which safety deposit boxes had been taken or
broken into.
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4. Specific outcome 4:
Explain indemnity under an all
risks policy
Assessment
criteria 4.1
The basis of indemnity is explained for a specified all
risks policy
Basis of
indemnity
The basis of indemnity is to place the insured in the financial
position he /she was immediately prior to the loss. In order to
achieve indemnity insurers will consider the following options
in the event of a loss:



Pay for the lost or damaged articles
To repair them or
To replace them.
The basis of indemnity is that the insured should not benefit
financially from loss, hence if a policyholder claims for a watch
which he bought overseas, he may have obtained the watch a
good price, insurers would probably choose to replace the
watch as they receive good discounts from watch suppliers,
hence the insured would be put back in the same financial
position by receiving a replacement watch of the same
description as the one lost, if insurers were to have paid him
out in cash it would need to be net of the discount which could
have been obtained if it was replaced, again in this way it is
unlikely that the insured would have benefited financially.
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Assessment
criteria 4.2
The limit of indemnity in a specified all risks policy is
explained for five cases
Limit of
indemnity
The limit of indemnity for specified property will be dependant
on the specified sum insured stated on the schedule, this is
the separate sum insured selected for the item. The insured
will be expected to produce some proof of value at the time of
a loss i.e. valuation or quotation.
Valuations
Before the insured goes on risk they will also require valuation
certificates for items over a certain value, this value varies
with each insurer. Jewellery, paintings and furs would require
a valuation, as it might be difficult to establish the value post
loss.
Using the valuation certificate and possibly the proof of
purchase, insurers will be able to contact their suppliers to
establish the current replacement cost of an item which has
been lost or stolen, should the replacement cost be less than
the sum insured stated in the schedule, then the insurer will
only be liable for this amount. Should the replacement cost of
the item be more than the sum insured then the insurers will
only pay out the sum insured stated in the schedule and no
more.
For example a Video recorder is specified and the underwriting
department at the time issuing the policy has recorded the
details of model and serial number. The video recorder is
reported as stolen during a burglary, the client may be asked
to produce the original invoice and manuals for the item. With
this information to hand the insurers will be able to establish
what a similar replacement item would cost, taking into
account the large volume discounts available to them.
Provided the sum insured is adequate the policyholder would
be given a similar replacement to the one lost, with the updating of technology these days the policyholder if likely to be
more than pleased with his updated replacement.
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Assessment
criteria 4.3
The settlement of a claim under the pairs and sets
clause is explained for five case studies
Pairs and sets
clause
Some Insurers have this clause in their policies, they do so in
order to limit their liability to paying only for the item lost or
damaged and not to the whole set. They will normally exclude
the special value attached to the article as a result of being
part of a pair or set.
One of the insurers wordings reads as follows:
“Where an item consists of articles in a pair or a set the
company will not pay more than the value of the parts lost or
damaged.”
Some examples of pairs and sets are a pair of diamond
earrings, a set of golf clubs or an antique set of china.
An example of a claim where the pairs and sets clause may
apply would be for a pair of antique statues, whilst the pair
together may be worth a substantial amount of money, if one
is accidentally damaged the pair’s value is substantially
decreased. In terms of the pairs and sets clause it is not the
responsibility of the insurer to compensate the policyholder for
the loss of the pair, but to merely indemnify the policyholder
for the actual value of the one statue that has been broken.
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Assessment
criteria 4.4
The locked boot warranty in a specified policy wording
is explained in terms of exclusions
Locked boot
warranty
Some insurers will place a locked boot warranty onto an
unspecified policy wording, this can usually be found in the
specific exception or exclusions sections. Loss or
disappearance of the insured property from any motor vehicle
left unattended is excluded unless, the disappearance follows
upon forcible violent entry into or exit from the vehicle, and
the cover is restricted to the property contained in a locked
boot or concealed in a compartment forming part of the locked
vehicle.
This exclusion normally does not apply to fitted car radios
unless the radio or its face is detachable.
An example of a case where this warranty may apply would be
if a policy holder left his Rayban sunglasses on the dashboard
of his vehicle, they were not contained in a locked boot or
compartment but merely inside the locked vehicle, the vehicle
is forcibly and violently entered and the glasses stolen.
If the warranty were applicable then there would be no cover
for the glasses.
Assessment
criteria 4.5
The excesses in a specific policy are identified for five
different scenarios
Unspecified
Insurers will apply a general excess to unspecified all risks
sections of the policy, these may range from R100 to R1000
or more, this excess normally will apply to each and every
claim.
Specified
The specified section of the all risks policy will not normally
attract excess, unless the insurer has assessed the risk and
decided that the insured should bear the first portion of any
loss. This may be the case if the claims experience is not very
attractive or vary on the type of item to be insured.
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Assessment
criteria 4.6
The consequences of giving incorrect advice are
explained in terms of policyholder protection legislation
and professional indemnity.
Policy holder
protection
Legislation
The policyholder protection legislation applies to policies
issued to natural persons (individuals, not business
undertakings) that require written disclosure by the insurance
broker, regarding the insurer and the insurance broker.
The disclosures include:
Insurance broker
 Name, physical address and postal address and
telephone number.
 Legal status and any interest in an insurer
 Whether or not in possession of professional indemnity
insurance
 Detail of how to institute a claim
 Rand amount of fees and commission payable
 Written mandate to act on behalf of the insurer.
Insurer
 Name, physical and postal address and telephone
numbers.
 Telephone number of the compliance department of the
insurer
 Details of how to institute a claim and or complain
 Type of policy involved and extent of premium
obligations you assume as policyholder
 Manner of premium payment, due date of premiums
and consequences of non-payment
Any material changes to the above, a well as other details
such as loadings excesses and special conditions.
There are additional requirements:
 Reasons must be given for the repudiation of claims
 Debit orders or policies shall not be unilaterally
terminated without notice
 Not less than 15 days of grace for payment of
premiums
 Policyholders must not sign blank or partly completed
policy forms
 Policy holders are entitled to a copy of the policy free
of charge
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Professional
indemnity
Consequences
Professional indemnity insurance may be taken out by an
insurance broker to protect him against the professional
negligence that may be committed by the professionals
working within the organisation. If the employee fails in his
duty to the client wherein he is required as a professional to
exercise reasonable care and skill, and the client suffers a loss
as a result, the client may sue for negligence
There are of course other consequences of giving incorrect
advise which may include, poor publicity, disciplinary action
against the employee, and generally a bad reputation for the
organisation overall.
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Glossary of Terms
Accident
An unforeseen and unintended event or occurrence
Adjuster/
Assessor
See Loss Adjuster
Agreed value
The sum to be paid in the event of a total loss under a valued policy
Average
In general, this is a policy provision that has the effect of reducing a
claim payment where under-insurance is discovered.
Broker
A professional full time independent agent or intermediary
Betterment
The value of the improvement in an insured property when it has been
repaired or rebuilt following loss or damage
Claim
A demand made by the insured for payment after the occurrence of loss
or damage covered by the policy
Claim form
A form supplied by an insurer to enable an insured to lodge a claim in
terms of the policy
Co-insurance
The division of a risk between two or more insurers, where each is
individually liable to the insured for their proportion of claims
Comprehensiv
e
Policy
Contribution
A policy covering a wide variety of perils, part of a contract that must be
complied with by one party or another
The principle whereby two or more insurers covering the same risk
contribute proportionally to any losses
Damages
Depreciation
An amount of money claimed by or awarded to a third party as
compensation for injury or loss
Direct insurer
The extent to which (insured) property has diminished in value due to
factors such as wear and tear
Endorsement
An insurer in contact with insuring members of the public or corporations
Documentary evidence of some alteration to a policy of insurance
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Exception
A peril specifically excluded from the insurance
Excess
That part of a loss for which the insured is liable
Fire
The accidental or fortuitous ignition of something that should not be on
fire
First amount
Payable
The amount payable by an insured in the event of a claim
Indemnity
The placing of the insured in the same financial position after the loss as
he or she was in immediately prior to the occurrence
Insurance
A risk transfer agreement whereby the responsibility for meeting losses
passes from one party (the insured) to another (the insurer on payment
of a premium
Insurance
Policy
A document that is evidence of a contract of insurance
Insured
A person or organization purchasing insurance
Insurer
A company or society transacting insurance business
Knock for
Knock
Agreement
An agreement between motor insurers whereby following a collision,
each pays the cost of repairs to its own policy holders vehicle, regardless
of fault, provided that the vehicles involved are all insured for accidental
damage
Liability
A claim upon ones assets by another person.
Loss adjuster
An independent, qualified person who assesses the size or value of a loss
on behalf of an insurer, but who may also be employed by an insured to
look after is interests in a loss settlement
Loss
prevention
Activities undertaken to prevent losses from occurring
Market value
The price at which an investment can be sold or bought at any specific
time
Negligence
Failing to act in what the law considers to be a reasonable manner
Peril
A contingency or fortuitous happening that could cause losses
Policy
Written evidence of the terms of an insurance contract
Policy holder
The insured person
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Premium
The money paid by the insured to the insurer for cover as provided in the
policy
Professional
reinsurer
A reinsurance company not transacting any direct insurance business
Proximate
cause
The direct cause of a loss uninterrupted by any other event
Rate
The sum charged per unit of exposure by which the premium is
calculated
Reinstatemen
t
The making good of damaged property, the restoration of the sum
insured
After settlement of a loss on payment of an additional premium
Reinstatemen
t of sum
insured
The restoration of the sum insured after it has been reduced through the
payment of a claim
Reinsured
An insurer or reinsurance company that accepts contracts of reinsurance
Reinsurer
An insurer or reinsurance company that accepts contracts of reinsurance
Replacement
Cost
Retention
limit
The value of property as indicated by the current purchase price of a
similar article
The maximum liability that an insurer wishes to keep for his own account
in respect of a particular risk
Risk
a) A situation that cannot be controlled or perfectly foreseen;
b) The subject matter o an insurance contract
Schedule
The list of personal details of the insured and the subject matter of the
insurance policy
Short term
insurance
Insurance that operates on a year to year basis, and which may be
terminated by the insurer or the insured
Subrogation
Sum Insured
The right of one party to stand in a place of another and take up the
latter’s legal rights against a third party
Third party
The monetary limit of the insurers liability under a policy
Third party
insurance
A person who is not a party to a contract
Motor insurance cover providing compensation for injury to third parties
and damage to their property
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Third party
fire and theft
insurance
(motor)
Third party insurance, plus cover for fire damage to, and he theft of, the
insured’s own vehicle
Treaty
reinsurance
A contract between an insurer and a reinsuring company under which the
former agrees to give the reinsurer aggress to accept reinsurance for
risks falling within the terms of the agreement.
Under
insurance
Insurance for a sum insured less than the value at risk
Underwriter
An insurer, a person who makes decisions on whether or not to accept
insurance business
Underwriting
The process of assessing a proposal for insurance to decide on the
acceptability, and if so, on what terms
Valuations
A list of property with values allocated to each item as the basis of
insurance
Warranty
A condition that must literally be complied with
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