The Claims Desk, glossary of insurance terms
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
A.
Accidental Damage - This normally denotes damage that is caused by sudden, external and unforeseen means. This is an extension to an insurance policy and can normally be added for an additional premium.
All Risk Policies - These are policies that provide cover for loss or damage how so ever caused, but are subject to stipulated exceptions.
Assessors - Otherwise known as Loss Assessors. Loss Assessors act on behalf of the Policyholder/Claimant and exclusively represent their interests. Loss Assessors deal with a whole range of Insurance Claims and need to be regulated and registered by the FSA ( Financial Services Aurthority)
Alternative Accommodation - Most household policies provide cover for the reasonable cost of alternative accommodation while the home is uninhabitable following damage caused by fire, flood, escape of water etc. Alternative accommodation cover is subject to policy limits.
Average - Some policies will penalise a Claimant/Policyholder for being under insured. For example, if a Policyholder/Claimant is 30% under insured the Insurance Company may reduce the claim by 30%. This is a complex area and advice should be sought from a qualified Loss Assessor.
B.
Betterment – If repairs or replacement places the Policyholder/Claimant in a better position than they were before the loss or damage, then the Insurance Company may expect the Claimant to make a contribution.
C.
Chartered Institute of Loss Adjusters (CILA) – A professional body controlled by regulation and examination, which tries to preserve the standards of Loss Adjusters.
Claims Form – Issue of a Claim Form is not an admission of liability and many Insurance Companies no longer issue Claim Forms, but rely on information provided by the Claimant. If a Claim Form is issued the Policyholder/Claimant must complete as fully as possible.
Claim Conditions – These are conditions that are set out in the insurance policy. One claim condition sets out the duties of the Claimant which must be strictly complied with. Failure to do so may have serious implications for the claim. A qualified Loss Assessor should be consulted.
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D.
Duty of Disclosure – It is an implied condition in all contracts of insurance that the proposer makes a full and complete disclosure of all ‘material facts’ relating to the risk/property to be insured. If a material fact is deliberately concealed that may be considered fraud. Insurers may rely on this to avoid dealing with a claim.
E.
Endorsement – An endorsement is an alteration to the policy wording to take account of changes required by the specific requirements of the risk the Insurance Company are covering. It is crucial to understand the intention of endorsements. If in doubt seek professional advice.
Excess – This is an amount of each and every claim which is not covered under the terms of the policy.
Escape of Water – Most insurance policies provide cover for damage caused by an escape of water from “fixed water apparatus”. All policy wordings differ and it is essential to check the precise wording/definition.
F.
Flood – Floods must not be confused with storm damage. Most policies provide cover for an escape of water from the normal confines of any natural watercourse, lake, reservoir, canal or dam, or inundation from the sea.
Financial Services Authority (FSA) – The Financial Services Authority are the Regulator of all providers of financial services in the United Kingdom.
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G.
H.
I.
Indemnity – This is the method by which Insurance Companies settle claims. This is normally defined in the policy as “repair, reinstatement, replacement or cash payment”. Generally Insurers have the option as to how they wish to settle claims. An experienced and qualified Loss Assessor can assist in advising the best form of settlement.
Insured Perils – These are the events that the Insurance Company provide cover for under the terms of the policy, ie, fire, theft, flood, storm, escape of water, accidental damage cover, business interruption etc.
J.
K.
L.
Loss Adjusters – An insurance claims expert often appointed by the Insurance Company to act as an intermediary between the Insurance Company and the Policyholder/Claimant. In theory the Loss Adjuster is impartial, but in reality their fees are paid by the Insurance Company and represent their interests. They do not represent the interests of the Claimant.
Loss Assessor – A Loss Assessor is an insurance claims expert who will normally be appointed by the Claimant/Policyholder to represent their interests exclusively. The Loss Assessor will present the claim to the Insurance Company/Loss Adjuster and/or conduct all negotiations on behalf of the Claimant/Policyholder to ensure they receive a fair settlement under the terms of the policy.
M.
Material Fact – A material fact is a fact that must be disclosed by the policyholder to the Insurance Company to enable the Insurance Company to make a decision whether to insure that persons property or business.
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N.
O.
Ombudsman (Financial Ombudsman Service – FOS) – The Financial Ombudsman Service is the official body that receives complaints, disputes and claims made in connection with insurance policies. The Financial Ombudsman Service will facilitate the satisfaction, settlement or withdrawal of claims by a binding award where appropriate.
P.
Perils(See Insured Perils)
Premium – This is a sum of money paid by the Policyholder to the Insurance Company in return for certain cover provided for certain Insured perils.
Proximate Cause – It is a fundamental principle of insurance law that the Insurance Company is only liable for loss or damage “proximately” caused by the peril covered under the terms of the policy. The proximate cause is normally the “dominant” cause.
Q.
R.
S.
Storm – Storm normally denotes violent winds accompanied by rain, hail or snow. Storm damage does not mean persistent bad weather, heavy or persistent rain.
Sum Insured – The sum insured is the maximum amount recovered under a policy for each section of the policy.
Subsidence – Subsidence is the settlement of the land often caused by building foundations on different types of soil which react differently to changes in soil moisture content causing movement, or removal of moisture from clay soil, particularly by tree roots in drought conditions.
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T.
U.
V.
W.
Without prejudice – Where liability is in dispute Insurers may make an offer “without prejudice”, ie, without an admission of liability.
X.
Y.
Z.