To make things a little easier, here is a simple A–Z guide of common insurance terms. Whether you are reviewing your cover, lodging a claim, or speaking with a broker, this guide can help you better understand some of the language used in the insurance industry. Please note that the below are common definitions and may vary across policies and providers.
Accident: An unexpected event that causes damage or injury.
“Insurance may cover you if a client injures themself at your workplace.”
Broker: A person who helps you find the right insurance and deals with the fine print.
“Our broker found us cover with less hassle.”
Claims: A request you make to your insurer for payment after a loss.
“After the storm, we lodged a claim to repair the roof.”
Dependents: The loved ones who rely on your cover.
“Life insurance helps protect your dependents financially.”
Excess: The amount you pay out of pocket when making a claim.
"After the accident, we paid the excess before the insurance covered the rest.”
Fraud: Losses that arise from dishonest acts or omissions.
"A policy may protect against losses from fraud or dishonesty.”
Gross Premium: The total cost of an insurance policy before any discounts are applied and including charges such as taxes or fees.
"The gross premium on the policy includes government charges and insurer fees.”
Hazard: Anything that increases the likelihood of a loss or damage occurring.
“Storing flammable materials incorrectly can create a hazard.”
Insurance: A financial protection arrangement where you pay a premium to an insurer in exchange for cover against certain risks.
“Insurance from insurance.com.au can help protect your business from unexpected costs.”
Joint Policy: Two or more people or entities who share ownership of an insurance policy.
“The business partners were listed as joint policyholders on the public liability policy, so both had equal responsibility for the cover.”
Known Threat: A risk or danger that has already been identified and may increase the likelihood of a loss or claim. Insurers may take known threats into account when assessing coverage or premiums.
“The property was located in a bushfire-prone area, the insurer considered bushfire a known threat when assessing the policy.”
Liability: Your legal responsibility for injury, damage, or loss caused to another person or their property.
“Public liability insurance may help if a customer is injured on your premises.”
Market Value: The current replacement or sale value of an asset, often used to determine insurance cover.
“The insurer assessed the market value of the car before deciding how much to pay for the claim.”
Non-Disclosure: Failing to provide important information to the insurer that could affect their decision to offer cover.
“Non-disclosure of previous claims may impact your policy.”
Outstanding Claims: Claims that have been reported to the insurer but are not yet settled or finalised.
“The business still had several outstanding claims under review.”
Policyholder: The individual or business that owns the insurance policy.
“The policyholder is responsible for paying the premium.”
Quote: An estimate of the cost of insurance based on the information provided.
“We requested a quote before deciding on the level of cover.”
Run-Off Cover: Insurance that protects against claims made after a business has stopped operating or after someone has left a role.
“Run-off cover can help protect professionals after they retire.”
Statute of Limitations: The legal time limit within which a claim or legal action can be made.
“The statute of limitations determines how long someone has to bring a claim.”
Total Loss: When the cost to repair or recover an item exceeds its value, or it is completely destroyed.
“The car was declared a total loss after the accident.”
Underwriter: The insurer or specialist who evaluates risk and decides whether to provide insurance and on what terms.
“The underwriter reviewed the application before approving cover.”
Valuation: An assessment of the value of property or assets for insurance purposes.
“A professional valuation helps ensure the property is insured for the correct amount.”
Warranty: A condition in an insurance policy that must be met for the cover to remain valid.
“The policy included a warranty requiring regular maintenance checks.”
(E)xlusion: A situation, event, or item specifically not covered by an insurance policy.
“The policy had an exclusion for storm damage to sheds, so the claim wasn’t paid.”
Young Drivers: A driver who is under 25 and may face higher premiums due to increased risk.
“The insurance premium was higher because the policy included a young driver under the age of 25.”
Zoning Restrictions: Local regulations that can affect insurance eligibility or premiums.
“Because the property was in a commercial zone, the insurer required extra cover for business equipment under the council’s zoning restrictions.”
Insurance doesn’t have to be complicated. By understanding some of the most common terms used in policies and claims, you can make more informed decisions about your cover and avoid surprises when it matters most.
Still confused? Our insurance.com.au insurance specialists are always happy to assist. Contact us here.
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