Getting to grips with the jargon
When you’re trying to navigate the complex world of strata insurance, you’re bound to come across a lot of technical terms and industry jargon. We’ve simplified the main things you need to know below.
Buying process
Broker
Independent intermediary who sells policies from different insurance companies.
Insurer
The insurance company that provides your insurance policy.
Duty of disclosure
You must tell an insurer everything relevant to its decision to insure you. It will impact your premium and may lead to special conditions on your policy.
Non-disclosure
If you don’t tell an insurer important information relevant to your property, you haven’t complied with your duty of disclosure and an insurer may not pay a claim.
Claims history
The number of claims you’ve made and what you’ve claimed for provides a picture of your potential risk.
Sum insured
The maximum amount your insurer will pay for a claim.
Underwriting
The process an insurer uses to work out your level of risk and calculate the premiums it will charge you to insure that risk.
Underinsurance
Occurs when your sum insured isn’t enough to cover the value of the items you’re insuring.
Claims process
Assessor
Checks claim details and determines the insurer’s liability for loss based on the terms and conditions of your policy.
Claim
Submitted after a loss is suffered.
Settlement
What you receive from an insurer when your claim is agreed and processed. Can be a repair or financial payout.
Excess
Any amount you must pay towards a claim and is usually deducted from any settlement amount.
Your insurance policy
Policy
A contract between you and the insurer that details the circumstances for which you’re covered or not covered.
Certificate of Insurance
Legally required proof that you have an insurance policy in place.
Premium
The amount you pay your insurer for coverage.
Coverage
Includes the risks you’re insured against, the properties covered, the people insured and the limits of compensation.
Defined events
The occurrences that cause loss and damage listed in your policy.
Risk
Exposure to a specific threat, hazard or peril that might cause injury or financial loss.
Types of cover
Indemnity
A compensation payment that protects you against damage or loss so you remain in the same state or financial position you were in before a loss.
Liability
Being financially or legally responsible for something.
Public liability
Covers a person or organisation’s liability to another person or organisation for causing injury or property damage.
Reinsurance
Insurance for insurance companies. It’s used to lower their risk or reduce their exposure to a specific catastrophic event.
