Accident:
A mishap or an untoward event that is not expected or designed.
Deductible or Excess:
The amount of a loss agreed to be borne by the insured himself.
Hazard:
Hazard is the condition that may create or increase the chance of loss arising from any peril.
Insurance:
Insurance helps to indemnify the financial loss of high value in return for payment of a comparatively less amount of money (premium). It is the process of sharing financial loss of the ‘few’ from a common fund created by the contribution of ‘many’ equally exposed to the same risk.
Insured:
The party who seeks protection against a particular risk and is entitled to receive money from the insurer in the event of the happening of the stated contingency is known as the insured. An insured is generally a policyholder.
Insurer:
The Party, which agrees to pay money on the happening of a contingency, is known as the insurer. Mostly, the insurers are insurance companies.
Nominee:
A nominee is a person designated by the policyholder to receive the proceeds of an insurance policy upon the death of the insured.
Peril:
Peril is the cause of loss. For example, fire, earthquake, etc.
Policy:
The document, which contains the terms and conditions of the insurance contract, is termed the insurance policy.
Premium:
The amount that is paid by the insured to the insurer as consideration of the insurance contract is known as the premium. In simple words, a premium is the price of insurance.
Reinsurance:
When insurers insure a risk again, it is called reinsurance. Reinsurance is the mechanism of risk transfer from the insurers to the reinsurers. Reinsurers can be direct insurers and/or specialized reinsurance companies. As insurance is a contract between the insured and insurers, reinsurance is a contract between insurers and reinsurers.
Risks:
Risks are uncertain about financial loss. There are two types of risks. First is the speculative risk, where financial loss is difficult to measure and can not be insured. Second is a pure risk where the financial loss can be measured and can be insured.
Salvage:
Property which is saved from loss or damage.
Sum Insured:
The monetary limit of liability of insurers.
