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 which 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 of 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 which 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 uncertainty about financial loss. There are two types of risks. First is the Speculative Risk where financial loss is difficult to measure and cannot 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.
