Common Insurance Terminologies

Aperçu

Insurance has a private language. A trader says the fire destroyed goods worth two million naira; the insurer replies with words like average, excess, salvage and material fact, and suddenly the cheque is for a different figure. None of it is trickery. Each of those words is a precise technical term, and using the wrong one, in an examination or at a claims desk, changes the meaning completely.

This lesson gives you that language, but not as a list to memorise. You will learn the core terms grouped into the four families they belong to: the words that measure and limit a claim, the words about honesty when the contract begins, the words for the documents themselves, and the words for how the market accepts and prices a risk. Learn each term beside its family and you will never confuse an excess with a franchise, or a warranty with a representation, again.

Objectifs

  1. Define the common terms used in insurance practice and use each correctly in context
  2. Explain the terms relating to cover, including sum insured, excess, franchise and average
  3. Explain the terms relating to claims, including salvage, ex gratia payment and abandonment
  4. Explain the terms relating to the market, including underwriting, premium, endorsement and warranty
  5. Use the correct technical term when describing a given insurance situation

Note de cours

Two candidates sit the same paper. Both know that a fire destroyed a warehouse and that the owner had under-insured the stock. One writes that the insurer will apply the excess and reduce the claim; the other writes that the insurer will apply average. Only the second is correct, and the difference is a whole set of marks. Insurance is a subject of exact words. A term used loosely is a term used wrongly, and examiners test that precision every single year. The good news is that the vocabulary is not random: every term earns its place by serving one of a small number of underlying principles. Learn the principle and the words fall into place.

Évaluation de la leçon

Félicitations, vous avez terminé la leçon sur Common Insurance Terminologies. Maintenant que vous avez exploré le concepts et idées clés, il est temps de mettre vos connaissances à lépreuve. Cette section propose une variété de pratiques des questions conçues pour renforcer votre compréhension et vous aider à évaluer votre compréhension de la matière.

Vous rencontrerez un mélange de types de questions, y compris des questions à choix multiple, des questions à réponse courte et des questions de rédaction. Chaque question est soigneusement conçue pour évaluer différents aspects de vos connaissances et de vos compétences en pensée critique.

Utilisez cette section d'évaluation comme une occasion de renforcer votre compréhension du sujet et d'identifier les domaines où vous pourriez avoir besoin d'étudier davantage. Ne soyez pas découragé par les défis que vous rencontrez ; considérez-les plutôt comme des opportunités de croissance et d'amélioration.

  1. A voluntary payment made by an insurer in respect of a loss for which it is not technically liable under the policy is called: A. A franchise B. An ex gratia payment C. A rebate D. An excess Answer: B
  2. The written document used to alter the terms of a policy that is already in force is the: A. Proposal form B. Cover note C. Endorsement D. Certificate Answer: C
  3. A policy is subject to a franchise of 60,000 naira. A loss of 50,000 naira occurs. How much will the insurer pay? A. 50,000 naira B. 10,000 naira C. 60,000 naira D. Nothing Answer: D
  4. Which of the following terms belongs to the principle of utmost good faith? A. Salvage B. Material fact C. Franchise D. Reinstatement Answer: B
  5. A car insured for 1,200,000 naira is a total loss. The insurer pays the claim in full and later sells the wreck for 200,000 naira. The insurer's net cost is: A. 1,400,000 naira B. 1,200,000 naira C. 1,000,000 naira D. 200,000 naira Answer: C

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Questions précédentes

Vous vous demandez à quoi ressemblent les questions passées sur ce sujet ? Voici plusieurs questions sur Common Insurance Terminologies des années précédentes.

WAEC SSCE - Insurance - 2016

Question 1 Rapport

Explain the following terms as used in insurance business:

(a) Surrender value

(b) Days of grace

 (c) Ex-gratia payment

 (d) Endorsement

(e) Disclosure.
 

Voir la réponse