Unless you work or are well-versed in the insurance industry and its machinations, then these terms might be a bit alien to you. While a typical policy will contain thousands of words to read through, here are 10 important terminologies that you will encounter and need to understand when purchasing insurance, making a claim, or understanding your policy.
Simply put, it’s what the policy will take care of. Whatever is covered will be protected under the insurance policy.
A claim is a request for payment or compensation from the insurance company.
In car insurance-speak, comprehensive means that all involved in an accident will be taken care of. That means that the policyholder and the affected party will be covered. This is a type of insurance policy that isn’t mandatory but highly recommended.
Compulsory Third Party Liability
This phrase is a lot to unpack, but compulsory means that it is needed or required, and third party means the other person involved. Liability put simply, is an assumed responsibility or a mandatory assumption of responsibility. Altogether, the phrase is a type of insurance policy that is required for a vehicle to be registered.
Harm or loss to an individual or property
The value of a vehicle is determined by the demand and sales in the market. When the insurance policy is being made, this value establishes a compensation limit. The market value will also determine the write-off value of the vehicle.
Not a birthday party or a gathering, but a group of people or a person. In insurance-speak, you will encounter the terms, first party and third party. If you’re talking about the first party, you’re talking about yourself and your companions and assets, and when you talk about a third party, it’s someone else or their companions and assets.
A policy is a bunch of documents that represent the agreement that you have with your insurance provider. It will contain several forms, endorsements, provisions, and attachments.
This is the amount that you pay for the policy.
A common term used in writing off a vehicle. Typically, you will find this word paired with “vehicle.” A totalled vehicle is one that has been written off by the insurance company, which means that the repair cost of the vehicle exceeds its market value.