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Agreed Value OR Guaranteed Value It is the amount your insurance company will reimburse you when the insured item is damaged or lost. Agreed value differs from other policies in that you are guaranteed to get the full amount agreed upon in your policy in the event of a loss. An agreed value is set at the beginning of each period of cover. Value doesn’t change during the period of cover. The agreed value is calculated based on the saleable value of the insured property. Note that the saleable value and replacement cost are not the same. Saleable value at a given point is calculated by deducting depreciation from replacement cost. Most at times we prefer the market value to the agreed Value. Generally speaking, marker value has the advantage of offering lower premiums for policy holders. For example the market value of your vehicle is likely to be less than any valuation of your vehicle you would agree with your insurance provider. The difference between agreed value and sum insured

Premium The word "premium" is derived from the Latin praemium, where it meant "reward" or "prize." An amount to be paid for a contract of insurance for protection from a loss, hazard, or harm. The amount is either monthly, quarterly or annual that you must pay in order to have the exchange for insurance coverage. Premiums is the compensation insurer receives for bearing the risk of a payout should an event occur that triggers coverage. Failure to pay the premium on the part of the individual or the business may result in the cancellation of the policy and a loss of coverage. The premium may also contain intermediaries (sales agent's or broker's) commissions. These amounts are fixed by the regulator. The intermediaries commission may go higher depending on an agreement between the parties. An insured pays a fixed premium amount in exchange for the insurance company's guarantee to cover any economic losses incurred under the scope of the a

Tort A tort is an act or omission that gives rise to injury or harm to another and amounts to a civil wrong for which courts impose liability. As a result of committing a tort, the guilty person (the defendant or tortfeasor) bears legal liability. Torts fall into three general categories: intentional torts (e.g., intentionally hitting a person); negligent torts (e.g., causing an accident by failing to obey traffic rules); and strict liability torts (e.g., liability for making and selling defective products - see Products Liability). In the context of torts, "injury" describes the invasion of any legal right, whereas "harm" describes a loss or detriment in fact that an individual suffers. The primary aims of tort law are to provide relief to injured parties for harms caused by others, to impose liability on parties responsible for the harm, and to deter others from committing harmful acts. Torts can shift the burden of loss from the injured party to the party w

Insurance Fraud Insurance fraud occurs when an insurance company, agent, adjuster or consumer commits a deliberate deception in order to obtain an illegitimate gain. It can occur during the process of buying, using, selling, or underwriting insurance. An act is completed by Simply making a misrepresentation (written or oral) to an insurer with knowledge that is untrue is sufficient. The majority of insurance fraud cases involve exaggerated or false claims and money laundering. Example fraudster file insurance claims for accidents that never actually occurred. Or owners of life insurance policies have feigned their own deaths in order for their families to collect on the policy. Then, the fraudster receives money from the family while secluded in a remote or foreign location. Remember as a customer you can not exploit financial gain from an insurance policy due to the principle of indemnity. Indemnity simply means putting you or your property back in the position you/it use to be b

Total Loss or Write-off It is the complete destruction of the property insured under a particular policy, when the property is beyond economic repair that is exceeds its insured value, and simply replacing the old property with a new equivalent is more cost-effective. Such a loss may be an "actual total loss" or a "constructive total loss". Actual total loss, also known as "total loss," occurs when an insured property is totally destroyed, lost, or damaged to such an extent that it cannot be recovered. Constructive total loss is declares when an insured property estimated costs for its repair exceed the insured value of the property. In some some jurisdictions, a property may be a total loss if the repair costs would exceed a percentage (e.g., 80%) of the property's value. Payment is made equivalent to the property actual cash value which is the market value based upon several factors, such as its pre-loss condition, age, options, mileage for ca

Assessor An independent professional who advises policyholders on the settlement of their claims, negotiates for the policyholder. Insurance Claims Assessors inspect and evaluate property to decide if the person is owed a payment under an insurance policy. They may specialise in a particular area such as medical, automotive or property claims. The difference between Loss Assessors and Loss Adjusters is simple both are insurance claim professionals, however, there is one key difference in their roles during the insurance claim process: • Loss Adjusters are employed by the insurance company but they are supposed to remain independent. • Loss Assessors work for you, the policyholder. They are independent professionals who are employed by you to protect your interests. Some of the tasks and duties your assessor owes to you; -Managing the process of a claim’s assessment. -Liaising with people in person, by phone or in writing. -Determining the cause of the damage. -Providing empathetic

Acquisition Cost Customer acquisition costs are a familiar problem throughout the business world. On average, businesses spend five times more to acquire a new customer than to keep an existing customer, The insurance industry has the highest customer acquisition costs of any industry. Costs incurred by an insurer or their agent in attracting customers. These costs typically include: sales force salaries and overhead, marketing and advertising costs and other costs incurred prior to when a prospect agrees to purchase a policy. An example of how acquisition cost is calculated by an actuary; -Gross premium for a year 2.400000 sold. -Tax 19.25% on gross premium -Regulatory fee xxxxxx on gross premium -Administrative cost (software, staff, rent, bill...) 5% on gross premium -Acquisition cost (Marketing, Claims administration....) 5% on gross premium The average cost of insurance customer acquisition rose per customer in recent years, but it doesn’t need to be that way. Lower customer a

Contingent Beneficiary The person(s) designated to receive the proceeds of the life policy if the Primary Beneficiary is death. Simply stated, a primary beneficiary is the first person entitled to receive the benefits, and a contingent beneficiary is next in line. For instance, the owner of the policy chooses his/her spouse as the primary beneficiary.However, the spouse dies at the same time as that of the insured. Here the children of the insured will become the contingent beneficiary. Naming a contingent beneficiary may not be required when you purchase life insurance, but it can help make sure someone you care about receives your death benefit in case your primary beneficiaries no longer can. Without a contingent beneficiary, your insurance payout goes through probate and some jurisdictions it may be subject to estate taxes or debt collection. Most people name a family member, but you could also name a charity or trust. It is possible to name multiple contingent beneficiaries.

Pecuniary Insurance The word pecuniary comes from the Latin word "pecunia"' which means money. Hence, pecuniary insurance can be defined as any insurance policy that protects against financial losses. A broad definition, it provides a business with protection against financial losses stemming from a variety of causes, from crimes such as fraud or embezzlement to legal expenses, business interruptions, credit insurance and fidelity guarantee, bonds. Financial loss due to embezzlement or fraud. This is usually due to money lost from criminal activity within the company. An example would be a dishonest employee, perhaps a secretary or an accountant. Legal expenses insurance: This is an insurance policy purchased by organisations, professional bodies, trade unions and associations to cover unexpected large amounts of legal fees that might have to meet. Business interruption insurance: This is an insurance policy that provides coverage to policyholders for losses arising

Declaration Page An insurance declarations page tells you almost everything about your policy, from who and what is covered to which coverages you pay for. Your insurance company will send your declarations page to you via email, fax, or regular mail as soon as you buy your policy. The declaration page includes your name and address, descriptions of the insured property and your premium. It also outlines your policy's coverages, limits, deductibles, discounts and relevant insurance policy forms and endorsements. An insurance declaration page sums up what is in an insurance policy. It comes at the start of policy paperwork and contains information such as your deductible, coverage, discounts, and more. You should check your declaration page for errors as soon as you get it. Errors may make it hard to file a claim. You may need to show this page to your lender as proof of coverage. The declarations page is different from an insurance policy in that, the DEC page summarizes the

Commercial Combine Policy If you have a business or other organisation with complex insurance needs, then a commercial combined policy can save you time, money and making life just that little bit simpler. Packaging both your liability insurance and property insurance can save your business time and money. One insurer can potentially meet your needs with a commercial combined insurance policy that offers protection against a wide range of workplace risks. Commercial combined insurance is a policy which includes various types of key business cover in one. In most cases, this type of insurance will include property damage, business interruption, employer's liability, public liability, personal accident cover, money and goods in transit. Failing to have the right cover for your organisation can be very costly and could leave your business in a dangerous position. Not only is it important to have the right level of cover in place, but there are many other benefits to combined comme

InsurTech a Quagmire Looked Upon as The Magna Carta of Insurance Penetration! Unless we relook our perceptions and approaches to the term "InsurTech", we might not collectively achieve the desire insurance penetration victory we all are fighting for to happen in the shortest possible. The Problem Why because most of us the actors in the industry are "concentrating on the shadow not the object" -Shadow = Technology -Object = Insurance One thing is certain if we wish to change the dynamics of insurance in this era, the traditional insurance principles and theories can never be left out. Personally, I have noticed clients are more concerned about how tailored are products to their needs rather than how easy policies are delivered to them. I think this is one reasons why even with the birth of hundreds or thousands or InsurTech globally, insurance penetration is still very low. We shouldn't forget the name is #InsurTech that is Insurance and Technology combi

Co-payment A relatively small fixed fee that a health insurer (such as an HMO) requires the patient to pay upon incurring a medical expense (as for a routine office visit, surgical procedure, or prescription drug) covered by the health insurer. The reason insurance companies apply the copayments principle is to share health care costs to prevent moral hazard. It may be a small portion of the actual cost of the medical service but is meant to deter people from seeking medical care that may not be necessary, e.g., an infection by the common cold. For example, imagine you receive a filling from a dentist. Your insurer charges a 200 co-pay for every dental appointment, and it levies a 20% coinsurance fee for fillings. If the dentist costs 2000, you pay 200 copay and you may have a 400 coinsurance to sum up a total of 600 for the appointment. Many insurance companies choose their copays based on the estimated cost of a visit. When the visit is urgent care it will be treating you on an

Sum This two principles are based on the principle of indemnity, that provides a reimbursement/ compensation to damage/loss. It is that fixed amount that the insurer pays the policyholder in case of an eventuality. A sum insured is the amount that the insurance company pays to the policyholder in the case of an unpredictable event, such as an illness. Sum insured provides a cap on maximum damages that can be covered in a year in case of occurrence of any unforeseen event. The higher the sum insured is, the higher the amount that the insurance company has to be by the insurance company in event of a claim being made. Suppose Mr. Ben has a health insurance policy with a sum insured of 500. Now, he gets hospitalized and claims bills worth 380. The claim gets approved. Now again, due to some other reason, he gets hospitalized, and bills this time amounts to 200. Now the insurance company will pay only 1200, and the balance of 80 shall be borne by Mr. Ben himself. A sum assured is a c

Whole Life Coverage Also known as whole of life assurance, sometimes called "straight life" or "ordinary life", is a life insurance policy which is guaranteed to remain in force for the insured's entire lifetime, provided required premiums are paid, or to the maturity date. This is contrary to term life insurance that provides coverage for a set period of time, such as 20 years. Whole life insurance guarantees payment of a death benefit to beneficiaries in exchange for level, regularly-due premium payments. The policy includes a savings portion, called the “cash value,” alongside the death benefit. In the savings component, interest may accumulate on a tax-deferred basis. How whole life policy works is very simple; a permanent policy that builds cash value over time. As long as the premiums are current, the policy remains active for the entire life of the policyholder, and beneficiaries will receive a set death benefit upon the insured's death. For an i

Damages Financial/monetary compensation for loss suffered/incurred by the Insured. Many different insurance products provide financial protection for financial loss or injury. Generally there are three main types of damages: Firstly, compensatory damages, meant to restore to the injured party what they have lost due to the other party's wrongful act. This includes bodily injury, property damage, consequential damages, and general damages. Second, nominal damages refer to small amounts awarded as a symbolic gesture to indicate the wrongdoing of the defendant in cases in which the plaintiff cannot provide substantial proof of loss. Finally, punitive damages are in excess of compensatory damages and meant to punish the defendant for a particularly egregious nature of the misconduct. It is important to understand the coverage a liability insurance policy offers to minimize exposure. To warrant the award, the claimant must show that a breach of duty has caused foreseeable loss. T