A
Accident forgiveness
A type of auto-insurance policy that protects your insurance premium rates even after your first at-fault car accident. This is something that some insurance companies offer but is not common practice.
Actuary
A statistician who calculates insurance risks and their respective premiums. This is to ensure that an insurance company remains financially stable and profitable so that they will always be in the position to be able to cover insurance pay-outs for customer claims where necessary. They do this by setting prices, monitoring driving trends, and determining how much should be held in reserve to ensure they will pay out insurance claims.
Actual value
Also known as Actual Cash Value (ACV), this is the amount equal to the replacement cost of an item minus depreciation. It represents the value of the item at the time of loss or damage.
Adjuster
A professional who investigates and settles insurance claims on behalf of the insurer.
Adverse carrier
This term refers to the insurance company of the other party involved in a claim. For example, if you are in a car accident and the other driver is at fault, their insurance company is the adverse carrier.
After-market parts
These are replacement parts for vehicles that are not made by the original equipment manufacturer (OEM). They are often used in repairs and can be less expensive than OEM parts. After-market parts are added to the vehicle after purchase, meaning they are not factory-standard or dealer-supplied. Typically, these parts enhance the vehicle's look or performance and may impact your insurance premiums or coverage options.
Agent
An insurance agent is a representative of an insurance company or insurance provider who is responsible for advising, soliciting, and assisting consumers in selecting and purchasing insurance policies that suit their needs.
Amendment
In insurance, an amendment is a change or addition to an existing insurance policy that alters the terms, coverage, or benefits of the original contract.
Anti-theft device
An anti-theft device is any device used to prevent or deter the unauthorised appropriation of valuable items, such as a vehicle. Examples include steering wheel locks, car alarms, and vehicle tracking systems. These devices can reduce the likelihood of your car being stolen or broken into and may also qualify you for discounts on your insurance premiums.
Anti-lock braking system (ABS)
ABS is a computer-controlled high-pressure safety system installed in vehicles to assist with braking. It ensures that all wheels slow at the same rate, preventing the driver from losing control and reducing the risk of skidding, especially on slippery surfaces.
In the context of insurance, being "at-fault" means being responsible for causing an accident. If a driver is determined to be at-fault, their insurance typically covers the damages and injuries resulting from the accident. This determination can affect the driver's insurance rates and coverage conditions in the following policy period.
Auto damage
Auto damage refers to any physical harm caused to a vehicle. This can include damage from accidents, vandalism, weather events, or other incidents.
B
Bail bond coverage
Monetary protection to cover the expense of a bail bond as specified in the insurance policy if the insured is arrested and jailed.
Beneficiary
For car insurance policies, beneficiary refers to an individual designated in the insurance policy to receive compensation in the event of a loss or total damage to the insured vehicle. If no beneficiary is explicitly named, the insured person is considered the default beneficiary.
In health insurance, beneficiary is an individual or legal entity named in the insurance policy to receive the insurance benefits. Multiple beneficiaries can be designated, with specific proportions assigned to each. If no beneficiary is specified, the benefits will be distributed to the legal heirs according to the order established by law.
Benefit
The services, procedures, or items covered by your insurance plan.
Bodily injury coverage
This car insurance coverage provides for physical injuries to others caused by the policyholder in an accident but does not cover the policyholder's own injuries.
Broker (corporate)
An insurance broker acts as an intermediary between clients and insurance companies. Unlike agents who represent insurers, brokers work on behalf of clients to find the best insurance policies from multiple providers.
Burglary or theft
Loss or damage to property due to forced entry by unauthorised persons with the intent to break into a vehicle, take, use, or keep possession of the insured vehicle without the insured party's consent.
C
Cancellation
In insurance, cancellation refers to the ending of an insurance policy before its expiration date by either the insurer or the insured. When a policy is cancelled, the policyholder may receive a partial refund of the unearned premium, depending on the terms and conditions. Each insurance policy has its own specific rules and surrender conditions.
This is a type of supplemental health insurance designed to provide financial support if the policyholder is diagnosed with cancer. It helps cover expenses that regular health insurance might not fully cover, such as co-pays, deductibles, lost wages, and experimental treatments. Coverage details may vary by insurer.
Car insurance is a contract between the policyholder and the insurance company that provides financial protection against losses resulting from accidents, theft, or other damage to the vehicle. It typically includes coverage for property damage, liability, and medical expenses.
A form of categorisation of vehicle models, brands and drivers by insurers in order to calculate and determine appropriate insurance premiums. This is usually done by an underwriter to be sure that every driver pays a fair price based on their risk level.
Catastrophe
A catastrophe refers to a natural disaster that affects a specific geographic area. Catastrophes are devastating events that often result in injury and loss of life, including extensive property damage. Tsunamis, hurricanes, and mass flooding are typical examples of catastrophic events.
Claimant
A claimant is a person or entity making a claim under an insurance policy. This can be the insured party or a third-party seeking compensation for damages or losses covered by the policy.
Claim examiner or assessor
A claim examiner is the agent responsible for investigating and settling a claim, representing the insurance company or insurance provider. They review the details of the claim, inspect damages, and ensure that the claim complies with policy terms.
Collision
Damage to your vehicle due to a collision with another object or vehicle (Example; your vehicle backed up into another object accidentally while exiting a parking space which caused damage to the bumper of your insured vehicle).
Collision coverage
Collision coverage pays for any damage to an insured vehicle, whether it hits or is hit by an oncoming vehicle or object or is overturned. The amount of coverage is subject to the terms, limits, and conditions laid out in the initial insurance agreement.
Competitive estimates
Competitive estimate refers to the term used by insurance companies when requesting that you (the policy holder) submit multiple repair estimates and quotations for their consideration when making a claim. This can refer to auto-repairs or repairs to structural property such as your home.
Insurance coverage for the loss, damage, or destruction of any part of your vehicle under the insurance policy, which may include flood, fire, and/or theft.
Insurance that is required by local law for all vehicles. This insurance type usually provides coverage for basic elements such as bodily injuries to vehicle occupants and any third-party injuries caused by the usage of the vehicle.
Condition
A condition is a part of the insurance contract that details all the duties and responsibilities of both parties (the insured and the insurance provider).
Contributory negligence occurs when both parties in a car accident are at fault, sharing responsibility for the incident. This means both parties' actions contributed to the accident, making them accountable.
This type of insurance provides coverage if the policyholder is diagnosed with a specified critical illness, such as cancer, major stroke, or other serious diseases. Typically, the insurance company pays out a lump sum benefit, which can be used to cover medical expenses, replace lost income, or other financial needs not fully covered by regular health insurance.
A customised vehicle has been modified from its original factory specifications. These modifications can affect the vehicle's value and performance and may require additional insurance coverage to ensure adequate protection.
D
Damages
The total sum of money that a person or entity is legally obligated to pay to another party, such as in the case of a car collision where you are at fault.
Declarations
The section of your insurance policy that includes your full name, address, the insured property or person, the location and description, the policy period, the amount of coverage provided, and the premium based on these factors.
Decline
When the insurer does not accept the responsibility to cover the vehicle or individual under the insurance policy.
Dependent
An individual, such as a spouse or child, who receives financial assistance throughout their lives for daily living, education, or healthcare from a policyholder. If the policyholder passes away, it causes dependents to face financial hardship. In some insurance plans, dependents may be listed in insurance policies to determine eligibility for coverages or deductions.
Depreciation
The reduction in the value of a vehicle due to age and wear.
Diagnosis / medical diagnosis
The identification of a medical condition confirmed by a healthcare professional through physical examination and appropriate tests, following established diagnostic standards.
Driver / rider
The operator of a car or motorcycle, whether insured or uninsured, who may also be the named driver/rider in the insurance policy.
E
Coverage for services not typically included by vehicle insurance, such as:
- Being locked out of your car.
- Car towing unrelated to an accident.
- Recharging a dead car battery.
- Inflating or replacing car tires.
Endorsement
The process of adding new parts or provisions to a basic insurance policy contract. An endorsement is the act of adding to a contract, whereas an amendment refers to any and all alterations made to a contract.
There are two types of excess:
- Policy excess: The amount the insured person must pay for damages before the insurance coverage applies per incident, as specified in the policy schedule. A higher deductible/excess can lower the insurance premium.
- Regulatory / OIC excess: The amount the insured person must pay per incident, based on the conditions of the insurance coverage.
Specific conditions or treatments that are not covered by an insurance policy.
Extended warranty insurance
A maintenance agreement providing financial protection or warranty for the sudden breakdown of manufacturer parts no longer covered by the manufacturer.
Expiration date
The date on which the insurance policy will cease to be valid.
F
Fire insurance coverage
Insurance coverage for any damage or loss to a vehicle because of a fire.
First notice of loss (FNOL)
It is the initial report made to an insurance provider following the loss, theft, or damage of an insured asset. This crucial step kicks off the formal claims process, allowing policyholders to seek compensation for their losses.
Free look period
A specified period after purchasing a new insurance policy during which the policyholder can review the coverage and choose to terminate the policy within a specified time without incurring full costs or penalties.
G
Grace period
A period after the premium payment due date during which a payment can still be made to keep the insurance policy active without interruption.
H
Health insurance / medical insurance
Financial protection that covers various medical expenses resulting from injury, illness, or disease affecting the entire body or specific parts.
Homeowner's insurance coverage
Protection that covers financial losses related to incidents involving your home and property, including fire, natural disaster, theft, and vandalism.
I
Indemnity
Compensation for damage or loss, restoring the insured to their financial position before the loss.
Insurance
Financial protection against damages, loss, or death, where one party promises to compensate another in exchange for a premium based on the level of risk.
A request from the claimant to the insurer for financial coverage or compensation, such as repairs, for any loss or damage covered by the insurance policy.
The amount of risk or liability covered by an insurance provider for an individual, company, or entity. This includes third-party liability, auto insurance, or life insurance coverage for unforeseen events like car accidents or premature death.
Insurance policy / policy wording
The contract between the insurer and the insured, outlining the coverage details, general terms and conditions, exclusions, and any endorsements that apply. The policy includes key supporting documents such as the policy schedule, application form, endorsements, and any attached materials. Together, these documents form the complete the insurance agreement.
The price charged by an insurer for providing insurance coverage, based on the vehicle and customer profile.
Insured
The person or entity covered by an insurance policy. This means they are protected against specific risks or losses outlined in the policy.
Insurer
The insurance company that underwrites and distributes the insurance policy to the insured. In many cases, the policyholder and the insured are the same, but they can be different individuals. For example, if you buy health insurance for your spouse, you are the policyholder, and your spouse is the insured.
L
Lapse
The termination of an insurance policy due to non-payment of premiums.
Liability
A liability is a financial obligation or debt that one party owes to another. In insurance, it refers to the legal responsibility for damages or injuries caused to another person or their property. For example, if you are at fault in a car accident, your liability insurance covers the costs of the other party's injuries and property damage.
Life insurance coverage
Life insurance coverage provides financial security for your loved ones and dependents in the event of your premature death. With this policy, you designate a beneficiary (or multiple beneficiaries) to receive a death benefit, ensuring your assets and estate are managed according to your wishes.
Loss
A loss refers to the damage or injury suffered by the policyholder due to a covered event, such as an accident, theft, or natural disaster. This can include physical damage to property, bodily injury, or financial loss. When a loss occurs, the policyholder may file a claim with their insurance company to receive compensation for the damages.
M
Marine insurance
Insurance primarily concerned with transportation and communication means, and goods in transit.
Market value
The estimated price at which a vehicle would sell in the current market. This value is determined by factors such as the vehicle's make, model, age, condition, mileage, and current demand. Insurance companies use market value to determine the payout for claims, ensuring that policyholders receive a fair amount to replace their vehicle with a similar one.
An amount specified in a car insurance policy that can be used to pay for medical expenses if you are injured in an accident.
Moral hazard
Moral hazard occurs when the presence of insurance leads individuals or organisations to take on more risk than they otherwise would, knowing that the insurer will bear the financial consequences. This can result in higher costs for insurers and policyholders alike.
Motorcycle insurance offers protection against risks associated with owning or riding a motorcycle. It may include coverage for collision, third-party liability, flood, and other types of damage, depending on the policy.
N
Named driver / rider
A named driver / rider is a person listed in the insurance policy as either the main or an additional driver of the vehicle. Most insurers allow up to three named drivers. If someone not listed in the policy drives the vehicle, penalties may apply, affecting the use of insurance benefits. Claims made by additional drivers can impact the No Claims Bonus of the main driver.
Negligence
The failure to exercise the care that a reasonable person would exercise in similar circumstances, leading to unintended harm or damage.
A vehicle repair shop that has a tie-up with an insurance company, allowing policyholders to get their vehicles repaired without paying upfront, as the insurer settles the bill directly with the garage.
A hospital in contract with insurance companies to provide streamlined treatment and direct billing services for insured patients.
A financial discount applied by the insurer if the insured party has a good driving history with no at-fault claims. This bonus rewards safe driving and can reduce insurance premiums.
Notice of loss
A written notice provided by the insured to the insurer informing them of a loss that may be covered under the policy.
P
Personal accident insurance provides protection for health risks resulting from bodily injury, disability, or death due to accidents. It excludes coverage for pre-existing conditions, chronic diseases, or illnesses.
Pet insurance
A type of insurance that helps cover veterinary expenses for your pets, including treatments for illnesses, injuries, and routine care.
Policyholder
The person or entity that owns an insurance policy. They are responsible for paying the premiums and have the authority to make decisions about the policy, such as changing coverage limits. The policyholder is often, but not always, the same person as the insured.
Policy schedule / schedule
A policy schedule is a summary document that outlines the coverage provided by an insurance policy. Typically found at the beginning of the policy document, it identifies the policyholder and details the property and individuals covered, the coverage limits, exclusions, deductibles, and payment terms. It may also include additional clauses, warranties, and specific conditions related to the policy.
Pre-existing conditions
Pre-existing conditions are illnesses, injuries, or comorbidities that exist before the first effective date of a health insurance plan. These may include chronic illnesses, cancer, diabetes, lupus, depression, or other medical conditions that could lead to more significant health issues. These are typically not covered by the insurance policy unless the insured has disclosed to the insurance company and the company explicitly accepted to cover without any exclusions.
Premium instalment allows the insured to pay the total insurance premium in several instalments over a period of months, as agreed upon in the contract with the insurer.
Property damage
Damage to property that belongs to the insured or a third-party through an act of negligence or with purposeful intent.
Q
Quote / quotation
An estimate of the cost for a specific policy. It includes the premium, coverage limits, deductibles, and terms based on the applicant's information. Quotes help compare different insurance options.
R
A notification sent to the policyholder informing them that their policy is about to expire and offering the option to renew.
Repair cost
The amount it costs an insurer to repair or replace damaged property based on the insurance policy issued to the insured.
Risk
The potential for a loss or adverse event that an insurance policy is designed to cover. This can include events like accidents, natural disasters, theft, or illness, which may result in financial loss or damage.
Risk assessment
The systematic process of identifying, evaluating, and analysing the potential risks associated with insuring a person or property. This involves assessing factors such as the likelihood of an event occurring and the potential severity of its impact, to determine appropriate coverage and premiums.
An annual tax payable to the local Department of Land Transport based on the vehicle's engine size. Vehicles must display proof of payment, typically in the form of a window sticker provided by the Department of Land Transport.
S
Senior health insurance
Health insurance plans specifically designed for elderly individuals, addressing their unique healthcare needs.
Service area
The geographic area where an insurance plan's network providers offer services to policyholders.
Settlement
The payment made by an insurer to a policyholder or third-party to resolve a claim. It compensates for losses or damages covered under the policy terms.
The maximum amount of insurance coverage under the insurance policy. This is the maximum amount a policy will pay.
Surcharge
An additional cost applied by the insurer, usually as an increase in premium due to the driver's actions, such as at-fault accidents. Surcharges typically apply for a year or longer until the driver demonstrates improved driving behaviour.
Surety insurance
A type of financial guarantee where the insurer (surety) promises to compensate a party (oblige) if another party (principal) fails to fulfil a contract or obligation. It is commonly used in business contracts to ensure commitments are met.
T
Telematics
A technology that uses GPS and other sensors in vehicles to collect data on location, driving behaviour, and vehicle health. Insurers use this data to offer personalised premiums, reward safe driving, and manage claims more efficiently.
Temporary disability
A disability that temporarily prevents an individual from performing their occupational duties for a period of time.
Term
The duration or period during which an insurance policy is in effect. It can refer to the length of time coverage is provided, such as a one-year term for a motor insurance policy or a specific number of years for a health insurance policy.
Theft (vehicle theft)
The loss of a car, motorcycle, or other motor vehicle, typically covered under comprehensive car insurance.
Third-party
Any person or entity other than the insured or the insurer.
Third-party liability coverage
Insurance coverage that provides financial support if the driver or owner is found responsible for causing damage or injury to other drivers, pedestrians, residents, or their property.
Total permanent disability
A disability that completely or permanently prevents an individual from engaging in any occupation or work for remuneration or is incapable of performing 3 or more basic daily activities independently.
A type of insurance that covers financial losses and medical expenses incurred while traveling, such as trip cancellations, lost luggage, and emergency medical treatment.
U
Underwriter
A person or organisation that assesses and takes on financial risk in exchange for a fee - commonly in insurance, loans, or investments. In insurance, the underwriter is a party to the contract who evaluates risk, determines pricing and terms, and agrees to pay compensation or a sum of money as outlined in the policy.
Underwriting
The process of analysing, classifying, and calculating the risk of insuring applicants based on their profile, history, and vehicle to determine the appropriate insurance premium or to reject the application.
Uninsurable risk
A risk that is deemed too high for an insurance company to cover, often due to the likelihood or magnitude of potential losses.
Usage-based insurance
A type of auto insurance where the premium is based on the policyholder's driving behaviour, often monitored through telematics devices.
V
Valuation
The process of determining the value of an asset or property for insurance purposes.
An assessment conducted by an insurance company to evaluate the condition of a vehicle before issuing a policy. This inspection helps the insurer determine the vehicle's current state, identify any pre-existing damage, and set an appropriate insurance premium.
Void
A term used to describe an insurance policy that is considered invalid or unenforceable.
Insurance coverage that is not required by law but typically offers significantly more protection to the insured party and their vehicle compared to compulsory insurance.
W
Waiting period
A period of time after a health insurance policy becomes effective during which claims cannot be made. The insurance company sets different waiting periods for each illness. For example, 30 days for common illnesses or 90–180 days for serious diseases, depending on the policy’s terms and conditions.
Whole life insurance
A type of permanent life insurance that provides coverage for the insured's entire life, without an expiration date like term life insurance.
Last Updated: 1st July 2026