Jargon Explained

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    2. B
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    8. H
    9. I
    10. J
    11. K
    12. L
    13. M
    14. N
    15. O
    16. P
    17. Q
    18. R
    19. S
    20. T
    21. U
    22. V
    23. W
    24. X
    25. Y
    26. Z

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    Chartered Insurer

    Definition

    A Chartered Insurer is a Fellow of the Chartered Insurance Institute or an Associate with at least three years relevant experience in the insurance industry.

    Explanation

    Used when talking about professional qualifications in the insurance industry.

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    Accidental Damage cover (AD)

    Definition

    Damage caused to the policyholder's property.

    Explanation

    Used when talking about types of insurance cover.

    Typical examples of accidental damage include things like spilling paint on a carpet, or damage to a car following an accidental collision.

    This term is most commonly used in household or motor policies. 

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    Acute condition

    Definition

    A disease, illness or injury that is likely to respond quickly to treatment which aims to return you to the state of health you were in immediately before suffering the disease, illness or injury or which leads to your full recovery.

    This is a defined term that's agreed by the Association of British Insurers, and commonly used by insurers that provide private medical insurance. 

    Explanation

    Used when talking about types of medical condition.

    Acute has a specific meaning in medical insurance. This reflects the way the term is used in medicine rather than the way it's used in general use where acute tends simply to mean an illness that's 'currently very bad'.

    A medical condition that's acute can become chronic. 

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    Associate of the Chartered Insurance Institute (ACII)

    Definition

    A professional insurance qualification awarded by the Chartered Insurance Institute.

    An Associate of the Chartered Insurance Institute has successfully completed the Advanced Diploma in Insurance, previously known as the Associateship. 

    Explanation

    Used when talking about professional qualifications in the insurance industry.

    Associate of the Chartered Insurance Institute is a widely recognised qualification in the UK insurance industry.

    The Advanced Diploma in Insurance is the second highest of four available levels of qualifications offered by the Institute. It was previously called the Associateship. 

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    Average condition

    Definition

    A policy condition that requires the amount of a claim payment to be reduced proportionately if the policyholder has not insured his property for the full value or replacement cost.

    Explanation

    Used when talking about claims and under-insurance.

    It has the effect of making the policyholder responsible for an amount of their claim that's proportionate to the amount of under-insurance.

    For example, if Paul and Tracy insure their cottage for £100,000 and the real value is £200,000, they have only insured for 50% of the real value. If they later need to claim for damage worth £10,000, their insurer will only pay them for the proportion of the loss that the insurer has insured – which is 50% or £5,000. 

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    Carrier

    Definition

    A business or person who is paid to transport goods or people by land, sea or air.

    Explanation

    Used when talking about Transit or Travel Insurance.

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    Certificate

    Definition

    A document issued by insurers as evidence that insurance is in force.

    Explanation

    Used when talking about insurance.

    There are legal regulations about what an insurance certificate must show.

    Insurance certificates are issued for all types of insurance, but are very often mentioned in connection with motor insurance and employers' liability insurance.

    Often also known as either a certificate of insurance or insurance certificate.

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    Certificate of Insurance Practice

    Definition

    A professional insurance qualification awarded by the Chartered Insurance Institute.

    A Certificate of Insurance Practice shows that the holder has passed examinations showing a high standard of technical knowledge in a specialist area.

    Explanation

    Used when talking about professional qualifications in the insurance industry.

    A Certificate of Insurance Practice is a widely recognised qualification in the UK insurance industry.

    It is the first of four available levels of qualifications offered by the Institute, and is a stepping stone to a Diploma and then Associateship.

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    Chartered Insurer

    Definition

    A Chartered Insurer is a Fellow of the Chartered Insurance Institute or an Associate with at least three years relevant experience in the insurance industry.

    Explanation

    Used when talking about professional qualifications in the insurance industry.

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    Chemotherapy (Chemo)

    Definition

    The treatment of medical conditions with drugs.

    Explanation

    Used when talking about types of medical treatment.

    Chemotherapy is often used in relation to cancer. The drugs treat the cancerous cells by preventing the cells from dividing and reproducing themselves.

    Healthy cells and tissue are also affected by chemotherapy, and this can lead to a variety of side effects, such as hair loss or a weakened immunity system. However, healthy cells and tissues are able to recover after chemotherapy, while the aim is that the cancer cells eventually die.

    The drugs may be given by an intravenous drip or by tablets.

    A related term is radiotherapy.

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    Chronic condition

    Definition

    A disease, illness, or injury that has one or more of the following characteristics:

    This is a defined term that's agreed by the Association of British Insurers, and is commonly used by insurers that provide medical insurance.

    Explanation

    Used when talking about types of medical condition.

    Chronic has a specific meaning in medical insurance which is different to the way it can sometimes be used where chronic can mean an illness that's 'very bad'.

    It's very important that anyone who is thinking about taking out medical insurance, or who already has some, understands the meaning of chronic in their policy because it may affect cover.

    A medical condition that was acute may become chronic.

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    Claimant

    Definition

    A person or organisation that is making a claim.

    Explanation

    Used when talking about insurance claims.

    A claimant could be either:
    • the insured
    • a third party who is claiming for some kind of damages against the insured.

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    Claims and Underwriting Exchange (CUE)

    Definition

    A database of household and motor insurance claims that's shared by UK insurers to help them detect and prevent insurance fraud.

    Explanation

    Used when talking about preventing insurance fraud.

    The Claims and Underwriting Exchange (CUE) is used by insurers to check that the same claim has not been sent to other insurers plus a check on claims history when a customer applies for insurance.

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    Claims benefit statement (CBS)

    Definition

    A document that tells a policyholder what treatment has and has not been paid for on a claim and how much. It also lets the customer know if they need to pay for some of their treatment directly and, if so, how much they need to pay and to whom.

    Explanation

    Used when talking about medical insurance claims documentation.

    For every claim sent by the customer a statement is issued showing what has been paid for. There may be occasions when the customer needs to pay for some of their treatment direct to the provider. This may be because an excess is due or current policy limits have been reached. A payment slip is provided for the customer to send with their payment.

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    Claims made basis

    Definition

    An insurance policy which covers for claims notified to the insurer during the policy period, irrespective of the date of loss.

    Explanation

    Used when talking about the basis of cover for insurance policies.

    For example, if a policy has a period of cover from 1 January 2009 to 31 December 2009 on a claims made basis, it would cover a claim made at any point during this period, such as 1 April 2009, for a loss that occurred before this period, such as on 1 April 2004.

    The opposite to claims made basis is claims occurring basis. If a policy insures on a claims occurring basis, it covers the policyholder for losses that actually occur during the period of cover.

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    Clauses

    Definition

    A section of an insurance policy or other legal document.

    Explanation

    Used when talking about insurance policy wordings.

    A clause will usually be about one subject and will detail the terms of a specific part of the contract.

    Here's an example clause from AXA's Travel Insurance 2009:

    Payment for medical treatment abroad

    If you are admitted to a hospital or clinic while abroad, AXA Assistance will arrange for medical expenses covered by the policy to be paid direct to the hospital or clinic. To take advantage of this benefit someone must contact AXA Assistance for you as soon as possible.

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    Co-insurance

    Definition

    Where two or more parties share an insurance risk between them.

    Explanation

    Used when talking about who is insuring a risk.

    There are two main types of co-insurance:

    Sharing an insurance risk means that the parties sharing the risk also share a relative proportion of any insured loss. For example, if two insurers insure 50% of a risk, they would each have to pay 50% of any claim for an insured loss. And if a policyholder is responsible for 20% of a risk, they would have to pay 20% of any claim for an insured loss.

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    Collection week

    Definition

    The period of time, around one week, before AXA collects the Direct Debit for a policy premium.

    Explanation

    Used when talking about medical insurance premiums.

    AXA collects many premiums using Direct Debit. Collection week refers to the week before the date a Direct Debit is due. During this week, it's not possible to cancel the Direct Debit or make amendments to the policy or premium because it's too close to the date the Direct Debit payment is due. AXA has to collect the Direct Debit as usual and then refund the payment to the customer.

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    Combined policy

    Definition

    An insurance policy that groups several types of cover together in a single policy although each cover is separately underwritten and assessed for risk.

    Explanation

    Used when talking about types of insurance policy.

    A combined policy brings together different types of covers to provide a policy that provides comprehensive cover that's suitable for a policyholder's specific needs.

    For example, AXA's Commercial Combined policy gives businesses the opportunity to choose from a set of covers to create a policy that's suitable to their specific needs. Each of the covers is underwritten separately so that the appropriate premium can be worked out. The total premium for the policy is effectively a sum of the premiums for each separate cover.

    Many combined policies, such as AXA's Motor Trade Combined insurance specify that a certain set of covers must be included.

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    Commission

    Definition

    Money paid by an insurance company to a broker, intermediary or agent for selling the insurer's insurance policies.

    Explanation

    Used when talking about how insurance companies pay brokers.

    Commission is sometimes also referred to as brokerage.

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    Compensation

    Definition

    Either:

    a payment made to the insured for a loss; or

    a payment for damages awarded by a court or agreed between parties.

    Explanation

    Used when talking about insurance claims settlements.

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    Compensatory Award

    Definition

    An award that an employer may be required to pay an employee.

    Explanation

    Used when talking about Legal Expenses cover and particularly cases of unfair dismissal of employees.

    Where an employment tribunal finds an employee has been unfairly dismissed they may make an award of compensation. This will consist of two elements, Basic Award and Compensation Award. The Compensation Award is designed to put the employee in the same position as if they had not been dismissed. This includes salary and benefits the employee was entitled to.

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    Complementary practitioner

    Definition

    Someone who practises complementary medicine.

    Explanation

    Used when talking about types of providers of medical treatment.

    Complementary medicine is the term used to describe any kind of medical treatment that's not considered to be conventional. Private medical insurance may cover treatment from some types of complementary practitioner – commonly homeopathy, acupuncture, osteopathy and chiropractic treatment. If you have this cover, this will be confirmed in your policy documents.

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    Comprehensive cover

    Definition

    A policy covering a wider range of loss or damage.

    Explanation

    Used when talking about types of insurance cover.

    Comprehensive cover is very commonly used in motor insurance to describe a policy that includes more covers than either third party insurance, or third party, fire and theft.

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    Compulsory excess

    Definition

    An excess i.e. the total amount of money the policyholder must pay towards a claim. This includes any standard excesses and any imposed excess.

    Explanation

    Used when talking about policy excesses.

    An example of an imposed excess would be for poor claims history. So if a policyholder had made a number of glass claims an insurer may impose an excess where the customer has to pay the first amount of any future glass claims.

    A standard excess applying to the policy could be paying the first amount of a buildings claim as shown on the schedule.

    So these compulsory excesses are in addition to any voluntary excess the customer may have chosen to have.

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    Computerised Tomography scan (CT scan)

    Definition

    A way of creating a 3D image of the inside of a patient.

    Explanation

    Used when talking about types of medical treatment.

    CT scans are used by doctors to help them identify medical conditions and advise on appropriate treatment.

    CT scanners beam x-rays through the body at different angles to create many electronic images. The scanner then builds-up the images to create a 3D image, which can be viewed at different angles, or as 'slices' through the body.

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    Condition

    Definition

     A condition is part of a contract that specifies that something must be done – and often when, where or how it must be done too.

    Explanation

    Used when talking about contracts and agreements.

    In an insurance policy, a condition usually refers to something that must be done or complied with. For example, the duty to take reasonable care to protect property, or the duty to report claims to the insurance company promptly are both common conditions in insurance policies.

    Agreements or contracts may be deemed to be broken if any of the conditions they contain are broken.  

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    Condition precedent

    Definition

    A condition precedent to contract – something which must be done by the insured before the policy can begin to apply e.g. produce a valuation for jewellery.

    A condition precedent to liability – something which must be done by the insured before a claim can be accepted e.g. maintaining a contract on an alarm or having adequate security.

    Explanation

    Used when talking about contracts and agreements.

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    Consequential Loss

    Definition

    Insurance covering the loss of net profits and related costs arising from an insured event.

    Explanation

    Used when talking about types of insurance cover.

    The main benefit of Consequential Loss is that it helps to limit the damage that reduced profits can have on a business. This cover will pay for the loss of net profit and continuing costs at a time when turnover may be reduced.

    Consequential Loss is sometimes also known as Business Interruption, loss of profits or loss of income.

    Consequential Loss is sometimes shortened to Con Loss.

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    Contractors All Risks Insurance (CAR)

    Definition

    Insurance that provides all risks cover (subject to certain exclusions) for building works, building materials, building equipment, building plant and temporary buildings during construction.

    Explanation

    Used when talking about Construction insurance.

    Contractors All Risk insurance is sometimes also known as Construction Insurance or Contract Works Insurance.

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    Contractual Liability

    Definition

    A liability that a person or organisation accepts as part of a contract they sign.

    Explanation

    Used when talking about contracts – especially insurance contracts.

    Contractual liabilities are agreed by signing a contract, which is different to liabilities established by common law or statute law.

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    Contribution

    Definition

    The principle of contribution applies where a risk is insured on more than one insurance policy, and the two insurers concerned share the cost of a claim.

    Explanation

    Used when talking about who has insured a risk.

    Here's an example of how contribution works:

    Corinne's hairdryer is damaged while she is away for the weekend. Corinne finds that her hairdryer is covered by both her household insurance policy and her travel insurance policy, so she contacts both insurers. The two insurers agree to share the cost of the claim – they both make a contribution to paying the claim that's proportionate to the insurance they've provided to Corinne.

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    Contributory negligence

    Definition

    Action or inaction that contributes to the negligence that has caused a loss.

    Explanation

    Used when talking about insurance claims for negligence.

    The more contributory negligence that a claimant has contributed to a loss, the more their claim for compensation will be reduced.

    For example, if an employee slips on a water spillage while running in a corridor at work, the employer may be negligent, but the employee may have contributed to the overall negligence by not taking notice of the 'no running' signs. If this is the case, the employee's claim for compensation for any injuries they suffer from may be reduced by their own contributory negligence.

    The amount of contributory negligence might be agreed between an insurer and the insured, or it might be decided in court.

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    Convention Merchandises Routes (CMR)

    Definition

    A convention that sets out to establish conformity on liabilities for the carriage of goods by road between European Union countries.

    Explanation

    Used when talking about Transit insurance.

    Where goods are transported between countries, the laws relevant to each countries may apply. The aim of the convention is to establish conformity on liabilities from country to country.

    Convention Merchandises Routes is a French expression.

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    Cooling off period

    Definition

    Another term for statutory cancellation rights.

    Explanation

    Used when talking about personal or consumer contracts.

    A customer has a right to cancel their insurance policy up to 14 days after the contract completion, or the date that the customer received their documentation. This applies at the start of a policy or at renewal.

    For payment protection insurance this period of time is 30 days.

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    Cost share option

    Definition

    An arrangement where the insured shares the cost of the medical treatment they claim for with their insurer.

    Explanation

    Used when talking about medical insurance.

    In simple terms, cost share means that part of the cost of a claim would be paid for by the insurer, and part would be paid for by the insured. This is an alternative to an 'excess'.

    The ratio paid by the policyholder and the insurer is worked out as a percentage of the value of each claim.

    There is usually a maximum limit to the cost share that the insured would have to pay for in a policy year.

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    Cover note

    Definition

    A temporary insurance document provided by the insurer to the insured confirming details of the cover that is in place before the actual policy documents are provided.

    Explanation

    Used when talking about insurance documents.

    Cover notes provide details of insurance cover before the actual policy documents are available. Cover notes may be required to prove the existence of compulsory insurance (e.g. motor) while the full documents are being prepared.

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