Useful insurance terms which you must know – II

On the first article we have discussed about the various common terms of the insurance, however these terms are not enough to describe the whole insurance. Here we will discuss about the other common terminologies of the insurance.

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First party insurance: From the name the character of the insurance can be well judged. Under the first party insurance the insurance policy company will give complete protection to the property and asset of the insurance holder only.  The first party insurance is more appropriate in case of the non life insurance. Let’s have an example to have a clear view about it. A builder has insured its building area under insurance. In case of any untoward incident the builder will get the protection for the building are from the insurance company. However the other property which belongs to some third party got damaged within the builders building area will not get the protection under the insurance.

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Liability insurance: Once again a term which is plenty used for the non life insurance. There will be no use of this term under the life insurance. The liability insurance is something where the damaged property and asset will gets coverage. The damaged property may be of the first party or the third party. Irrespective of the party concerned, the damaged properties will get complete protection from the insurance company. Let’s have an example to clearly describe the liability insurance. A person has insured its car, if the car meets an accident the insurance company will pay towards the damage of the car under the insurance policy. However under the liability insurance, if there will be any damage to the third party properties due to the accident it will also get coverage.

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Negligence and gross negligence: It is legal term used in the world of insurance. In order to get the undue advantage if any person or any organization dos some unlawful acts it will be considered as negligence. If the negligence is proved against the person or the organization, the concerned person will be barred to take the advantage form the insurance company. Yes, if there will be any will full misconduct towards the insurance policy it will be considered as gross negligence. Any sort of carelessness reckless disregard for the safety or lives of others will also be considered as a kind of negligence.

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Consequential and liquidated damages: In case of insurance all possible steps should be taken in order to prevent the damage to the property and other assets. However there are certain conditions where the damages to the properties are unavoidable and this sort of damages are called as consequential damages. For an example a house is insured under a policy but due to some natural calamity or some unavoidable reason if a tree falls on the house and it get damaged it will come under the consequential damages. Similarly under the liquated damages a party will gets protection in breach of a contract of the obligation to perform the balance of the contract.

Useful insurance terms which you must know-I

In today’s date each and every person has their own insurance for various categories. Be it a life insurance or a non life insurance, irrespective of the type of insurance everybody will love to have insurance with them. If you have any idea about the various terms of insurance you will not have any problem in picking the right insurance for you. However if you are not aware about the policies and terminologies, here we will educate you about the various terminologies of insurance. Have a look:

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Insured: The term insured is used after a person or any organization got an insurance policy. Under the policy the person or the organization that has been protected under the policy of insurance is called as insured. The insured can get protection against various aspects like loss or damage to property or, in the case of a liability policy, defend him against a claim from a third part subjected to the terms and condition of the policy.

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Named insured: you have learned about the insured, where the insurance policy gives protection against various aspects to the insured. However the named insured is an extension to the insured. Under the named insured the insurance will give protection to the person or the organization under certain aspects according to the policy of the insurance.

Additional insured: Under additional insured the insurance holder get the benefits for certain aspects. At the time of signing the policy the insurance company provides some extra benefits to the insured under the head of additional insured.

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Co Insurance: This term is a self explanatory and under this category both the policy holder and the insurance company get benefit. In fact in actual practice people this sort of insurance is not active in the market. To be simpler with the co insurance there will be involvement of two insurance policies Company but a single insured.  Both the insurance policy holders agree to pay certain amount of insurance amount to the insured under certain term and condition.  Prior to take the policy both the insurance company makes their necessary homework in accessing the risk involved in the matter and accordingly they agree for a co-insurance.

Premium: it is the amount of money that the insurance holder has to pay to the insurance company periodically according to the term and condition of the laid at the time of the taking the policy. If the insurance holder fails to pay the premium well on time, he has to pay the premium with penalty.

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Limit for a policy: This term is well appropriate for all kind of life insurance. For the no life insurance the term policy limit is not valid. In general practice each and every insurance policy has its own maturity value on the maturity date.  Once the maturity date is over the insurance holder get the maturity amount, however for certain insurance policy there exists a maximum shield. Beyond which the insured can’t get the maturity value and this amount is called as policy limit.