Insurance Terminologies: Insurance terminologies can define as the meaning of certain terms and their application in insurance practice. It is the identification of those words that enhances insurance practice.
In insurance practice, the following terminologies must be given utmost attention. Among these include.
SHIP: A ship is a document that contains all the relevant information about the risk which a broker wants to place to the insurers in the insurance market. It is a detailed document issued by the insurance company to the insured showing the risk a broker wants to place the insurer.
Certificate of Motor Insurance:
The wording of the certificate of motor insurance may likely vary according to the vehicle involved.
Some insurers still print a different certificate for private cars; commercial vehicles motorcycles and motor trade risks with many different wordings according to the type of use of the vehicle concerned.
But the motor certificate is compulsory for all the users of the road and it is an offense to drive the vehicle on the road without having a motor insurance certificate.
Certificate of motor insurance contains the following:
a. certificate number
b. The registration mark of the vehicle
c. Name of the policyholder
d. The effective date of the commencement of the insurance contract
e. Date of expiring
Reinsurance: Insurance can be defined as an agreement between two parties-the ceding company and the reinsurance company whereby the ceding company agrees to cede and the reinsurance companies agree to accept based on the terms of the agreement.
Long-term agreement: This is an agreement to ensure for a fixed number of years. But either party is not obligated to insure and also the premium can be changed and subsequent renewals. There may be some amendments. So nothing is binding on any party.
Franchise: Franchise means a different thing in insurance than how it is selling other everyday English media. Franchising in ordinary English media is the right role.
But in insurance is a process in which the insurance company tries to reduce insured company to make trial claims. But if a loss occurs between a certain limit, the insured will bear it, but once it is above that limit, the insurance company will come and pay everything.
Examples: Losses between N100 insured should bear. But from N101 and above the insurance company will come and pay for everything.
Risk Premium: Premium simply means the amount given by the insurance company to the insured with respect Sum assured id the value of the subject-matter insured except otherwise state.
If the value of a building is $1000. That should be the sum assured, but there may be under insurance if the insured insures less than the value.
Average: Average in other classes of insurance. Average means proportion, part off; quota; Average is usually used to fight under insurance in general insurance, average does not apply to life assurance policies.
Risk premium: Simply means charging the subject matter without considering any other thing. A risk premium is an actual premium for the subject matter and the addition of profit, claim administrative expenses catastrophe, and reserve brings the normal premium.
Sum assured: This is the value of the subject-matter insured except otherwise stated. If the value of a car is $400,000. that should be the sum assured,
Non-proposal: This is also a term used in reinsurance which means that the spreading of risk is by negotiation and not by obligation and it exists in excess of loss ratio or stop loss.
This the type of insurance whereby insurance companies that insured a particular risk which is too big like jumbo jet, will also reinsure their own proportion of the risk; this type of insurance is called reinsurance pool.
Conclusion: Insurance terminologies are those keywords that are associated with insurance and which stand as a basis for insurance practice.
If one is acquainted with the terminologies of a particular field it guarantees his boldness and confidence in the use of words related to it.