Insurance Claim Jargon – A Few Terms Explained

Like any sector, an insurance claim has its own jargon, often completely meaningless to the lay-person. At Allied Claims, we try always to talk in plain language to our clients and explain any technical terms, but it’s as well to know some of the terminology for any contact with other professionals, such as a Loss Adjuster.
Over the next few months, I’ll be giving a guide to some of the most important terms. Here are three to start.

Accidental Damage

insurance claim accidental damage
Unexpected and unplanned damage or harm caused to a property or a person.
This seems obvious, but “accidental” doesn’t have quite the usual meaning for the purposes of insurance. For damage to be judged accidental, it must be clear that you haven’t substantially contributed to the damage by action or negligence.
For example, suppose you’re carrying a sealed tin of paint through your house. You stumble, the tin flies out of your hand and hits the floor hard enough to burst open. Suddenly, you have a carpet that looks like a Jackson Pollock painting.
This is definitely accidental, and your insurance claim should be accepted. If, on the other hand, you were carrying an open tin of paint with no lid, the Loss Adjuster may judge the damage as partially your own fault and advise the insurance company to refuse the claim.

Aggregate Limit of Indemnity

The maximum amount an insurer will pay for all insurance claims over a set time frame.
Understandably, an insurance company isn’t willing to commit an unlimited amount of money per claim. Most people only ever need to make one or two claims on an insurance policy, if any, but there are exceptions.
Most policies will include an aggregate limit of indemnity, which will set a figure on the limit they’re liable to pay out in total over a set period. This is usually the lifetime of the policy, but occasionally a different time-scale is specified. If the combined total reaches this cut-off point, the insurance company will no longer pay your claim, however valid.

Assurance vs Insurance

Assurance is against something that will happen; insurance is against something that may happen.
insurance claim v assurance
Have you ever wondered why you have Life Assurance but Property Insurance? That’s because you will die (though hopefully not for a long time), whereas you may never need to make an insurance claim on your property.
This obviously affects the way in which the risk is calculated, although assessments will still be made to calculate how long you’re likely to live, and therefore how many payments the insurance company can expect to receive. Ultimately, though, they will need to pay out.
If you need any help with your insurance claim, ring us on 0800 999 5679 or go to the ‘Contact@ section of the website by following this link >>>

Insurance Claims and “The Insurance Act 2015”

Many experts consider The Insurance Act 2015, which comes into force later this month, and what it means for insurance claims, to be the biggest shake-up in insurance law for over a century. Its changes are aimed at businesses and corporations, rather than consumers, and most crucially changes the principles surrounding disclosure and penalties for non-disclosure.
The Act changes correct practice in dealing with insurance claims amongst other areas for insurance companies as well as for insured parties, but the most important things for businesses to be aware of are:
  • Instead of a vague obligation to reveal all circumstances affecting the insurer’s decision, the Act introduces a “duty of fair presentation”. This defines matters deemed to be known as those held in their records, those available to senior management and those available to a responsible person, such as a broker.
  • Previously, insurers could declare the policy invalid for any non-disclosure (e.g. if windows weren’t locked as declared, even if the insurance claim were for flood damage). The Act gives a sliding scale of remedies for insurers, depending on how serious the breach is, ranging from invaliding the whole policy to reducing the cover.
  • The Act specifies that, while a specific insurance policy may be agreed by both parties outside the terms specified in the Act, the insurance company must clearly explain the differences and their implications.
insurance claims commercial premisesThe Act makes it even more crucial than before that all relevant parties are involved in setting up a commercial insurance agreement, to ensure that nothing that should be disclosed is overlooked. This is always best undertaken with the advice and expertise of a professional insurance broker.
Allied Claims, who offer an expert loss assessor service specialise in property and business insurance claims, encounter situations that stretch the imagination, but that’s nothing to excuses given in other sectors. Here are just a few of the reasons we avoid car insurance:
  • “To avoid a collision I ran into the other car.”
  • “The telephone pole was approaching and I was attempting to swerve out of its way when it struck the front end of my car.”
  • “First car stopped suddenly, second car hit first car and a haggis ran into the rear of second car.”
Advice from Our Blog
Our blog gives regular updates on the insurance sector, though regrettably we’ve no advice on how to avoid being hit by a haggis.
If you want to know what insurance claims have in common with treating cancer, check out the post on the many uses of thermographyThermography, while our explanation of the Proximate Clause is essential reading to anyone who wants to make sure they have all eventualities covered in their policy.
Have a Great Month
We look forward to doing business with you or seeing you at networking events — or perhaps someone you know has a insurance claim. In the meantime, feel free to check out our website and read our blogs.