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Terminology

A Quick guide to insurance terminology


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Terms and Conditions ("Ts and Cs")

The terms and conditions in a policy set out the general and special arrangements, provisions, requirements, legal rules, specifications, and standards that form an integral part of the agreement or contract between you and the insurer. Your policy document is a very important document, and you must read and understand it.

Clauses: Clauses are sentences and paragraphs describing the responsibilities of both you and your insurer and other terms and conditions that may apply to your policy.

Conditions: These are detailed conditions in your policy and are requirements that must be in place or complied with by you so that you can enjoy the benefits of the policy.

Policy term: A policy term is a term or clause in a contract. There are different classes of terms in a policy, such as conditions, warranties, exceptions and exclusions, extensions, clauses, and provisions.

(In long-term insurance [life insurance], the policy term may refer to the period during which the contract may be in force, i.e., its period of insurance.)

Provision: A policy provision is a term that may require certain things to be done or not done. If you do not comply with a provision, it may affect your cover, premium, or claim.

Third party cover (third party insurance)

Third party cover is insurance that covers you for damage or loss caused to others through the use of your vehicle and for which you are held liable. This can be part of a comprehensive policy, or it can be bought separately as a stand-alone policy.

(See the definition of Held Liable)




Total loss cover

Total loss cover is insurance that provides cover for an item or property only when it is stolen, lost, or totally destroyed. This type of policy will not cover you when the items that are damaged can be repaired.

Total loss is a condition of real or personal property when it is lost, damaged, or destroyed to such an extent that it cannot be economically or safely be rebuilt or repaired. In the event of a total loss of property, the insured value of the property lost is paid.

This may be different from comprehensive coverage.