The Key Insurance Terms

The key insurance terms

1. Insurance contract: a contract between the insurer and the policyholder setting out the terms of the insurance, such as the item insured, the cover, the term and the premium.
2. Policyholder:the person or company that takes out the insurance and pays the premium.
3. Insurer:the company that offers the insurance and, in the event of a claim, covers the policyholder's loss.
4. Premium:the amount the policyholder pays the insurer in order to be insured.
5. Cover:the benefit the policyholder receives from the insurer in the event of a claim.
6. Claim event:an event that leads the policyholder to claim a benefit from their insurer, such as an accident, an illness or damage to property.
7. Excess:the amount the policyholder has to pay themselves in the event of a claim before the insurer takes on the cost.
8. Sum insured:the maximum amount for which the insurer is liable in the event of a claim.
9. Risk:the risk the insurer takes on under the insurance contract, such as the risk of a car accident or of illness.
10. Reinsurance:insurance that an insurer takes out in order to reduce its exposure to a large loss, by passing part of the risk to other insurers.