Chapter 2: Key Terms Flashcards
Key Term: Certificates of Insurance
Definition: A document that proves you have insurance. It summarises key details of the policy and is used to provide proof to third parties such as clients, vendors or landlords that you are insured.
For compulsory insurance, it is a legal requirement (e.g. motor and employers’ liability)
Key Term: New Business Declarations
Definition: A document that outlines the details of a new insurance policy. It includes information like who the policy is for, what is covered and the terms of the policy.
Key Term: Proposal Forms
Definition: A document used to formally request insurance coverage. It included detailed information about the person or entity seeking insurance, the type of coverage desired, and any relevant history or circumstances that might affect the policy.
Key Term: Contract Certainty
Definition: All terms between the insured and the insurer are fully agreed upon before the contract starts, and the documentation is provided promptly. This ensures both parties understand the coverage and conditions, reducing the risk of disputes.
Key Term: Policies
Definition: A formal document that evidences the contract (not the contract itself) which includes details of the insured, item/exposure, perils, period of cover, exemptions, conditions, premium and other relevant information.
Key Term: Quotations
Definition: A formal offer from an insurer (or intermediary) that outlines the premium and terms and conditions. It is based on the information provided by the proposer and is not legally binding until accepted by the proposer and confirmed by the insurer.
Key Term: Cover Notes
Definition: A temporary document that is issued as evidence that insurance is granted pending the issue of the policy or amendments which includes inception date, policy terms, risk information, any special terms and expiry date.
Key Term: Premium Calculation
Definition: The process of determining the cost of an insurance policy. Premiums are usually arrived at by applying a premium rate to a premium base, with the rate reflecting the hazard associated with the insured, and the base being the measure of exposure.
Key Term: Statements of Facts
Definition: A document that outlines key factual information a proposer provided when they first applied for insurance, insurers must make sure these details are still correct when renewing a policy.
Key Term: Insurance Premium Tax
Definition: Tax payable by the policyholder but insurers are responsible for collecting the tax and accounting to HMRC.
Key Term: Premium Payment
Definition: The money paid for insurance cover.
Key Term: Subjectivity
Definition: Refers to the conditions or requirements that must be met by the policyholder for the insurance coverage to be valid. E.g. subject to a survey being carried out.
