Legal Jargon Explained

• Betterment
  If a company replaces property on a new for old basis, this is a form of betterment, in other words the insured is in a better position after a claim than before it. True indemnity would require a deduction to be made for betterment.
• Caveat Emptor
  Let the buyer beware.
• Condition of Insurance
  Something which goes to the root of the contract, if broken, the contract can be repudiated.
• Contribution
  When several insurers cover a risk & all make contributions to the cost of claim.
• Cover Note
  Temporary form of cover until contract terms have been agreed.
• Disclosure
  It is the duty of the insured to disclose any material facts to the insurance broker.
• Excess
  The amount you must pay towards any claim.
• Fault/Non-Fault ClaimThe terms fault and non-fault can be confusing. A non-fault claim is simply a claim where we are able to recover all our costs from someone else. If we are not able to recover all our costs, then it is a fault claim even if you didn't cause the claim to happen.
• Indemnity
  Exact financial compensation sufficient to place the insured in the same financial position after a loss as he enjoyed before it occurred.
• Insurable Interest
  In order to insure something, you must have a particular interest in the subject matter.
• Insurance Contract
  A contract is a legally binding agreement enforceable at law made between two parties whereby one party pays the premium and the other undertakes to pay a sum of money following the occurrence of a specified risk.
• Material Facts
  Anything that would influence a prudent underwriter in fixing a premium or deciding whether to write the risk.
• No Claims Bonus
  A discount you get for not making any claims during an insurance year.
• Non-Disclosure
  Where an insured does not disclose a material fact.
• Policy
  The policy is not the contract, the contract is the invisible agreement entered into by the parties and the policy is merely the evidence of the contract.
• Policy Schedule
  Document showing the car you are insuring and the cover you have.
• Subrogation
  The insured is entitled to indemnity but nothing more than that.
• Territorial Limits
  Generally Great Britain, Northern Ireland, the Isle of Man and the Channel Islands, including travel between any of these.
• Third Party
  This is someone or an organisation other than you and your insurer.
• Total Loss/Written-off
  When we decide your car is uneconomical to repair following an accident, theft, or when your car is stolen and recovered and if:
  it is impossible to repair
  it isn't safe to repair
• Utmost Good Faith
  Special insurance term that the insurer believes that the insured has disclosed everything so that they enter into a fair deal (the insured knows everything about himself & the insurer nothing).