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General Insurance Terms: 5 General Insurance Terms Everyone Should Know!
What is General Insurance? How much do you know about General Insurance?
Some of us are still unsure as to exactly what this branch of Insurance policies covers, but don’t worry! We are here to assist you with the information you need!
Despite the varying types of Insurance available, it is crucial that you understand the Insurance jargon that accompanies the policies that you may take out for yourself or your loved ones. For example, “General Insurance” is an umbrella type of insurance, and various sub-types of insurance policies are offered through General Insurance; Motor Vehicle Insurance, Travel Insurance, Residential Insurance to name a few.
Having a policy is just one step of the process but understanding all of the terms relating to the service and the product is the next step. By understanding these terms, it helps you greatly in making the best financial decisions for yourself and your loved ones.
In this blog, we have outlined 5 Key General Insurance Terms that everyone should know whether deciding on an Insurance Policy or taking out one.
1. Premium – The premium is the price of insurance protection for a period of time. For example, Motor Vehicle Insurance premiums are paid on an annual basis, after which coverage is provided for the duration of that year. Upon completion of the year, the insurance coverage expires and the premium must be paid again to renew coverage.
2. Grace Period – The Grace Period refers to the length of time after which an insurance premium is due that a client can make their payment. For example, if the grace period is 31 days, then within the first 31 days after the date that premium is due the client is able to make their payments and still be given coverage.
3. Third-Party – Third Party is a term used in General Insurance, specifically for Motor Vehicular Insurance Policies. It refers to anyone other than the two parties who are in the insurance arrangement. For example, the first party is the insured (client), the second party is the insurer (the Insurance company doing the insuring) and the third party is anyone who is involved in a motor vehicular accident with the insured (first party).
4. Broker – A broker is an individual who assists in helping find the best possible Insurance products at competitive premium rates. Brokers are usually specialists in Insurance and Risk Management and they act on behalf of their clientele in the liaising with insurance companies and procurement of insurance policies.
5. Excess Clause – An Excess Clause requires the insured to face a loss more than the excess limit before the insurer pays off the entire claim. For example, if the total claimable figure is less than the excess limit then the insurer will not pay the claim. However, if the claim is more than the excess limit, the insurer pays the entire claim. The Excess Clause is used to discourage the insured from filing a claim for very small amounts.
Anyone should know these 5 General Insurance Terms as they are encountered frequently should you undertake an Insurance Policy. We at Guardian Group hope that this blog was informative and useful to you and look forward to you joining us next week!