Your tool for simplifying industry jargon
Any incident that is not man-made, which causes destruction to property and plants/crops, and/or injury or death to animals and people. Examples include earthquakes, storms (rainstorms, hurricanes, etc.) lightning and tsunamis.
An insurer compensates the insured for lost or damaged property according to the percentage of its responsibility if the insured property is insured for less than its value. This is applied by the insurer on each claim the insured makes regarding the property. A house insured for R200 000 but valued at R400 000 is insured for half its value, therefore, every time the insured claims for loss or damage to that property the insurer will only compensate for 50% of the claim and the insured will have to meet the costs of the remaining 50% .
In insurance “ex gratia” means goodwill compensation to the insured for loss or damage to the insured property that the insurer is not compelled to pay in terms of the insurance policy.
In insurance “material fact” refers to the essential information about a person or property which can influence the insurer's decision whether to accept a risk to insure or whether to extend more conditions or to increase the premium.
“Negligence” is measured or decided by using the standard of a reasonable person. A reasonable person is a person of similar kind to the one who failed to do or not do. E.g. in the event of a motor vehicle collision, to determine whether the driver of the vehicle was negligent or not, a reasonable person is assumed to be: (a) a person of sound mind and observation with; (b) experience of driving in similar conditions, has knowledge of driving; (c) and has a valid driver’s licence
(a) In situations where a person fails to give information when it is necessary or a requirement to do so. \n(b) In situations where a person is not allowed to share particular information with certain persons who usually have an interest in that information.\n
In insurance “passenger liability” refers to cover to compensate a passenger on behalf of the insured as imposed by law for injuries or death of that passenger.
In insurance terms, “reinstatement” refers to a situation where the insured's insurance cover ended for a particular reason and the insurer subsequently reinstated the cover.
In insurance “salvage” refers to the insurer becoming the owner of the damaged property of the insured if the insurer compensated the insured to the maximum amount of cover for that property. This applies to movable property such as motor vehicles and electronic computers.
In insurance “third party liability” means cover to compensate a third party on behalf of the insured, if the law compels and holds the insured responsible for loss or damage of the third party's property or for injuries or death of the third party.
“Without prejudice” is a term used in written communications referring to a reservation of rights by the party who writes the communication. This aims to protect the writer in such that the communication cannot be used against him/her in the communications that will follow or in a court of law. An example is when an insurer makes an offer to settle a claim ex gratia. The insurer will insert the words \"without prejudice\" as an indication of reservation of its rights to refuse to pay the claim if the insured does not accept the ex gratia amount or should the claim escalate to the Ombudsman or court.
This applies to the address where the insured lives. An address is required by insurers as it is a method used to assess the risk of accepting or declining to insure a property.
“Prescription” refers to a period of time allocated by law or contract in which a person(s) (including organisations such as companies) must act to enforce their rights. Failure to act within this timeline, such person(s) will no longer be able to enforce his/her/its rights if they fail to act within this timeline. For example: (a) the law requires that a person (company) must act to collect its funds owed by other person(s) (company) within three years. Failure to do so within this timeline will result in the person (company) losing the right to act to collect the funds. This three-year period within which to act, includes enforcement through court process or adverse listing at the Credit Bureaux. (b) In insurance an insured has a timeline (which will be stated in the policy) in which to claim under an insurance policy. If the insured does not claim within that time he/she will lose the right to claim and the insurer is not obliged to compensate for a claim submitted after the expiry of the prescribed period.
This is the right that an insurer can exercise to recover from a third party (who has wrongfully caused the loss or damage to the insured property) to cover the costs it has incurred to compensate the insured. The policy, which is a contract between the insured and the insurer, must state that the insured grants this right to the insurer.
“Jurisdiction” refers to a capacity or boundary allocated to a person or institution in which to exercise authority. For example: Capacity – the law requires financial institutions to possess a license to sell specific financial products; therefore an institution that possesses a license to sell or underwrite short-term insurance cannot sell or underwrite long-term insurance. Boundary – should an accident occur between two vehicles along the N1 in Cape Town, the party who intends to sue must approach a court in Cape Town because a court in Johannesburg is out of boundary and does not have jurisdiction to adjudicate the dispute.
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