Terms

A

Accident

An accident is an unexpected and unintentional event that can result in:

• Damage.
• Injury.
• Harm.

Accidental damage

Accidental damage is any unintentional damage or destruction of property. This includes damage caused by an unexpected event or by human error. 

Aftermarket parts

Parts that are made by another company other than the original manufacturer. 

Agent

An agent is a person who represents an insurance company. Agents usually sell insurance products on behalf of an insurance company. Agents often provide guidance on what coverage is suitable to a person’s needs. Agents also often handle the claims process.

Apportionment

Apportionment is the process of dividing responsibility for a loss among multiple policyholders.

Appraisal

The process of determining the value of an asset for insurance purposes.

Act of God

An event that is beyond human control and is not caused by human action or inaction.

Actual cash value

The value of an asset at the time it is lost or damaged. Depreciation and various other factors are taken into account to determine this amount.

B

Beneficiary

The person or entity who receives the benefits of an insurance policy in the event of a claim. The policyholder may name one or more beneficiaries. A policyholder can change the beneficiary designation at any time.

Benefit

The amount payable by an insurer to a policyholder or beneficiary for an insured event.

Bodily injury

Bodily injury refers to physical harm, damage, or impairment to a person’s body. These injuries can be caused by an accident, illness, or other cause. 

Book value

Book value is the total value of an asset as recorded in a company’s financial statements. To calculate book value you can subtract the depreciation of an asset from the original cost of an asset. It’s important to note, book value does not always reflect the market value or actual value of an asset. Some assets often sell for a higher price than their book value, especially if the demand is high.

Broker

A broker acts as an intermediary between a customer and an insurance company. Insurance brokers often work independently and sell various policies from different insurers. Brokers are paid a commission or fee by the insurance company for any policies they sell.

C

Cancellation

Cancellation refers to the termination of an insurance policy. A cancellation will occur when a policy is terminated. A policy may be terminated by either the policyholder or the insurance company.

Car Insurance

Car Insurance is a type of insurance policy that provides cover for a policyholder’s car. Car Insurance provides financial protection to vehicle owners in the event of: 

• An accident.
• Theft.
• Other incidents that may cause damage to a car.

Car Insurance policies cover the cost of repairs or replacement of the vehicle. Some policies may also cover injuries or damages to third parties.

Certificate of insurance

A certificate of insurance is a document issued by an insurer. This document provides proof of insurance coverage.

Claim

A claim is a request made by a policyholder to an insurer to provide compensation. This request is made for a loss or damage, as per the terms and conditions of an insurance policy.

Claimant

A claimant is the person claiming an amount from an insurance company.

Claim examiner

A claim examiner is the person responsible for investigating an insurance claim.

Claim frequency

Claim frequency is a measure of how often a policyholder submits an insurance claim.

Collision

The physical contact of a vehicle with another object or vehicle resulting in damage.

Commencement date

The commencement date of your policy is the date your cover starts.

Commission

This is an amount of money an insurance company pays a broker for selling an insurance policy.

Comprehensive Insurance

A type of insurance that provides protection for a wide range of potential damages to a car.

Contract

A legal agreement between an insurance company and a policyholder.

Cover/Coverage

The financial protection provided by an insurance policy for specific risks or events.

Customised vehicle

A vehicle that has been altered from its original factory specifications. This includes any performance, equipment or accessory upgrades.

Cyber Insurance

No one wants to lose money from a cyberattack. Cyber Insurance protects you from financial loss caused by a cyberattack.

D

Damage

Damage can be defined as any loss of harm caused to another person or property.

Deductible

A deductible, also known as an excess, is a portion of a claim you pay out of pocket. 

Deposit Insurance

Deposit Insurance protects your deposit. Deposit Insurance covers the deposit you paid towards buying your vehicle. If your vehicle is stolen or written off, your deposit is covered.

Depreciation

The decrease in the value of an asset over time.

Driver Assist

Driver Assist helps you with those unavoidable tasks of being a vehicle owner. Things like renewing your vehicle licence, paying fines & more.

E

Effective date

The effective date is the date on which an insurance policy becomes active. This is the date on which an insurance policy begins to provide coverage to the policyholder.

Excess

An excess is a predetermined amount that the policyholder agrees to pay towards the cost of a claim. A policyholder needs to pay this amount out of pocket before an insurance claim is processed.

Exclusion

An exclusion is provision in a policy that specifies the types of events that are not covered. Exclusions are used to limit the scope of liability for the insurer. 

F

Financial Services Provider (FSP)

An FSP is a company or individual that provides financial products and services. Insurance companies are FSPs. 

Fraud

Fraud is the intentional misrepresentation or concealment of information.

G

Grace period

A grace period is a period of time after a premium payment is due where an insurance policy remains in force. This is to allow the policyholder time to make the outstanding payment.

Group Insurance

Group Insurance is a type of insurance policy that covers a group of individuals. This can include employees of a company or members of a trade association.

I

Insurance adjuster

An adjuster is an independent claims professional who investigates and evaluates insurance claims. An adjuster investigates claims on behalf of an insurance company.

Insurance company

An insurance company provides insurance to individuals or organisations. Policyholders pay a monthly premium for financial coverage. 

Insurance policy

An insurance policy is a contract between an insurer and a policyholder. The insurance policy outlines the terms, conditions, and cover provided by the policy.

Insured

The insured is an individual or entity that is covered by an insurance policy.

Insurer

The organisation who provides an insurance policy.

K

Key Insurance

Key Insurance is an insurance policy that provides cover for lost or stolen keys.

L

Legal Insurance

Legal Insurance is a type of insurance policy that gives you cover for your legal expenses. Legal Insurance covers a range of personal legal issues, both planned and unforeseen.

Limit

The maximum amount of protection provided by an insurance policy.

M

Market value

The current price that an asset would likely sell for in an open market.

Misrepresentation

Written or verbal statements that are untrue or misleading.

Mitigation

Steps taken to reduce the amount of loss in a situation. 

Motor Warranty

A Motor Warranty protects you when your car has a mechanical or electrical breakdown. A Motor Warranty covers the cost of repairs or replacements for certain parts of your car. 

N

Named driver

An individual specifically listed on an insurance policy as a driver of a vehicle. Named drivers are covered by the policy when operating an insured vehicle.

Negligence

Negligence is the failure to exercise reasonable care. Negligence  results in harm or damage to another person or property. Negligence can be used as a factor in determining liability for damages or injuries.

No-claims bonus

A no-claims bonus is a discount given by an insurance company to policyholders. This discount is only given to those who do not file any claims during a specific period of time.

Non-disclosure

Non-disclosure is the failure to provide complete or accurate information. Non-disclosure can result in the policy being void or a claim being denied.

O

Occasional driver

A driver who is not the most frequent driver of a vehicle listed on an insurance policy.

Original Equipment Manufacturer (OEM) parts

OEM parts are parts made by the same manufacturer as the original parts.

P

Panic Alert Insurance

Should you be a victim of an armed robbery, mugging or assault, there are many things that can be lost. Panic Alert Insurance gives you cover for your valuables. The Panic Alert App provides emergency response wherever you are in South Africa.

Physical damage

Visual damage to a property or an asset. 

Policy

A policy is the contract between an insured and insurer.

Policyholder

A policyholder is the person or entity that owns an insurance policy. The policyholder has the privilege to exercise the rights outlined in the policy. A policyholder is responsible for paying premiums each month. 

Policy schedule

The policy schedule is a document that outlines the policyholders:

• Cover.
• Premiums.
• Excess.
• Other terms and conditions.

Premium

A premium is the amount paid by a policyholder to an insurance company in exchange for coverage. A premium is usually paid on a monthly basis. A premium  is determined by taking into account various factors. These factors include:

• The type of insurance cover.
• The amount of cover.
• The level of risk associated with the insured.

Pre-existing damage

Pre-existing damage on a car refers to any damage that was present on a car before the policy became active. Insurers are not required to cover pre-existing damage.

Proof of ownership

Proof of ownership is a document that proves ownership of an asset. This could be an invoice, photograph or certificate.

Q

Quote

A quote is an estimate from an insurance company on the cost of coverage under an insurance policy.

R

Regular driver

A regular driver is the person who mostly drives the vehicle.

​​Reject

If an insurer rejects a claim, they will not pay the policyholder. 

Replacement cost

The replacement cost is the amount it would cost to replace an asset with a similar one at today’s market value. The replacement cost takes into account any factors that may affect the value of the asset.

Risk assessment

A risk assessment is the process of evaluating the likelihood and potential effect of a loss or damage occurring.

Road Accident Fund (RAF)

In South Africa, RAF stands for “Road Accident Fund”. The RAF is a state-supported insurance provider that provides compulsory third-party liability insurance. This insurance covers bodily injuries sustained in vehicle accidents on South African roads. The RAF is funded through a levy on petrol purchases by motorists.

Road hazard

South African roads are littered with road hazards. Road hazards include things like potholes, glass and debris.

S

Scratch and Dent Insurance

Scratch and Dent Insurance keeps your car in tip-top shape. Scratch and Dent Insurance covers minor scratches, scrapes, dents and even tar removal.

Shortfall Insurance

Shortfall Insurance covers the difference between the amount you owe on your car and the actual value of your stolen or written off car.

Sum insured

The amount of money your asset is insured for. 

T

Theft

The act of taking someone else’s property without their permission. Theft is considered a criminal offence and is punishable by law.

Third-Party Insurance

Third-Party Insurance covers damage or injuries to a third party.

Total loss

Total loss occurs where an asset has sustained extensive damage. This damage is not worth repairing. A vehicle is considered a total loss if it can’t be repaired or if repairs are not economically feasible. 

Tyre and Rim Insurance

Tyre and Rim Insurance covers you for accidental tyre and rim damage caused by road hazards. 

U

Underinsured

A person is underinsured if they do not have adequate cover to pay for the replacement cost of an insured item. 

Underwriter

An underwriter is a person or company who evaluates insurance applications. An underwriter assesses the risk of providing insurance coverage to a specific person. The underwriter is responsible for determining the terms and conditions of coverage.

Underwriting

Underwriting is the process of evaluating insurance applications. This process helps to determine the terms and conditions of coverage.

Uninsured

An uninsured person is a person who does not have insurance coverage. An uninsured person is responsible for any damages or loss to their property.

V

Valuation

The process of determining the value of an asset or property for insurance purposes.

Valuation certificate

A valuation certificate is a document that stipulates the value of an asset. A valuation certificate can often be used as proof of ownership.

Vehicle Identification Number (VIN)

A VIN is a unique 17-digit code assigned to a vehicle for identification purposes.

Vehicle inspection

A vehicle inspection is carried out before your insurance becomes active. The inspection is to determine a vehicle’s physical condition.

Vehicle Insurance

Vehicle Insurance provides protection to the owner of a vehicle against losses. Vehicle Insurance covers losses caused by:

• Accidents.
• Theft.
• Other unforeseen events. 

Vehicle Insurance covers the cost of repairing or replacing the vehicle.

Void

An insurance policy that is void is not valid or enforceable. This is usually because of a violation of policy terms and conditions.

W

Waiting period

A waiting period is an amount of time that must pass before coverage will begin to take effect. During this period, you will not be able to submit a claim. 

Wear and tear

Wear and tear is the normal deterioration of an item from ongoing usage. Wear and tear still occurs even when an item is well maintained. Wear and tear is not caused by any neglect or abuse, but rather by normal usage of the item.

Write-off

A write-off occurs when an insurer declares a damaged car to be beyond repair. This happens when the cost of repairing a damaged or lost item exceeds the value of the item. When a car is written off, an insurer will pay the insured the actual cash value of the car at the time of the loss.

Z

Zero excess

If a policy has zero excess, you pay no excess when you submit an insurance claim.