The biggest hindrance you can face while reading through contracts and policies for new insurance coverage is the insurance language being used. The terminology is so complicated that it can often make your experience seem a lot more difficult than it actually is. So, here are a few terms that you will come across while getting your insurance… 

Insurance Dictionary

insurance dictionary

insurance dictionary


Economic device whereby the individual or business pays a cost (premium) in exchange for protection against financial loss. The agreement is a contract also known as an insurance policy.


Insurance Broker :

Represents the interests of the insured in searching for insurance coverage at the lowest cost and highest benefit to the insured. The broker may also be an agent of the insurer for purposes of policy collection and delivery of the policy. 


Declaration :

Part of the insurance policy that identifies the named insured, policy period and limit of insurance.


Premium :

The premium is what you will be paying in order to be covered by your insurer, it can be paid monthly or yearly.  This is your bottom line.


Insurance Agent :

The insurance company representative who sells policies on behalf of the insurer. An independent agent represents more than one company; a captive agent represents only one company. 



This is the amount you will be responsible to pay from a claim before your policy kicks in. So for example, if your claim is for AED 1000 and your deductible is AED 300.  Then you have to pay AED 300 and your insurer will pay the remaining AED 700.  Deductibles vary from policy to policy, some are yearly, some are according to each claim, so make sure you know how much it is and what kind it is.


Endorsement :

A written agreement attached to the insurance policy which alters the provisions of the contract.


Beneficiary :

And this is basically the person who reaps the rewards of the policy.  So for example with life insurance, the beneficiary would be the one to receive the money if someone passes away.



Incurred but not reported losses. This is for losses that have occurred during a stated period, usually a calendar year but have not yet been reported to the insurer.


Pooling :

The method by which each member of an insurance pool shares in every risk written by other pool members.


Public adjuster :

Hired by the insured, an adjuster who operates independently from insurance companies to investigate and settle claims.


Policy holder: 

This is the person under whose name the policy is registered.  They may be different from the beneficiary.


General Liability:

Insurance to protect an owner or operator of a business from a wide range of liability exposures. 


Negligence :

Failure to use that degree of care which an ordinary person of reasonable prudence would use to protect others from harm. 


Warranty :

No we don’t mean the warranty on your new TV.  In this case, warranty is the condition included in your contract which you have to abide by in order for your coverage to remain valid.  Some examples of such conditions are keeping your valuables in a safe for home insurance or keeping your car locked for car insurance.  Make sure to review your warranties and be diligent in following them.


Underwriter :

The professional responsible to assess the merits of each risk and decide a suitable premium for accepting all or part of the risk.


Clause :

A section of an insurance policy dealing with various coverages, exclusions, duties of the insured, locations covered and conditions that terminate coverage.


Rider :

An endorsement to an insurance policy that modifies its clauses and provisions, including or excluding certain conditions from coverage.


Coinsurance :

Similar to the deductible, coinsurance is a set percentage that you have to pay off the claim.  After your deductible has been applied you may have a coinsurance of 20% which means you have to pay 20% of the claim and your insurer pays 80%.


Catastrophic event :

An event that causes loss to many people at once. Also called catastrophe, several examples are tornados, hurricanes and plane crashes. 


Indemnification :

Insurance principle which states that the insured, after a loss, should be restored in whole or in part by payment, repair or replacement by the insurer.


Copayment :

Yes, we know the words are all starting to sound the same but copay is a bit different than coinsurance.  With the copay clause which is usually related to health insurance, there is a flat fee that you have to pay before visiting a physician, for example, or collecting a prescription.


Exclusion :

A little more straightforward, exclusions are everything that isn’t covered by your policy.  Something to definitely read and understand thoroughly.

Actuary :

A professional trained in the mathematics of insurance and risk management, including the calculations of premiums, policy reserves and other values.


Conditions precedent to liability:

 This term we rarely hear of but it is important because this is everything you have to do before you are eligible to be covered by the insurer.  One of the most common is the notification period for claims and another may be making a police report within a specific time frame when you are robbed for example.


Provider/service network :

This is basically the network of providers that will be doing the work when you file a claim whether it is the network of physicians, or hospitals, or car garages.