A - Z of General Insurance

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Actual cash value
The value of lost or damaged property at the time of the loss, less depreciation. With regard to buildings, there is a tendency for the actual cash value to closely parallel the market value of the property.

A person from the insurance company who seeks to determine the extent of the firm's liability for a loss when a claim is submitted.

Agents and brokers put customers in touch with insurance companies, and help customers find the policies that are right for their needs and budget. Agents are registered with the General Insurance Association of Singapore (GIA). Brokers are registered with the Monetary Authority of Singapore (MAS).

When buying insurance, customers must fill out an application. Details on the application help the insurance company decide what policy and premium level is right for that customer. It is important to make sure all details on the application are correct or the payout may be affected.

Authorised driver
The people listed on the Certificate of Insurance as being drivers of the insured vehicle.

Authorised/Approved workshops
Insurance companies often have preferred workshops where they send customers' vehicles for repairs.

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See "Agents/Brokers".

Business Interruption
Provides coverage for a loss of earnings if the policyholder's business is shut down by fire, windstorm, explosion, or other insured event.

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Certificate of Insurance
A form verifying that a person has a valid insurance policy. Motor insurance policyholders should carry their certificate of Insurance in their vehicle at all times as the police may ask to see it in a routine check.

A demand made by the insured, or the insured's beneficiary, for payment of the benefits provided by the contract.

COE/PARF/OMV certificates
Certificate of Entitlement/Preferential Additional Registration Fee/Open Market Value certificates.

Code of Practice
Introduced in 2003, the general insurance Code of Practice outlines the minimum service standards customers can expect from their insurance company.

Comprehensive Policy
Usually associated with motor insurance, a comprehensive policy covers repair or replacement of your vehicle if it is damaged or lost as a result of theft, accident, vandalism or weather-related damage. It also covers injury and repair or replacement costs of other vehicles and property that are accidentally damaged by your vehicle. Comprehensive cover is generally more expensive than third party cover alone.

Compulsory minimum training standards
A minimum period of training insurance staff must undertake each year to stay current with industry trends, products and developments.

Cover Note
A document providing evidence of temporary cover while an insurance policy is being prepared.

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This is the amount the insured will be required to contribute before they can make a claim.

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Specific circumstances listed in the policy for which the insurer will not provide benefit payments.

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FIDReC is an independent and impartial institution specialising in the resolution of disuptes between financial institutions and consumers. It subsumes the work of the Consumer Mediation Unit of the Association of Banks in Singapore (ABS) and the Insurance Disputes Resolution Organisation (IDRO).

Filing a claim and getting an FIDReC's Case manager to review it is free of charge. Any ruling made is binding on the insurance company but not you.

112 Robinson Road
#13-03, HB Robinson,
Singapore 068902
Tel: 6327-8878
Fax: 6327-8488

Fine Print
A reference to imaginary small type in a policy contract supposedly containing exclusions, reductions, exemptions, and limitations of coverage.

Fortuitous Loss
Fortuitous Loss Losses that occur as a matter of chance. Losses are not controlled or influenced by the insured, for example, an accident.

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General Insurance Association of Singapore (GIA)
The General Insurance Association of Singapore (GIA) is the industry representative body of all 35 non-life insurance companies transacting business in Singapore. In addition to fostering public confidence in, and respect for, the general insurance industry, the GIA also represents its members' interests to government, trade bodies and associations in other industries.

The General Insurance Association of Singapore
180 Cecil Street, #07-02,
Bangkok Bank Building,
Singapore 069546
Tel: 6221-8788
Fax: 6227-2051

Gross Premium The net premium plus operating expenses, commissions and other expenses.

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A condition that increases the probability or severity of loss.

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Independent Damage Assessment Centres (Idac)
The Independent Damage Assessment Centre (Idac) network was set up to provide fast, impartial accident assessment service and to reduce repair fraud. There are 12 Idac centres at convenient locations around Singapore.

Some insurance companies require policyholders to deliver their vehicle directly to an Idac centre following an accident. Not all insurers require policyholders to use Idac. Check with your insurer if in doubt.

Idac Hotline

Indemnity A principle that says an insured should not collect more from insurance than the amount of loss.

Indirect Loss A loss that arises out of a direct loss but not caused directly and immediately by that peril.

Incurred Loss Ratio The percentage of losses incurred to premiums earned.

Insurance Policy The printed form which serves as the contract between an insurer and an insured.

Insurer The party that provides, for a fee, benefits in the event of loss. Your insurance company is your insurer.

Insured In property and liability insurance, the person to whom, or on whose behalf, benefits are payable. If you take out an insurance policy, you are the insured.

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Termination of a policy caused by the policyholder's failure to pay the premium within the time required.

Generally refers to:

  • The amount of reduction in the value of an insured's property caused by an insured event;
  • The amount sought through an insured's claim;
  • The amount paid on behalf of an insured under an insurance contract.

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Net Loss
The amount of loss sustained by an insurer after taking into account all applicable reinsurance, salvage, and subrogation recoveries.

Net Premium

  • The amount of premium minus the agent's commission;
  • The premium necessary to cover only anticipated losses, before loading to cover other expenses.

No Claim Discount
If you remain claim-free for a year or more, you are entitled to a No Claim Discount (NCD). The NCD reduces the cost of the following year's policy.

Notice of Cancellation
Written notice by an insurer of intent to cancel insurance, or written notice by an insured requesting cancellation.

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Partial Loss
A loss covered by an insurance policy that does not completely destroy or render worthless the insured property.

Persatuan Insuran Am Malaysia (PIAM)
The Malaysian general insurance industry body, with which the GIA has strong historical links. The GIA and PIAM hold an annual dialogue session to discuss matters of importance to both associations.

Policy Term
The period for which an insurance policy provides coverage.

The money an insured person pays to an insurer for insurance cover.

A person seeking insurance.

Pro-rata premium
A premium calculated on the exact number of days out of a full year of insurance cover.

Proximate cause
The cause actually responsible for the loss; the one that set in motion the events that led to a loss.

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The resumption of coverage under a policy that has been lapsed.

When one insurance company agrees to carry all or part of a risk undertaken by another insurance company.

The continuation of coverage under a policy beyond its original term by the acceptance of a premium for a new policy.

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Usually, a policy benefit or claim payment.

Statement of Facts
The Statement of Facts is an important document that helps insurance companies establish the facts in the event of a motor accident. Policyholders are asked to carry a Statement of Facts form in their car at all times. In the event of an accident, they should fill it out, sign it, and have the other driver sign it too. It is not an admission of liability. Statement of Facts forms are available from your insurance company, Idac centres, authorised workshops or the GIA.

Statutory Declaration
A legal document required by the law to declare the loss of the certificate of insurance, signed by you and witnessed by a notary public.

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The period for which a policy is issued.

Third Party Policy
Usually associated with motor insurance, third party policies provide cover for injury and damage caused by a person's vehicle to someone else's vehicle or property. Third party insurance is generally the cheapest kind of motor insurance, and is generally taken out by someone with a car of relatively low value to protect them from having to pay for damage their vehicle might do to a more expensive vehicle.

Third party, fire and theft
This is designed to cover injury and damage caused by a person's vehicle to someone else's vehicle or property. It also covers a person's vehicle if it is stolen or damaged by fire.

Total loss settlement and constructive total loss settlement
A total loss settlement results from the destruction of a vehicle in an accident or fire or loss as a result of theft. A constructive total loss settlement results from damage that is agreed to be beyond economic repai

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The process by which the insurer decides on what basis it will issue a policy.

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A statement made by the applicant for insurance that, if false, provides the basis for voiding of the policy.

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