Adviser
A person who has been engaged by Xyz Limited as an employee or independent contractor to act as a financial adviser in respect of Financial Products and Services and who, amongst other things, holds a current Practising Certificate.

Broker
An intermediary, appointed by the Insured, who gives advice on insurance matters, arranges insurances and places them with insurance companies or underwriters. A broker is normally paid by brokerage (commission) from the Insurer.

Claim
Notification to an insurance company that payment of an amount is due under the terms of a policy when a loss happens that is covered by that policy.

Claim Form
When loss or damage occurs and gives raise to a claim under the policy, the Insured must disclose information surrounding such loss or damage to the Insurer. Insurers usually request the Insured to complete the Insurer’s pre-printed claim form in order to gather the appropriate information required to assist in the claim settlement process, including acceptance of the claim.

Commission
The amount paid by an Insurer to an insurance Intermediary for the introduction of business, usually as a percentage of the premium.

Conditions
The policy conditions are affectively “rules” that set out what is expected from both parties to the contract.

Cover
The amount of protection provided by an insurance policy.

Declared Value
The value of an item that is declared by the customer at the time they take out their insurance.

EQC
The Earthquake Commission is a New Zealand government body set up under the Earthquake Commission Act 1993. The Act provides a natural disaster fund for homeowners and tenants who hold insurance. The Commission administers and collects the premium from insurers for the fund. It also handles claims against the fund from the insurers. Cover with EQC is compulsory for all qualifying property for which a fire policy is otherwise in existence.

Excess
The amount of loss that is to be borne by the insured party prior to being able to claim on the policy.

Declaration
A statement signed by the Insured, certifying the accuracy of the information that is given. Normally, a declaration appears at the end of a Proposal Form and Claim Form.

Earthquake Commission (EQC) Levy
The compulsory levy that is required to be paid by the Insured to obtain Natural Disaster cover from the EQC.

Endorsement
An amended Policy Schedule, that shows any alteration(s) to the cover provided under the Insurance Contract, that usually follows advise from the Insured of changes to the property insured (including change of location, change of vehicle, increased sum insured etc..).

Excess
The Excess (or Deductible) is the first amount of any claim that the Insured must contribute. An example of an excess is where the policy contains an Excess of $150, and the claim being made on the policy is for $1,000. The Customer will need to pay $150 toward the loss and the Insurer will pay the $850 balance.

Expiry Date
The day that the current period of insurance comes to an end.

Fire Services Levy (FSL)
The compulsory levy that is required to be paid by the Insured when a contract of insurance is issued that provides cover against the risk of fire.

Government Levies
A combination of the Earthquake Commission and Fire Services Commission levies.

Hazard
An exposure that may create, decrease or increase the chance of loss or damage from a given peril.

Indemnity value
The item's current value allowing for its age and condition at the time of the loss or damage.

Insurance
A means whereby the financial losses of a few are distributed over the many.

Insured
A person or organisation covered by an insurance policy.

Insurance Contract

The contract of insurance is made between the Insured and the Insurer. It is an agreement whereby the Insurer agrees, for a specified Premium and Excess, to provide cover to the Insured up to an agreed amount against loss or damage, subject to certain Conditions and Exclusions. The contract usually consists of three parts:

• The Policy document;
• The Policy Schedule (containing details of the level of cover and the terms on which cover has been granted); and
• The Proposal Form (containing the information disclosed by the Insured to the Insurer)

Liability
Responsibility for injury or damage caused.

Loss Adjuster
A professional who can be employed to value a loss. Loss Adjusters are most often encountered in respect of claims under home contents or buildings insurance.

Material Fact
A material fact is one which would influence the judgement of a prudent underwriter in accepting or rejecting a proposal for insurance, and on what terms.

Policy
The contract form, including the Schedule, which is issued by the insurance company to the Insured. It sets out the details of the insurance, including the property insured, the amount of insurance, the premium and excess, period of insurance, and other conditions and exclusions of the contract.

Premium
The money that must be paid by the Insured for the insurance policy.

Renewal
When the insurer and insured agree to continue the insurance from one risk period to the next.

Sum insured
The amount an insurance policy covers.

Period of Insurance
The period of time for which a policy is issued.

Utmost Good Faith
A duty imposed on both parties to an insurance contract. The legal duty implies full disclosure of all facts material to the contract during negotiations for the contract. This duty, in effect, is maintained throughout the existence of the contract by virtue of the policy conditions.