Insurance fundamentals · 2 min read

Key insurance terms explained

Understanding the language of insurance helps you evaluate a policy. These general definitions provide context; the definitions and terms in your own documents take precedence.

Premium

The amount charged for insurance. Evaluate it alongside the scope of coverage, applicable limits and the costs you would retain.

Deductible

The portion of a covered loss you may need to pay yourself. Some markets use the term “excess.” The amount and how it applies depend on the policy.

Limit and sublimit

A limit sets a maximum amount payable under the relevant terms. A sublimit sets a separate, usually lower, maximum for a particular type of loss.

Exclusion

A provision that removes or restricts coverage for specified circumstances. Review relevant exclusions alongside the description of what is covered.

Endorsement

A document that changes the policy by adding, removing or amending terms. Read endorsements together with the main policy documents.

Declarations page or policy schedule

A summary of key details, such as the insured parties, policy period, selected coverage and amounts. It does not replace the full policy wording and endorsements.

This guide is general information, not individual insurance advice. Policy wording and local requirements vary. Discuss your circumstances with a qualified advisor.