Accident – An unforeseen, unintended event.

Agent – A person or a group of people selling insurance on behalf of an insurance company. 

Beneficiary – The person, people, or entity who will receive benefits from an insurance policy or an annuity contract.

Broker –An independent insurance professional licensed under the Insurance Act who advises customers on insurance. In Kenya, most brokers are members of the Association of Insurance Brokers of Kenya (AIBK).

Cancellation Notice – Termination of an insurance policy by either the Insurance Company or the insured before the renewal date.

Claim– A request for payment when the insured event occurs as per the terms of the insurance policy.

Co-pay –This is the percentage of each health care bill people must pay out of their own pocket. This is under the medical health insurance.

Endorsement – A written agreement expanding or limiting the terms and conditions of a policy.

Excess-This is the amount the insured pays when making a claim. The amount isspecified in the policy.

Exclusions or limitations – Provisions that exclude or limit coverage of a policy. 

First/ Second / Third Party- The first party is the insured, the second is insurance company and the third party is any other person(s) who may be affected by the insured actions.

Grace period – The time – usually 31 days – during which a policy remains in force after the premium is due but not paid. The policy lapses after 31 days if premium is not paid.

Insurable interest – Any financial interest a person has in the property, person or liability.

Insurance- a contract in which an insurance company promises to compensate an insured.

Insured- This refers to the person who has taken insurance and pays premium

Insurer- Is the company that accepts risks after receiving premiums and pays claims.

Lapse- The termination of an insurance policy because premium has not been paid.

Liability – The effects of your actions or lack of action to others while undertaking your responsibilities.

Loss history – This refers to the number of insurance claims previously made by an insured. An insurance company will consider loss history when underwriting a new policy or considering renewal of an existing policy.

Market value – The current value of the asset you are insuring such as your home, motor vehicle etc.

Material misrepresentation – A significant untruth on an application form which, if a company had access to, they might have rejected the application.

Policy- It is a formal contract /document issued by an insurance company to the insured (insured) setting out terms on which the insurance cover has been provided.

Policy period – The period a policy is in force, from the beginning or effective date to the expiry or end date.

Pre-existing condition – A medical problem or illness you had before applying for health care coverage.

Premium-The amount the insured pays an insurance company. It could be a one off payment or regular installments or as per the agreement with the insurer.

Proposal Form- This is an application form completed by a potential client for an insurance cover.

Refund – An amount of money returned to the insured for overpayment of premium or when a policy is cancelled.

Renewal – Continuation of a policy after expiry date

Rider- This is an additional benefit on a policy.

Risk/Peril – An occurrence that can cause loss to an individual or a business for example fire, theft, death, accidents and others. A named-peril/risk policy covers the insured only for the risks identified in the policy. An all-risk policy covers all causes of loss except those specifically excluded.

Sum insured- It relates to the value of the insurance and this is the basis upon which premium is calculated and claim paid.

Third-party claim – A claim filed by a third party against the first party’s insurance policy.

Towing coverage – This is motor insurance benefit that pays for towing charges when a car cannot be driven. It also pays labour charges, such as changing a flat tyre at the place where the car broke down.

Underwriter-The person who calculates how much premium to charge for various insurance products and accepts or rejects risks on behalf of insurance companies.

Underwriting – The process an insurance company uses to decide whether to accept or reject an application for an insurance cover.