Reference

Insurance glossary

Key Indian insurance terms in plain English.

Break-in: Policy expired before renewal, leaving a gap in cover; motor needs an inspection before cover restarts
Combined ratio: (Claims + expenses) ÷ earned premium; under 100% means an underwriting profit
Co-pay: Share of each health claim paid by the insured, for example 20%
CPA: Compulsory personal accident cover for the owner-driver, ₹15 lakh
Deductible: The first part of a claim that the customer pays before the insurer pays anything
Earned premium: The part of written premium for which cover has already been given
Endorsement: Mid-term change to a policy, with or without a change in premium
FNOL: First notice of loss: the moment a claim is first reported
Free-look period: 30 days to return a new life or health policy and get a refund less allowed deductions
IBNR: Reserve for claims incurred but not reported
IDV: Insured declared value: the motor sum insured, ex-showroom price less depreciation
Loss ratio: Claims incurred ÷ earned premium
MACT: Motor Accident Claims Tribunal, which decides TP injury and death claims
Moratorium: After 5 continuous years, health claims cannot be contested for non-disclosure except fraud
NCB: No claim bonus: OD discount of 20–50% for claim-free years
NSTP: Non-straight-through processing: needs an underwriter, inspection or medicals
PED: Pre-existing disease: a condition the person had before the policy started
Persistency: Share of life policies still paying premium after a set number of months
POSP: Point of sales person, licensed to sell simple products
Proposer: The person who signs the proposal and pays; may differ from the insured
SAOD: Standalone own damage policy
Sum insured: The most the insurer will pay under a policy or cover
Subrogation: Insurer recovers its payout from the party at fault
TPA: Third party administrator that handles health claims for insurers
TPPD: Third-party property damage
Waiting period: Time from the policy start before certain health claims are covered
Zero depreciation: Motor add-on that pays for replaced parts without deducting depreciation

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