Glossary

AAMI - Australian Associated Motor Insurers Limited (ABN 92 004 791 744).

ACCC - The Australian Competition Consumer Commission promotes competition and fair trade in the market place to benefit consumers, business and the community. It also regulates national infrastructure services. Its primary responsibility is to ensure that individuals and businesses comply with the Commonwealth competition, fair trading and consumer protection laws.

APRA - Australian Prudential Regulation Authority- is the prudential regulator of banks, insurance companies and superannuation funds, credit unions, building societies and friendly societies.

ASIC - The Australian Securities and Investments Commission enforces and regulates company and financial services laws to protect consumers, investors and creditors.

AAMI's Customer Service Charter - The AAMI Customer Charter is a written document containing service and reporting promises which we are bound to deliver.

Accident - An unplanned and unexpected event which occurs suddenly and at a definite place.

Accident rental car (AAMI car Insurance) - Accident rental car service can provide you with a rental car at a low daily rate while your car is being repaired. (See AAMI car policy for more details)

Actuary - A specialist in risk analysis, especially as it relates to insurance calculations such as premiums, reserves, dividends, and insurance and annuity rates. They usually work for insurance companies, particularly Life companies, to evaluate applications based on risk.

Additional Excess - This excess may be imposed in special circumstances, for example on high performance cars. It is payable in addition to any other excesses.

Adjuster - Also known as an assessor, is a representative of the insurer who seeks to determine the extent of the company's liability for loss when a claim is submitted.

Age Excess (AAMI car insurance) - This excess is additional to the standard excess if the insured car is being driven by a person in the age ranges specified on the insurance schedule and renewal notice.

Agreed Value (AAMI car insurance) - A car's agreed value is set at the beginning of each period of cover. It is based on the fair value given then for the cars make and model in the motor trade's most commonly accepted price handbook. The value doesn't change for the period of cover.

Annuity - A contract sold by an insurance company designed to provide payments to the holder at specified intervals, usually after retirement.

Arson - Any unlawful setting fire to property.

Assessor - See adjuster

Body Corporate - A group consisting of the owners of each strata property, established to maintain the common areas of flats or units and to take out insurance for the common areas.

Broker - An intermediary, who acts on behalf of a person who is applying for insurance. They earn a commission from the insurer, however, they have a responsibility to obtain the best cover for the best price possible. In certain circumstances a broker can also act as an agent for the insurer in terms of issuing a policy or collecting a premium. AAMI does not conduct business through brokers.

Building Insurance - See Home Building Insurance.

Bullion - Precious metals, such as gold, in the form of ingots or bars.

Business use (AAMI car insurance) - See Use.

CLERP - Corporate Law Economic Reform Program

CTP Insurance - Compulsory Third Party insurance (CTP Green slip in NSW) is the insurance that is needed when registering a vehicle. CTP insurance is intended for the situation where another person is injured or killed in an accident, which is caused by the driver of the insured vehicle.

Cancellation - The termination of a policy before the expiry date.

Carrier - Sometimes used to describe the insurer. Not generally used because of confusion with carriers of freight.

Catastrophe - See disaster

Certificate of Insurance - A certificate that acts as proof that a policy has been issued. Usually requested by a financial institution.

Certificate of Rating or No Claim Bonus - A certificate that acts as proof that a person has earned an insurance rating or no claim bonus entitlement.

Claims Ratio - The ratio of the cost of claims to earned premiums.

Collection or Set - A group of items of sufficiently common type, appearance or nature that they reasonably belong together and that is devalued if one or more of the group is lost or damaged.

Combined Ratio - A combination of the claims ratio and the expense ratio.

Common Law - The principles of law arising from court decisions.

Comprehensive Insurance - Provides specified cover for damage to the insured car as well as damage the insured car may cause to the property of others.

Commission - A fee charged by a broker or agent for services in the sale of an insurance contract.

Common property - See site.

Consequential Loss - A subsequent loss that results from the direct damage e.g. public transport costs incurred when a car is off the road due to and accident.

Contents Insurance - See Home Contents Insurance.

Cooling off period - Federal law provides that you can cancel your policy within 14 days of its purchase date.

Cover and covers - Means the protection provided by the policy.

Cover note - A Cover Note informs the insured that coverage is active - often interim cover

Coverage - The scope of the protection provided under a contract of insurance.

Depreciation - A decrease in the value of any type of property over a period of time resulting from use, wear and tear, or obsolescence.

Direct insurer - Is an insurer which deals direct with the consumer rather than through an intermediary or agent. AAMI is a direct insurer.

Disaster - A disaster is said to have occurred when the normal community and organisational arrangements cannot cope with a hazard impact.

Due date - The date a policy is in force to and by when a renewal premium must be paid.

Earned Premium - The amount of the premium that has been "used" during the term of a policy. For example, if a twelve month policy has been active for six months, half of the total premium has been earned.

Effective date - The date on which the cover of an insurance policy commences.

Endorsement - Means a special condition that applies to a policy. For example, an endorsement may state that drivers under a nominated age are not covered under the policy.

Excess - An excess on a policy is the first amount that must be contributed by the insured towards each claim. When one or more excesses apply to an AAMI policy, they will be shown on the insurance schedule and updated on the renewal notice.

Standard Excess This is the basic excess you must contribute towards each claim.
Age Excess This excess is additional to the standard excess if your car was being driven by a person in the age ranges specified on the most recent of your insurance schedule and renewal notice. (applies to AAMI car and motorcycle polices).
Additional Excess This excess may be imposed in special circumstances, for example on high performance cars. It is payable in addition to any other excesses.
Flexi-Premium Excess This is additional to the standard excess, and is optional. When you choose an additional Flexi-Premium Excess, your premium will be lower. The higher the additional excess you choose, the bigger the discount on your premium.
Inexperienced Driver Excess This excess is additional to the standard excess if your car was being driven by a person to whom an age excess does not apply, but who has held a driving licence for less than two years. (applies to AAMI car and motorcycle policies).
Unoccupied Excess If you claim for damage or loss to your insured property which occurs after your building has not been occupied for 60 continuous days, an additional compulsory excess is payable. (applies to AAMI Home Building, Contents, Fire & Theft Contents, Landlord, & Strata Title Landlord policies).
Extra Cover Excess This excess ordinarily applies when you claim for loss or damage to portable valuables that we have agreed to insure under the Extra Cover extension of AAMI™s Home Contents Insurance Policy. Whether an Extra Cover excess will be applied depends on the circumstances of each claim, see our Home Contents Insurance Policy Product Disclosure Statement for full details

Expense ratio - A measure of an insurers expenses in operating its business.

Expired policy - See lapsed policy.

Expiry date - The date coverage ceases.

Extra Cover for personal valuables (AAMI home contents insurance) - For most people, their home contents include portable valuables which they often wear or take with them when they are away from their home (see AAMI's Home Contents Insurance Policy for full details). Additional cover for accidental loss or damage to items such as jewellery, spectacles, clothing and certain personal vision and sound equipment (not mobile phones) is available be extending your AAMI contents insurance to include 'Extra Cover' , which is available by payment of an additional premium.

FSRA - Financial Services Reform Act

Family (AAMI home insurance) - Means the following people who normally live with you: your spouse or partner, your children, parents, grandparents, grandchildren, brothers and sisters, the children, parents, grandparents, grandchildren, brothers and sisters of your spouse or partner.

Family Rating (AAMI car insurance) - When your children insure their cars for comprehensive cover with AAMI, we award them a rating one level better than we would have otherwise. Our normal insurance acceptance conditions apply to the driver and the car. See also the AAMI Skilled Drivers course section on our website.

Fine Print - A reference to imaginary small type in a policy document purportedly containing exclusions, reductions, exemptions, and limitations of coverage. It is now a requirement for policy documents to comply with minimum type size.

Fire - Means burning with flames.

Flood - Means the inundation or covering of normally dry land by water which: escapes or overflows from, or cannot enter, because it is full or has overflowed, or is prevented from entering, because other water has already escaped or been released from it, the normal confines of any watercourse or lake, including any that may have been modified by human intervention, or reservoir, canal, dam or storm water channel. Flood does not mean storm water run off from areas surrounding the site or water escaping from any water main, pipe, street gutter, guttering or surface. AAMI Home Insurance does not cover flood.

Fraud - The term "fraud or dishonesty" encompasses all those risks of loss that might arise through dishonest acts or omissions.

GST - Goods and Services Tax.

General Insurance Code of Practice - The General Insurance Code of Practice is a commitment by the general insurance industry to aim for the best standards of service possible, and to promote better relations between customers and insurers. The Code describes standards in the areas of employee training, plain language policy documentation, claims handling and dispute resolution. It was introduced in 1995 with the backing of consumer groups, the federal government, insurers and the Insurance Council of Australia. More information on the Code can be obtained from AAMI or the Insurance Ombudsman Service. You can contact the Insurance Ombudsman Service on 1300 780 808.

Green Slip - See CTP insurance.

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

Hazard - A situation that increases the probability of the happening of loss arising from a peril, or that may influence the extent of the loss. For example, accident, fire, flood, liability, burglary, and explosion are perils. Slippery floors, flammable liquids, unsanitary conditions, unlocked and unguarded premises and poor roads are hazards.

Home buildings insurance (AAMI home insurance) - Is insurance for the buildings at the site used for domestic and residential purposes. (see Policy Disclosure Statement for full description)

Home contents insurance (AAMI home insurance) - Is insurance for certain items used primarily for domestic purposes. (see Policy Disclosure Statement for full description)

IBNR - Incurred but not reported, is the liability that an insurer has for losses that have happened but not yet reported as claims.

ICA - The Insurance Council of Australia represents the interests of the Australian general insurance industry.

Incurred claims ratio - The percentage of claims costs incurred to premiums earned (see earned premiums).

Indemnity insurance - Type of insurance that restores the individual as close as possible to the financial position that they enjoyed before the loss.

Inexperienced Driver Excess - See excess

Insurance - A device for transferring specified risks of individual persons to an insurer. The insurer agrees, for consideration (usually payment of a premium), to assume, to a specified extent, certain losses that may be suffered by the insured.

Insurance Ombudsman Service - Any AAMI policyholder who is dissatisfied with the outcome of his or her dealings with AAMI can contact the Insurance Ombudsman Service on 1300 780 808. See General Insurance Code of Practice.

Insurance schedule - Sets out the information given to an insurer upon which the decision to offer cover is made. It also displays the individual details of a policy.

Insured event - Occurrences which cause loss and damage which are listed in the relevant policy.

Insured - The party to an insurance arrangement to whom the insurer agrees to provide cover against specified losses, or to render services, subject to the terms of the insurance contract.

Insurer - The party to an insurance arrangement who undertakes to provide cover or to render services, on the happening of specified events.

Investment Income - The return received by insurers from their investment portfolios.

Item (AAMI home insurance) - Means an individual piece of home contents, such as an item of jewellery.

Just car insurance - is a specialist car insurance business of AAMI. It provides insurance for:

Lapsed Policy - A policy which has been allowed to expire because of non payment of premiums.

Leasehold - An agreement which gives a person the right to exclusive possession of a property.

Living with you (AAMI home insurance) - means any person normally living or staying in your home or at the site.

Loss - Generally refers to the amount of reduction in the value of an insured's property caused by an insured peril. In an insurance sense it usually does not mean "misplacing" an item.

Lifetime Rating One (AAMI car insurance) - When you have been an AAMI Rating One policyholder for one year without making an at fault claim, we recognise your good driving record with our AAMI Lifetime Rating One award. Your AAMI Lifetime Rating One status is protected for life, regardless of who was at fault in any claim you may make on your AAMI Lifetime Rating One policy.

Lifetime Repair Guarantee (AAMI car insurance) - Because AAMI takes total responsibility for the car repairs, AAMI guarantee them for the life of the car. Even if it is sold.

Limited cover specified items (AAMI home contents insurance) - Are home contents with limited cover under our contents policy which you have described to us, told us their current replacement value, we have agreed in writing to cover and you have paid us any additional premium we requested to insure them.

Market Value - The fair price for which something can be sold in its current condition.

Moral Hazard - A condition of morals or habits that increases the probability of loss from a peril. An example would be an individual who had previously arranged for the theft of his own car to collect the insurance.

Mortgagee - The lender in a mortgage contract.

Mortgagor - The borrower in a mortgage contract.

Negligence - Failure to use a degree of care which an ordinary reasonable person would use under the given or similar circumstances. A person may be negligent by acts of omission or commission or both.

New for Old (Home Insurance) - Replacing your existing old damaged items or equipment with new ones.

No Claim Bonuses - see rating

OEM - Original equipment manufacturer. Means the original manufacturer of the car or part.

Overinsured - A term used to describe the condition that exists when an insured has purchased coverage for more than the actual value or replacement cost of a subject of insurance. It is also used to describe a situation where so much insurance has been obtained it constitutes a moral hazard.

PIN - Personal Identification Number

Peril - The cause of a possible loss. Not to be confused with hazard.

Personal lines - This term is used to refer to insurance for individuals and families, such as private car insurance and home insurance. Contrast with business insurance and commercial lines. AAMI is a personal line insurer and also sells business insurance.

Period of cover - means the current period for which we have agreed to provide you with insurance cover. The current period is shown on most recent of your insurance schedule and renewal notice and any receipt we may send to you. When we make a write-off payment, the period of cover comes to an end.

Policy - means the Product Disclosure Statement and the policy schedule.

Policyholder - Generally use to describe the policy owner and/or insured. See Insured.

Policy schedule - a notice showing the particular details of a policy.

Premium - The price of insurance cover for a specified risk for a specified period of time

Private use - see Use

Proximate cause - The direct, real, or operative cause of loss or damage, as determined by applying common sense standards.

Rate - The cost of a given unit of insurance.

Ratings - are a discount off your comprehensive car insurance premium. The discount increases each year providing no claim that reduces your rating is made on your policy. It keeps on increasing until it reaches the maximum rating level, called 'rating one'.

Rating Protection (AAMI car insurance) - Until you reach AAMI Lifetime Rating One, you may be able to protect your rating level for one at-fault claim during the period of cover by paying an extra amount on your premium when you commence or renew your policy.

Refund of emergency costs (AAMI car insurance) - A benefit included under the AAMI Comprehensive Car Insurance Policy. If you're in trouble over 100 km from home, AAMI can help with the refund of emergency costs (within the limits of your AAMI policy).

Reinsurance - A position whereby one insurer transfers all or part of its risk of loss to another insurer. The other insurer is called the "reinsurer" or reinsurance company.

Renewal Certificate - A certificate which is used to renew a policy. It refers to the original policy, keeping all of its provisions, without restraining all of the insuring agreements, exclusions, and conditions.

Renewal Premium - The premium paid for a renewed policy.

Retaining Wall - Means a wall that supports or confines a mass of earth or water.

Risk - General meaning is a thing or person insured.

Risk management - Management of the risks to which a company might be exposed. It involves analysing all exposures to the possibility of loss and determining how to handle these exposures through such practices as avoidance, reducing the risk, retaining the risk, or transferring the risk e.g. see reinsurance.

SES - The State Emergency Service is an emergency and rescue service dedicated to assisting the community.

Salvage - Property taken over by an insurer to lower its loss.

Skilled Drivers course - A free one-day driving course designed to improve young drivers road skills. On completion they receive discounts on AAMI comprehensive insurance until they're 25 (available in Adelaide, Brisbane, Canberra, Hobart, Melbourne, and Sydney).

Site (AAMI home insurance) - Those parts of the land at the insured address which are used solely for domestic purposes but not 'common property' which is land or areas that others are entitled to use, for example common property in a strata development, retirement village or any other type of residential property development.

Standard Excess - See excess

Statute of Limitations - A law that specifies a time limit for which a person can bring a legal action for a claim.

Strata Title - A system of title that allows the owner of a unit, in a block of units, to have a separate title for that unit.

Storm - Means violent wind (including a cyclone or tornado), thunderstorm or a heavy fall of rain, snow or hail

Suncorp - The Suncorp Group is one of Australia's leaders in banking, insurance, investment and superannuation. The Group focuses on retail consumers and small to medium business. AAMI is a member of the Suncorp Group.

Term - Under insurance law it means the period of time for which a policy is issued.

Theft hire car (AAMI car insurance benefit) - Provides a hire car for up to 21 days if the insured car is stolen (subject to the terms and conditions described in the relevant AAMI car insurance policy).

Third Party Property Damage Insurance - Provides specified cover in respect of damage a vehicle causes to another person's property.

Total loss (AAMI Home Insurance) - A loss of sufficient size so that the property cannot be economically repaired or it can be said there is nothing left of value. The complete destruction of the property. The term is also used to mean a loss requiring the maximum amount a policy will pay. (For car see write off).

Underinsurance - A condition in which not enough insurance is held to cover the value of the insured property. This is particularly common with home contents insurance.

Underwriter - A technical person trained to evaluate risks and determine premium rates.

Unearned Premium - General meaning is the premium that is owed to the insured if the policy is cancelled

Uninsured motorist extension (AAMI third party property damage insurance) - The amount covered for the uninsured motorist extension is the current market value of your car up to $3,000.

Unoccupied (AAMI home insurance) - means not lived in by you or any other person with your consent.

Use ( AAMI car insurance) - means the private or business use of your car.

Private use: Use of your car for social, domestic and pleasure purposes, and commuting to/from work and incidental business use where you are not using your car during your full-time, part-time or casual working period as an integral means of earning an income.

Business use: Use of your car during your full-time, part-time or casual working period as an integral means of earning an income that you have told us about and we have agreed in writing to cover, and for social, domestic and pleasure purposes.

Private use and business use both cover the private use of your car in conjunction with repairing, servicing and demonstration for private sale provided you or a regular driver listed on your policy schedule are the driver or a passenger when the car is demonstrated.

VIN - Vehicle identification number

Valuation - Estimation of the value of an item, usually by appraisal eg. Jewellery appraisal.

Write-off (AAMI car insurance) - AAMI declares the insured car is declared a write-off when in our opinion, it is so badly damaged that it would not be either safe or economical to repair or if the policy covers theft, when it has not been found within 14 days of you reporting its theft to us and we are satisfied that the claim is in order.

Write - To underwrite, or to accept an application for insurance.

Written premiums - The total premiums on all policies written by an insurer during a specified period of time, regardless of what proportion has been earned. See earned premiums.

You/your - Generally refers to the named insured.