We hope the following explanations of some commonly used insurance terms will help you to understand your policies and associated documents more easily:
The insurance policy booklet that fully explains the extent of cover available under the specific contract of insurance purchased. A current PDS will be provided upon inception of any new policy setting out the terms and conditions of the policy along with other important information. An updated PDS will be provided if the extent of cover under the policy varies in any way upon renewal. The PDS, along with the policy schedule, forms the contract of insurance.
The total amount you pay for your insurance policy including any applicable government taxes such as GST, and any other duties or charges payable by you. The premium is shown in your current schedule.
Your contribution (i.e. the amount you pay) when you make a claim on your policy. The excess types and amounts applicable to your policy are shown on your current schedule and in the policy PDS.
Covers damage, loss or destruction caused by an unintentional act, or an unforseen and uncontrollable incident (unless otherwise excluded/restricted under the applicable policy).
Only provides cover for losses caused by specific perils/risks as defined/listed in the applicable policy wording.
A single occurrence or a series of occurrences, including an accident or series of accidents arising out of the one event.
An act committed with intent and without your consent.
Provides cover as defined in the applicable policy wording for accidental loss or damage to your vehicle up to an agreed value or market value sum insured.
A set amount (total loss sum insured) agreed with the Insurer at the beginning of the insurance policy period.
The cost to replace your vehicle with a vehicle of the same make, model, age and condition as your vehicle immediately prior to the loss or damage.
When you enter into a Contract of Insurance you have a duty, under the Insurance Contracts Act 1984 to disclose every matter that you know, or could be reasonably expected to know, that is relevant to the decision by the Insurer as to whether or not to accept the insurance risk and on what terms. You have the same duty to disclose these matters before you renew or change the contract of insurance. However you are not required to disclose any matter –
- That diminishes the risk
- That is of common knowledge
- That the Insurance Company would know, or in the ordinary course of their business, should know
- Where the Insurance Company has notified in writing that such compliance is waived.
If you fail to comply with your duty of disclosure the Insurance Company may be entitled to reduce their liability under the contract in the event of a claim, or may cancel the contract. If the non disclosure is fraudulent, the insurance company may also have the option of voiding the contract from its inception.
