Insurance terms can sometimes be difficult to understand. We’ve put together a clear list of the most important terms for you.
Exclusion
The insurer can contractually limit the risk covered by the insurance contract by excluding, for example, increased and undesirable risk circumstances. The implication is that the insurer is not obliged to provide benefits for excluded risk circumstances.
Example from our insurance terms: No insurance coverage exists for trips undertaken despite a travel warning issued by the Austrian Ministry of Foreign Affairs.
Coverage
Coverage refers to whether insurance protection exists and whether a benefit can be claimed under the insurance. A claim for insurance benefits exists if the premium has been paid and the corresponding risk is insured.
Limb Schedule
The limb schedule specifies the degree of disability to be considered in the event of complete loss or total functional incapacity of limbs and sensory organs under private accident insurance.
Disability
Disability is present when the insured person is permanently impaired in their physical or mental capacity due to an accident. The degree of disability is defined by the limb schedule.
Waiting Period
The waiting period agreed in the insurance contract before the insurer begins to provide benefits. During this time, either no benefits or only reduced benefits are provided by the insurer.
Example from Europäische Reiseversicherung: A 10-day waiting period applies for trip cancellation benefits if the insurance is taken out after the trip is booked.
Replacement Value Coverage
If replacement value coverage is included in the insurance, the current replacement value is reimbursed in case of damage or loss of insured items (e.g., luggage). Unlike depreciated value coverage, no deduction is made for age and wear.
Example from Europäische Reiseversicherung: In the (Annual) Complete+ Protection, (Annual) Travel+ Protection, and Luggage+ Protection, the replacement value is reimbursed for lost luggage during transport (except when the depreciated value of the items is less than 40% of the replacement price on the day of the damage → see explanation of depreciated value coverage).
Obligation
Obligation refers to the correct behavior of the insured person in the event of a claim to maintain insurance coverage (e.g., duty to report, inform, and mitigate damage).
Personal Liability
Personal liability refers to the obligation to pay compensation when property or personal damage is caused.
Risk
A possible event that causes damage when it occurs. Within the scope of insurance, certain risks are transferred to the insurer.
Example from Europäische Reiseversicherung: A travel insurance can cover risks before the trip (e.g., trip cancellation due to illness) and during the trip (e.g., loss/delay of luggage, costs for medical services & repatriation).
Risk Person
Risk persons are individuals who, in addition to the insured person, can also trigger an insurance claim.
Example from Europäische Reiseversicherung: For trip cancellation benefits, risk persons include the insured person, defined family members, and a certain number of fellow travelers also insured by Europäische.
Claim Notification
Submission of a claim to the insurer, including a claim form and supporting documents. After the claim is submitted, the documents are reviewed, and if the conditions for insurance coverage are met, the damage is reimbursed.
Deductible
The portion of the claim that is not reimbursed and must be borne by the insured person.
Insurer
The insurance company that provides benefits in the event of a claim.
Insured Person
The person covered under the insurance contract who is entitled to benefits in the event of a claim.
Insurance Claim
Events or risks for which insurance coverage exists when they occur.
Insurance Benefit
The benefit provided by the insurer after an insurance claim occurs.
Example from Europäische Reiseversicherung: The offered insurance benefits are diverse and include monetary compensation (e.g., reimbursement of cancellation costs) and services (e.g., organization and coverage of medical services abroad and repatriation).
Policyholder
The person who enters into the insurance contract with the insurer and is responsible for paying the premium. The policyholder is not necessarily the insured person.
Insurance Premium
The fee paid to the insurer in exchange for insurance coverage.
Insurance Coverage
Protection against certain risks obtained by taking out insurance. Whether and to what extent coverage exists is defined by the scope of the insurance contract:
- Material Scope:
Describes which risks are insured and to what extent.
Example from Europäische Reiseversicherung: The following risks can be covered by travel insurance: trip cancellation, trip interruption, delay protection, luggage, search and rescue, medical services abroad including repatriation, disability due to accident, travel personal liability, and assistance in case of detention or threat of detention abroad.
- Personal Scope:
Defines which individuals are insured.
Example from Europäische Reiseversicherung: Insurance coverage can be taken out for individuals (individual rate), families (family rate), or groups (group rate).
- Geographical Scope:
Specifies the countries for which the insurance contract is valid.
Example from Europäische Reiseversicherung: For travel insurance that provides coverage during the trip, the geographical scope can be chosen as Europe or Worldwide.
- Temporal Scope:
Indicates when the insurance coverage begins and ends.
Example from Europäische Reiseversicherung: Depending on travel frequency, insurance can be taken out for a single trip or for all trips within a year (= annual insurance).
Sum Insured
In the event of a claim, the costs incurred are reimbursed up to the amount of the damage. The stated sums insured represent the maximum benefit the insurer will provide for each claim.
Example from Europäische Reiseversicherung: Up to €1 million for medical services.
Insurance Contract
Agreement between the insurer and the policyholder, in which insurance coverage for the insured person(s) for specific risks is contractually regulated in exchange for payment of a fee (= insurance premium).
Depreciated Value Coverage
If depreciated value coverage is agreed upon, the current replacement value minus depreciation is reimbursed in case of damage or loss of insured items (e.g., luggage).
