Insurance concepts

Publish date 13 March 2019
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Aggregate limit (limit for all events)

It usually refers to liability insurance and represents the total amount of coverage under the insurance contract for the term of the insurance, regardless of how many individual insurance events may occur.


Owner, user, holder or driver of a motor vehicle who, in connection with the possession or use, may cause damage to third parties.

Acquisition costs

Costs arising from the conclusion or renewal of insurance contracts. They can be direct (acquisition commissions) and indirect (advertising and administrative costs related to the preparation of tenders, the conclusion of contracts and the renewal of already concluded contracts).


Specialist trained in the theory and application of mathematics, statistics, economics, probability theory and finance, who is responsible for building the foundations of insurance and financial products, health insurance and pension schemes. His responsibilities are related to the correct and precise determination of the prices of the respective products, as well as the assessment of the necessary reserves that must be set aside to meet future obligations.

Acute disease

Illness with an acute onset and progressive nature, requiring urgent examination and treatment due to sudden pain and direct threat to the life of the insured.

Emergency dispatch

The emergency dispatcher is an authentic document issued by the dispatcher, given the general accident. It reflects the circumstances motivating the general accident; participating countries; the contribution capital and the contributions with their respective share; including the promulgation of the general emergency report, after which the respective dispatch is prepared and issued, which is sent to the interested parties.


A term in marine insurance that means all partial damage to the ship and cargo, including extraordinary expenses.


Assistance means additional services to the insurance, ie. providing assistance to the insured plaintiff for a smoother and more timely settlement of the insurance case.


Abandonment is known as a maritime term, which means that in case of “Constructive total loss” it is possible to “abandon” the insured property / ship and / or cargo / in favor of the insurer. Abandonment is a precondition for constructive total loss. In this loss the insured object is not destroyed, but the insured is deprived of the opportunity to own / use /, ie the probability of owning the insured object / ship / is minimal or the cost of restoring possession of the object would exceed its value. The insured offers "reasoned abandonment in favor of the insurer", who assumes the responsibility to avoid possible total loss.

Subscription insurance policy

The subscription insurance policy is that policy in which the insurer assumes automatic coverage of the risk for all objects of the insurance for an indefinite period of time under pre-agreed conditions between him and the insured.

Emergency dispatcher

The dispatcher is a specialist with high knowledge and experience in the field of marine insurance, law and act, given the general accident. It is governed by maritime trade law, the York-Anver rules and relevant customs and traditions. The dispatcher establishes the general accident Abandon - waiver by the insured of his rights over the insured property (vessel, cargo) in favor of the insurer, in order to receive from him the full sum insured. Abandonment is a precondition for a constructive total loss. In order for the insurer to be accepted by the insurer, the insured must prove to the insurer that the recognition of "Constructive total loss" is necessary.

Abandon's reverse

Officially certified certificate for transfer of the balance of the sum insured, which must be presented at the insurer's card at the request of the insurer.

Subscription insurance

A type of form (compensation system) that is used in the insurance of inventory, in which the preparation of an assessment is very difficult because their values ​​are constantly changing (in stock or on the road). In their work, insurance companies apply the so-called current subscription insurance or sliding (deductible) subscription insurance. When concluding a subscription insurance (with a subscription, general or flat rate policy) on the basis of observations in the past, the first assessment of the property is performed. On the basis of this assessment, an indicative sum insured is accepted. Undoubtedly, it will be inaccurate. It is even more difficult to determine the amount of compensation to be paid in the event of an insured event. At this point, there may be nothing in the company's warehouse or much more than was found in the first assessment. And a transport organization can have goods on the road, the value of which is hundreds of times greater or less than the previous day. As for the calculation of the insurance indemnity it is necessary to establish the sum insured, and it is not constant, there is insurance with a creeping sum insured. This is an option of real value insurance, as the compensation must always be equal to the actual value of the destroyed inventory. What is special is that the insurance premiums are not calculated depending on the actual value of the damaged property, but depending on the actual value of the property that was exposed to risk before its implementation. The indemnity does not always coincide with this sum insured, which was taken in the calculation of the premium.


A system that adjusts the amount of the insurance premium that the insured must pay to the insurer according to his individual history of damages he has caused. "Bonus" is a discount on the premium, which is made when renewing the policy, if the insured has not caused damage in the previous year. "Malus" is an increase in the premium that is made when renewing the policy, if the insured has caused damage in the previous year.

The storm

Atmospheric process characterized by wind speeds above 15 m / sec. Storm is also considered: hurricane, whirlwind, tornado. Damage is expressed in demolition, breakage, tearing, tearing, tearing, removal and other mechanical damage or destruction of property.

Gross premium

The Gross premium is the sum of the Pure Risk Premium, the Safety Loading, the Loading for Administrative Costs and the Profit Loading.

The gross premium may also be charged with Insurance Taxes, Installment Loading / Loss - making Insurance / and others depending on the specific circumstances of the given insurance.

Temporary incapacity for work

Seriously impaired ability to perform work, due to transient violation of the general or local functions of the body, recoverable within a certain period.


Vandalism is malicious actions of third parties, causing material damage to the insured.

Guarantee Fund

Legal entity with registered office in Sofia and subject of activity making payments of indemnities under the compulsory insurances “Civil liability” of the motorists and “Accident” of the passengers in the public transport. All insurers offering these insurances make contributions to the fund in an amount determined in accordance with the Insurance Code.


Precipitation of ice grains, accompanied in most cases by rain. Damage is expressed in breakage, crushing and other mechanical damage leading to wetting.

Third-party liability insurance

Liability of the insured for property and non-property damages caused by him to third parties.

Double insurance

Double insurance is the insurance of one object separately by two or more insurers. Double insurance is multiple insurance of one site, where the sum of the individual sums insured significantly or many times exceeds the insurance value of the site. Double insurance is usually an attempt at insurance fraud - unjustified benefit through insurance.


Tort is a term that means a violation of the law, a crime, an offense, a "tort".


The dispatch is a document issued by the dispatcher for the "general accident", observing the maritime legislation, customs, customs, York-Anver rules and the conditions of the bill of lading. It is published and has a statute of limitations.


The dispatcher is a highly qualified specialist in the field of maritime law, practice and customs. It specifies the general accident-presence, amounts of damages, damages and costs, and the basis for distribution / contribution capital / of the general accident, ie. he decides the general accident - establishes the share of each interested party in the intentional and appropriate damages, damages and expenses in order to save the common interest / ship, cargo, freight /.

Additional premium

The additional premium is the premium that is paid to the insurer at the beginning or during the insurance for increased liability or when working with a basic premium and it is agreed to adjust the premium at the end of the insurance year. The additional / supplementary / premium is also known as “Extra premium”.

Member country

A country that is a member of the European Union or another country that belongs to the European Economic Area.


Compromise payment of insurance indemnity made in good faith by the insurer.


Chemical reaction causing an explosion. The explosion causes breakage, crushing, distortion, tearing, burning or smoking of the insured property.

Life insurance

Insurance of the risk of occurrence of various events related to the life, health or physical integrity of the insured. A characteristic feature of life insurance is that in the event of an insured event, the insurer pays a pre-agreed amount. Another important feature of life insurance is that insurance contracts can be long-term (for example, for a period of 10, 15, 20, 25 and more years), and can also have a savings nature.


Illness is a set of complaints and clinical manifestations, diagnosed in a licensed health facility and registered in an official medical document, which cause temporary disability.


A natural or legal person whose property and / or non-property goods are the subject of an insurance contract.


Activity for providing insurance coverage of risks under a contract, expressed in raising and spending funds intended for the payment of benefits and other monetary amounts in the event of events or fulfillment of conditions provided for in a contract or law, as well as in direct related activities.


A legal entity registered within the meaning of the Commercial Law as a joint-stock company, or a mutual insurance cooperative within the meaning of the Cooperatives Act, which has received a license to perform insurance activity.

Insurance agent

A natural person or trader who, for remuneration on assignment by an insurer, performs insurance intermediation on his behalf and for his account.

Insurance broker

A commercial company or sole trader who, for remuneration on assignment by a consumer of insurance services, performs insurance intermediation and on assignment by an insurer or reinsurer performs reinsurance intermediation.

Insurance contract

A contract under which the insurer undertakes to assume a certain risk against payment of a premium and in the event of an insurance event to pay the insured or a third party beneficiary an insurance indemnity or a sum of money.

Insurance interest

Legally recognized need for protection against the consequences of an insured event.

Insurance portfolio

A set of valid insurance contracts under a given type of insurance or as a whole for a certain insurer.

Insurance pool

Association between insurers and / or reinsurers for mutual reciprocal co-insurance or reinsurance of the risks assumed by them under a certain type of insurance. Each of the members of the pool transfers (assigns) to the pool its responsibility and accordingly assumes a certain part of the total risk mass formed by the risks transferred by all members. Pools are formed to cover catastrophic risks (eg earthquake) or risks that accumulate (accumulate).

Insurance risk

Objectively existing probability of damage to property or non-property goods, the implementation of which is uncertain, unknown and regardless of the will of the insured person.

Insurance broker

Insurance broker or insurance agent who performs insurance mediation for a fee.

Insurance policy

Document certifying the contract concluded between the insurer and the insured.

Insurance bonus

Amount of money that the insured owes to the insurer (price of the insurance).

Insurance sum

An amount of money agreed or determined by a normative act and specified in an insurance contract, representing an upper limit of the insurer's liability to the insured, the beneficiary or the third injured party.


Occurrence of covered risk under insurance in the period of insurance coverage.


A natural or legal person who concludes the insurance contract with the insurer and pays the insurance premium under this contract. He can insure himself or third parties (for example, when an employer insures his employees, he is the insurer and the employees are the insured).


Vertical or horizontal wavy earthquakes caused by sudden natural displacements and fractures in the earth's crust or in deeper areas of the earth. The damage is expressed in cracking or destruction of buildings and facilities and the property located in them.

An accident

An event that occurred against the will of the insured, which as a result of sudden and unforeseen influences or causes of external origin has led to bodily injury or death of the insured.

Legal liability

The legal liability / Cake Liability / is the liability of the insured for culpably caused damages to a third party without the existence of a contract between them. It can still be defined as a violation of the law, giving the right to sue. The violation of the law is an action in violation of the law in the absence of a contract. For example, the culpable collision of a car with a third party.

Recorded gross premium

Written gross premium is a term that reflects the premiums payable by the insured throughout the insurance period. Given a given portfolio, the written premiums are the entire premium income that is payable by the insured during the business year. When the "recorded gross premiums" are reduced by the amount of "undue premiums", the so-called "Gross premiums".

Insured in personal insurance

Insured in personal insurance is the person who is insured for life and accident.

Insured in general / property / insurance

Insured in the general insurance is the person in whose favor the insurance contract has been concluded. With this type of insurance, the insured can be a natural or legal person.

Insurance supplement

Authentic document for change and an integral part of the issued insurance contract. The supplement is issued to expand and / or narrow the parameters of the contract or to correct the error. Depending on the change made in the insurance contract, the supplement is issued against an insurance premium or without an insurance premium.

Insurance interest

The insurance interest belongs to the owner of the property or to the person having real rights over it, as well as to those responsible for a given property or interest (for example, a carrier, a freight forwarder, etc.). The existence of an insurance interest determines the existence of the insurance.

Insurance policy

"Police" is a word or term of Italian origin. It attaches importance to a document of consent or promise, which is applied in trade and very widely in insurance.

The insurance policy is a document certifying the concluded contract between the insurer, which issues the contract, and the insured, who has an interest.

The registered policy, the bearer or promissory note policy may be endorsed without the consent of the insurer.

The rights under the insurance policy are proved by the insured through the presence of an insurance interest on the insured object.

The oldest insurance policies are considered to be those issued in Genoa in 1347 for a ship and in 1348 for a cargo.

Insurance portfolio

The insurance portfolio is a set of valid insurance contracts / policies / for a given type of insurance, branch of insurance or in general of one insurer. Usually an insurance portfolio is not terminated, and in circumstances that occur, it is ceded against redemption by another insurer.

Insurance pool

The insurance pool is an association between insurers and / or reinsurers for mutual reciprocal co-insurance or reinsurance of their liability / risks / for a given type of insurance or branch of insurance. Each of the members of the pool transfers / assigns / to the pool its responsibility / risks / and assumes a certain part of the total risk mass, formed by the risks transferred by all members. Pools are formed to cover catastrophic risks or risks that accumulate.

Navlo insurance

This is a marine insurance that covers freight-related damages when freight is at risk. In principle, the freight charge is paid at the destination when it is delivered to the consignee.

Insurance interest

The owner of the insured property has an insurance interest, including the interest from the resulting liability of this property to third parties.

Insurance certificate

The insurance certificate is a document that is issued to the insured as proof of the concluded / issued / insurance contract.

Insurance value

Insured Value is the determined value of a property for the purposes of insurance.

Insurance sum

Sum Insured or Sum Assured is the amount for which a property or interest is insured and which is the maximum limit for the insurer's liability.

Insurance certificate

The insurance certificate is a temporary insurance document issued by the insurance company, valid until the issuance of the insurance policy. It is issued when all the elements of the insurance contract for which an agreement has been reached are not yet known. The insurance certificate certifies the future conclusion of the original insurance contract, which is why it is also called a "temporary insurance certificate".


Exposure is the degree of exposure of an object or set of damage. This degree serves as a basis for calculating premiums. It characterizes the given set, given the probability of damage.

Institute cargo clauses

Institute Cargo Clauses (ICC) are the cargo clauses of the Institute of London Underwriters (ILU). They were constructed around 1870 and have been used by all insurers around the world for over 130 years. There are three main and standard cargo clauses - A, B and C. There are many insurance clauses developed by this institute.

Excluded risk

Events, the occurrence of which leads to the realization of the risk, but for which the Insurer has explicitly mentioned in the contract that it does not undertake the obligation to cover them.


The reverse of an explosion is the instantaneous and explosive filling of a volume in which the pressure is lower than atmospheric (vacuum). Damage to property is expressed in breaking, shattering, distortion and tearing.

Cover note

Cover Note is a temporary insurance evidence document for the conditions and the tariff rate / rates / at which an insurance / reinsurance / has been concluded / placed /. The cover note is always followed by the issuance of an insurance policy.


Cargo is an English word that means "cargo" and is a term in transport insurance and reinsurance.

Cargo plan

The cargo plan is a plan for loading the ship's cargo, which is also used for unloading cargo from the ship.


Casco is a term in transport insurance, ie. of cars, ships, planes and others. It means the hull of the vehicle itself - for example, a light car without a driver and passengers, a ship without a crew and passengers or cargo / cargo /, an aircraft without a crew and passengers or cargo. It is important to note that in order to take out Casco insurance / of the vehicle itself /, there is a presumption that the vehicle is in good condition, according to the legal requirements - for example the Law on Traffic on the Streets and Roads, the Commercial Code navigation and others.

In car insurance the German word "casco" is used - "Casco", while in marine and aviation insurance the English word "casco" - "Hull" is used.

Catastrophic event

Occurrence of a covered risk to which a large number of insured persons are simultaneously exposed and as a result of which significant damages have been caused (eg earthquake, flood, etc.)

Financial Supervision Commission

Specialized state body for regulation and supervision of the investment, insurance and insurance market in the Republic of Bulgaria

Damage quota

The Loss Ratio is the ratio between the "incurred damages" and the "earned premiums" in percentage for a given period - for example 5-7 years.

Cost quota

The Expense Ratio is the ratio of "administrative costs" to