Terms

Last Updated on Thursday, 25 February 2010 11:45

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Premium:

This is the amount you pay each year to have your gear insured. Premiums can be paid annually, or by weekly, fortnightly or monthly installments.

Discount:

You can sometimes claim a discount for equipment that reduces the risk of damage or loss, such as burglar alarms. Other discounts may be available for people over a certain age and for having other policies (such as health and car insurance) with the same company. Most companies also reward you for being claim-free (no-claims discount).

Excess:

This is the initial amount that you agree to pay for a claim, and the company will pay out for everything over and above that amount (up to the policy limit). For example, if you have an excess of $300, you will pay the first $300 worth of any damage and the company will pay the rest.

Replacement Policy:

The insurance company will replace a lost or destroyed item with a new one or repair the item so it is ‘as new’. However, items over a certain age may not be replaced, and there is often an upper limit on what you can claim. This is specified in the insurance policy as the ‘sum insured’.

Indemnity Policy:

The insurance company will pay an amount based on the item’s age and condition immediately before it was stolen or damaged. It is usually equivalent to the amount you would pay for the item second-hand.