Insurance Terminology

• Insured / Policyholders ~ The person (or corporation) purchasing insurance.
• Insurer ~ A body or person authorised to sell insurance.
• Peril ~ A contingency or fortuitous happening which could losses. Cause of loss.
• Claim ~ A demand presented to the insurer, by policyholder or beneficiary, for the payment of the proceeds stated in the insurance policy.
• Underwriting ~ The process of reviewing applications for coverage. Applications that are accepted are then classified by the underwriter according to the type and degree of risk.
• Premium ~ The consideration an insured pays to the insurer for an insurance coverage of a specified nature for a specified policy period.
• Loading ~ A process used to determine insurance premium by adjusting the expected value of claim payments to provide an allowance for the cost of insurance-related services, uncertainty and profit.
• Risk ~ (a) A situation which cannot be controlled or perfectly foreseen. (b) The subject matter of an insurance contract.
• Loss ~ A claim either paid or payable due to the insurer's policy obligations.
• Insurance ~ A system for transferring the responsibility for paying for losses from one party to another.
• Insurable Risk ~ A Standard risk which an insurer is willing to insure at the standard rates.

Source : Oswald Timothy Edward & Yon Bahiah Wan Aris, "Fundamental of Insurance", UiTM, 2002.

The Concept of Takaful

Takaful in Arabics, means joint guarantee. Thus it can be visualised as a pact among a group of members or participants who agree to jointly guarantee among themselves against loss or damage that may inflict upon any of them as defined in the pact. Should any member or participant suffer a catastrophe or disaster he would receive a certain amount of money or financial benefit from a fund, as also defined in the pact, to help him meet the loss or damage.

In other word, the basic objective of Takaful is to pay for a define loss from a defined fund. Each member of the group pools effort to support the needy. It means mutual help among the group.


Source : Oswald Timothy Edward & Yon Bahiah Wan Aris, "Fundamental of Insurance", UiTM, 2002.

Definition of Insurance

Insurance is an agreement whereby a group of individuals facing similiar risks can share the fortuitous losses of the unlucky few by the transfer of such risks to the Insurer who agrees to compensate the losses.


Source : Oswald Timothy Edward & Yon Bahiah Wan Aris, "Fundamental of Insurance", UiTM, 2002.

Named Driver

Most of the Insured / Policyholder are not aware the benefit of the Named Driver. At the same time the insurance's agent also fail to provide advice to the Insured / Policyholder on the important to include the Named Driver into the Private Car Insurance Policy.

Do you know that the Second Named Driver can be included in the policy Free of Charge?

Yes, free of charge...

If you do not include the Named Driver, when you make a claim, the insurance company will impose the excess. Meaning that, the insurance company will not pay the loss in full. So, next time please remember to include the Named Driver.

You can also ask the agent to include additional 3rd, 4th ... Named Driver with additional charges of RM10 for one person.

No Claim Discount

What is No Claim Discount (NCD)?

"NCD" is mean No Claim Discount or also known as "NCB" which mean No Claim Bonus. NCD is a discount given to the Insurer / Policy Holder after completing one year insured period without any claim. The schedule of the NCD / NCB are as follows:

1. First Year 0%
2. Second Year 25%
3. Third Year 30%
4. Fourth Year 38.33%
5. Fifth Year 45%
6. Sixth Year onward 55%