ADJUSTMENT EXPENSES: The expenses an insurance company incurs in its investigation to determine the amount or value of the damages that may exist in a calamity.

ADJUSTER: Independent from the insurance company and the insured, accredited by the Superintendence of Banks, designated to determine the cause of the accident and if the policy covers or does not cover the specific event, determine the amount of loss, and make the loss settlement so the insurance company can pay the claim if it is found to be protected.

AGGRAVATION OF RISK: The modification or alteration of a use different from that indicated in the insurance policy, increasing the possibility of an accident or danger in an event; affects a definite risk.

AGREED VALUE: The amount of money the insurer is obligated to pay, even when the commercial value of the insured property is different.

APPLICATION: The form the insurer uses so the person who requests insurance can provide information regarding the property or person to be insured and the cost of the premium can be determined.

ASSAULT: Natural or legal action against a person with the purpose of obtaining his/her possessions.

ASSETS: Any natural or legal property a person possesses.

BENEFICIARY: A natural person or legal entity that receives the benefits of the contracted policy.

BOND: An agreement or contract signed by three parties in which the party called the Issuer (insurance company) guarantees the creditor of an obligation (Beneficiary, Insured, Contracting Party) that his/her debtor (Contractor, Guarantor) will comply as foreseen in the contract.

CALAMITY: The event or act foreseen in the contract whose occurrence brings about the obligation to indemnify the insured.

CANCELATION: The rescission of the effects of a policy foreseen in the insurance contract by either a unilateral decision or by mutual agreement.

THIRD PARTY LIABILITY: The obligation or commitment that physical or moral persons have to replace the property of another person when found responsible for the damage or impairment of the property of others.

CLAIM: The notification or communication the insured gives to the insurer, informing him/her that there has been a calamity. Also, the percentage between the paid premium and the calamity paid by the insurer.

CLAUSES: he conditions that establish the insurer and the insured and that appear in the insurance contract also called the policy. They also contain special conditions or items that modify or clarify the general conditions.

COINSURANCE: A form of dispersing the risk with three alternatives: accident coinsurance, coinsurance agreement and agreed coinsurance.

CONSENT: The agreement that exists between the insured and the insurer that is determined in the policy.

CONTRACTOR: The natural person or legal entity that pays the insurance premium. Sometimes this is also the insured person.

COVERAGES: Protection that the insurance company grants in the policy and that is generally established in the clauses of the insurance contract called the policy.

DAMAGE: Any personal or material loss suffered by a natural person or legal entity in his/its life or patrimony.

DAMAGE TO THIRD PARTIES: The loss suffered by a person or to a property of other persons who are not the insured’s family members or dependents.

DEDUCTIBLE: The participation the insured has in each calamity. It is used technically in order to eliminate small losses that do not place the insured party’s patrimony at risk. The objective is to lower the insurance cost, and for that reason it is also known as “indirect insurance cost.”

DEPENDENT: A person who depends economically and legally on a policy holder who can be held responsible for this person.

DURATION: The period during which the insurance company promises to protect or cover a possession or a person by means of the payment of a premium.

ENDORSEMENT: A contractual document added to a policy that may increase or decrease the amount of the premium or may clarify one of the clauses in the insurance contract.

EXPIRATION, MATURITY: The date on which the insurance contract or policy is terminated. It terminates at 12 o’clock midnight and there is no extension.

FEE: The percentage price or fixed amount set for a risk based on the claim and the experience the insurer has.

FPA: "Free from Particular Average": Coverage for the line of transportation that only covers the losses of merchandise caused by damage during transportation -for example, an airplane crash or the sinking of a ship.

FRAUD: A deceitful action or maneuver intended to deceive others.

GUARANTEED PERSON: A person (contractor) who is granted the guarantees.

INCLUSION CERTIFICATE: The document that proves the existence of a collective insurance policy in which identifying information should appear such as the insured sum, the enforced period, the personal information of the insured person, the beneficiaries, etc.

INSURABLE: Any person or property that meets predetermined characteristics in order to be considered for insurance coverage.

INSURABLE INTEREST: The economic, legal and substantial interest of the person who wants to contract a policy in order to cover a risk. This is the reason for the contract.

INSURANCE: The contract in which, by paying a premium, the insurer promises to indemnify a possible event contemplated in the policy.

INSURANCE AGENT: A natural person or legal entity whose activity has been authorized in order to sell insurance and advise prospective buyers or insured persons in regard to the most convenient plans for them when they buy insurance.

INSURANCE BROKER: A natural person or legal entity having credentials granted by the Superintendence of Banks that is in charge of and has the responsibility for advising an Insured person when contracting insurance policies, in negotiating accidents and maintaining policies. The Broker is the intermediary between the Insured and the Insurer.

INSURANCE CONTRACT: A willing agreement between two parties. It is also usually called the insurance policy. By means of the insurance policy, the insurance company agrees, upon payment of a sum called the premium, to grant an indemnization or a reimbursement to the insured if there should be a calamity.

INSURED: A natural person or legal entity that by paying an insurance premium obtains a consideration reflected in the insurance contract. A natural person or a legal entity that transfers one or more risks to the insurance company.

INSURED SUM: The amount set by the insured on his/her person or properties that is determining in order for the insurer to collect the premium or make an indemnization in the case of a calamity.

INSURER: A legal entity duly approved by the Superintendence of Banks that is technically and financially structured to be able to assume risks in exchange for a premium.

THEFT: The term used in insurance for the mysterious disappearance of possessions as the result of their being taken away by strangers in undetermined circumstances without leaving traces of violence.

LINE: Term used to determine the type or class of insurance. There are several lines: life, damage, accident and sickness, auto, civil liability, etc.

MAXIMUM LIABILITY SUM: Applicable in policies that have several addresses and to one that has a greater concentration of insured value in comparison with the other addresses, which is the one that determines the maximum liable amount.

NEGLIGENCE: Blame because of carelessness, omission and lack of diligence. Failure to take necessary precautions, involving either extraordinary acts or daily experiences.

NET PREMIUM: The amount the insurance company charges to cover a determined risk.

NON-INSURABLE RISKS: Risks not included in the general coverage provided by the insurance companies.

PATRIMONY: A group of possessions, rights and obligations susceptible to quantitative appraisal.

POLICY: The written valid evidence between the insured and the insurer. It is also called the insurance contract.

POLICY RIGHT: The amount the insured pays for the expenses of expediting a policy. It is also known as a fixed charge.

PREMIUM: The amount determined by the insurance company as the consideration or payment for the protection provided under the terms of the insurance contract or policy.

QUOTATION: The estimate or cost of the insurance premium the insurer offers the insured.

RATE: The amount the insurer determines based on experience with claims.

REAL VALUE: The commercial price or value of the insured’s property.

REINSURANCE: An operation carried out by an insurance company when it transfers part or all of the risk it assumes or contracts to another company. This operation generally occurs in large or very dangerous businesses.

REINSURER: A company that accepts contracting a risk another insurance company has accepted and expedited. In Mexico, the competent authority must authorize reinsurance operations.

RENEWAL: The process carried out between the insured, the insurer and the insurance agent in order to prepare a new policy for a determined period. The renewal can modify, increase or decrease the clauses or the insured amount of the expired policy.

REPLACEMENT VALUE: The amount of money it costs to repair the insured’s property. This is not the same as the invoice value.

RESCISSION: The ending of a contract prior to the foreseen date.

RESTITUTION: The part the insurer receives from a third party after having paid for a calamity.

PERIL: The possibility that a person or insured property suffer a calamity foreseen in the conditions of the policy.

RISK EXCLUSIONS: Those concepts or risks that the insurer does not expressly cover in a policy.

ROBBERY: An offence committed against private property taken with or without violence when the offender takes what does not belong to him/her.

SALVAGE: The restitution the insurer obtains in a calamity.

SPECIFIC CONDITIONS: Coverage or conditions that are contracted for each policy if the insured party requires them to prevail over the general conditions.

SUBROGATION: The rights that the insured has over a third party in the case of a calamity are transferred to the insurance company up to the credited amount of the indemnization. The insured party is responsible for any act that can affect the insurer’s right.

TOTAL PREMIUM: The amount of the net premium including the policy rights or expediting expenses, the charge for installment payments if such is the case, and the corresponding tax.
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