Betterment is best illustrated by example: Your video recorder, covered under your insurance policy, is destroyed in a fire.  A similar replacement video recorder would cost R2 000.  You prefer to upgrade to a video recorder, with more features or to  a better model,  to the value of R3 500. The R1 500 difference constitutes betterment and would be for your own account.

The portion of a claim that is not covered by the policy. It is used as an underwriting tool to minimise niggling, administratively-costly claims or to reduce a loss ratio, and to impose a duty-of-care on the insured. Excess may be Voluntary and/or Compulsory. For example: You have lost your watch to the value of R800 and the excess applicable is R200. The claim will be settled for the amount of R600. Or, a burst pipe results in damage of R375 and the excess applicable is R500. The full R375 would be for your own account because it falls within the excess of R500.

The principle of indemnity is the basis of most short-term insurance contracts. This principle states that after a loss has occurred, the insured shall as far as possible be placed in exactly the same financial position as he was before the loss occurred, subject to adequacy of sum insured and all policy conditions and requirements being fulfilled.

To have an insurable interest in an item a person must stand to suffer direct, measurable financial loss if the item were lost, damaged or destroyed. The person must stand to benefit from the continued, unharmed existence of the item, or be prejudiced by its damage or loss or liability, whichever may rise. For example: your video machine to the value of R2 000 has been stolen from your home. As the owner, you have suffered a measurable loss of R2 000 because you have a financial (insurable) interest in the video machine.

This is the maximum amount of indemnity provided by a policy. The limit of indemnity is determined by the sum insured and constitutes the insurer’s maximum liability in respect of any one event or series of events. The limit of indemnity is the amount upon which the premium is usually calculated.

Sometimes incorrectly known as a Claim Free Group (CFG), the No Claim Bonus (NCB) is a discount allowed off comprehensive motor premiums, and is used to 'reward' the insured for a period of claim-free driving. The difference between a CFG and a NCB is the system of allowing the discount. Whilst the CFG is expressed as a separate section of the tables, a NCB is usually a percentage discount allowed.

This occurs when the insured has not arranged adequate insurance cover for the financial value of the property insured. In the event of a claim the principle of 'average' would then be applied. This is an insurance principle, which deems that, if an item or property is underinsured, the insured must bear a rateable proportion of each and every loss.