Glossary

The language of insurance can be quite complex and confusing. Below are some commonly used insurance terms and their meanings. Insurance professionals with whom you may come into contact should be prepared to explain these terms. If you don't understand, ask!

This information is for educational purposes only and should not be relied upon to form professional opinions on coverage issues.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

N

Named Insured*

The person in whose name the policy is issued (see Insured or Policyholder). Technically, he or she would be the first party to the contract, the second party being the insurance company that issues the policy.

Named Perils (or Basic) Insurance Policy*

Covers only those perils, such as fire and theft, that are specifically named in the insurance policy.

Natural Disaster

A disaster caused by the elements such as flood, earthquake, tornado, lightning, etc.

Negligence*

To fail to do what a reasonable and prudent person would do (or to do what such a person would not do); this can result in property damage, injury or death.

No-Fault*

This type of automobile insurance provides some compensation for personal injury and death arising out of a motor vehicle accident, with payments made regardless of who caused the loss. However, it does matter who caused the accident; if found to be at fault, a driver may experience an increase in future premiums.

Non-disclosure

A contract of insurance is based on utmost good faith. An applicant for insurance is required to disclose to the company all material facts which are necessary to underwrite a policy. If the applicant does not disclose all these facts, he/she is guilty of non disclosure and may risk having coverage voided from inception.

Non-feasance

The neglect or failure to do some act which ought to have been done.

Non-hazardous

A risk not involving the ordinary or average hazard of its class, or a risk free of the average hazards of all classes of risk.

Non-insurable Risk

A risk for which no insurance can be written. The chance of loss is very high or cannot be accurately measured.

Non owned Automobile Policy (Non-owner's Policy)*

A policy that gives you liability protection for when you are in at-fault accident and do not own a car.

Notice of Loss*

Notice detailing the losses and the circumstances surrounding how they occurred required by insurance companies immediately after an accident or other loss.

Notice of Termination

The conditions of insurance policies stipulate how a policy may be terminated during its term. For example, a policy may be terminated by the insured at any time or by the insurer who must give the insured a certain number of days' notice of termination by registered mail or a certain lesser number of days' written notice of termination personally delivered.

Nuisance

In law, this refers to a class of wrong that arises out of unreasonable, unwarranted or unlawful use by a person of his own property, whether that property be real or personal or from his own improper, indecent or unlawful personal conduct and producing an annoyance, inconvenience, discomfort or hurt to others or to their property that the law would presume a consequential damage. In insurance claims, it is most frequently met as a cause of action, arising from the escape of some obnoxious substance.

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