These are payment for losses which clearly fall outside the scope of the Policy. Although the losses are not payable, the Insurers, to avoid hardship to the insured, consider, in very special cases, settlement of these claims. For example, due to a genuine oversight a certain item of property may not be included in the Policy or renewal although in the past to was covered. These payments are made as an “act of grace” and are justifiable on grounds of good business Policy. Such settlements are never made on the basis of the full loss. A certain percentage only is paid. These payments are made “without prejudice,” that is to say, Insurers do not have an obligation to make similar payments in future.

If the insured has committed a breach of condition or warranty, the claim becomes non-standard. In a strict legal sense, these claims are not payable. But Insurers do not wish to rely on technicalities. Hence, settlement of these claims is considered subject to certain rules and regulations framed by Insurers. Usually. an extra premium is charged, the Policy rectified and payment made, depending upon the nature of the breach.

These are claims which fall clearly within the scope of the Policy. Settlement of these claims presents no difficulty.

A clause outlining the process of submitting and administrating claims.

The ratio of paid or incurred claims to earned premiums over a defined period. Alternatively it may be the ratio of paid or incurred claims on business written in an underwriting period to the written premiums for that period. It may be either net or gross of reinsurance. Also, often called the loss ratio.

A report compiled by an agent detailing the specifics of a claim.
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A report filed by a person setting forth the facts of a claim.