Jargon explained - L

Definition
When an insurance policy ends at its renewal date because the policyholder doesn't pay the renewal premium or where the customer decides not to renew.

Explanation
Used when talking about insurance policies.

Lapse means, in effect, cancellation at renewal date.

Definition
Legal responsibility for causing loss to someone else by injuring them or damaging their property.

Explanation
Used when talking about contracts – especially insurance contracts.

Definition
The person or organisation that a property has been leased to.

Explanation
Used when talking about leases.

Definition
The person or organisation that has leased a property to someone else.

Explanation
Used when talking about leases.

Definition
A responsibility to an individual or company, which may occur legally or contractually.

Explanation
Used when talking about responsibilities – either contractual or legal.

Definition
An insurer's maximum liability for a risk.

Explanation
Used when talking about insurance policies.

The other way to look at a limit is as the maximum amount that a policyholder will be able to claim for a risk.

Limits can be set in a number of ways, including limit per:

Limits must always be detailed in an insurance policy schedule. 

Definition
An agreement that gives a policyholder a discount on their premium in return for committing to renewing the insurance for a fixed number of years.

Explanation
Used when considering ways to bind a policyholder for longer than 12 months.

Long Term Agreements are usually set at three or five years. The longer the term, the greater the discount the insurer may choose to offer.