Glossary to Insurance words

Indemnity Putting
 the policy holder to the same financial position immediately before a loss by payment, repair or replacement.

Insurable interest 
A basic rule of insurance requiring the person buying insurance to have an insurable interest in the subject matter to be insured or life of the insured in that the loss or damage to the subject matter or any misfortune which occurs to the insured would result in a financial loss to the policy holder. In takaful, this requirement is called permissible takaful interest.

Material fact
 Any matter that is relevant to the decision of the insurance company/ takaful operator on whether to accept the risk concerned and the rates and terms to be applied.

Utmost good faith
A requirement on the person buying an insurance or takaful product to state all relevant details in the application form to the insurance company/ takaful operator to allow the insurance company/ takaful operator to consider his application fairly.