Product Disclosure Statement (PDS) - Simplifying technical terms

Product Disclosure Statement (PDS) is a document that sets out the terms and conditions to which you are insured under. It includes limits to cover provided, how to make a claim, and complaints resolution processes. Take the time to read this document carefully to avoid the potential for unpleasant surprises at claim time. Given the vast array of different insurance products available, it is important to be as clear as possible on what is actually being offered when making the decision to purchase or renew your policy. The following terms may be found within a PDS:

But what does it all mean?

Agreed value
Agreed value means the amount you and your insurer agree to cover the value of your vehicle at the time the policy is purchased. In the event of an accident or disaster which results in total loss, an insured receives the agreed value of their vehicle.

Comprehensive
Comprehensive cover offers the highest level of protection for motor vehicles, caravans and motorhomes.

Duty of disclosure
Is the consumers’ duty to disclose all information which could be known by a reasonable person to be relevant to the insurer.

Excess
The amount the insured contributes towards their claim, and forms part of the insurance contract. Most types of general insurance come with an excess.

General insurance
Includes motor vehicle, building and contents and travel insurance policies.

Liability
Your legal responsibility for something, particularly costs and damages.

Market value
Market Value means the amount the insurer calculates the market would pay for your car, caravan or motorhome in your local area. It takes into account the age, make, model, kilometers travelled and condition of your car, caravan or motorhome.

Nominated driver(s)
In the case of motor vehicle insurance, the insurer will require the details of any other persons who will be regularly driving the insured vehicle. Some insurers, such as Apia, do not require this information.

Risk
Risk is used in insurance in many senses, usually as the subject matter of insurance, uncertainty as to the outcome of an event, the probability of loss and the hazard or peril insured against.

Sum insured
This is the amount you agree to insure your property for, and the total amount of liability of an insurer under a contract of insurance or the amount payable on the occurrence of an event insured against under a benefit policy.

Third party, fire & theft
Cover will be provided for loss or damage to your car caused by fire, lightning, explosion or theft and for your legal liability for accidental damage to someone else’s property arising out of the use of your car.

Third party property damage
Provides cover for your legal liability for accidental damage to someone else’s property arising out of the use of your car.

Underwriter
The underwriter is the person or institution that agrees to take on a proportion of the risk of something.