Insurance Vocabulary Quiz
12 multiple-choice questions on insurance vocabulary: premiums, claims, underwriting, excess, indemnity, liability and the key roles in the insurance industry. B2–C1 level.
This quiz focuses on how the target vocabulary for Insurance is actually used in context at B2–C1 level, rather than testing bare definitions. Correct answers you will need to identify include terms such as The premium, excess, The underwriter, claim and actuary, each embedded in a full example sentence so you have to judge meaning from context, not just recognise an isolated word.
Working through all 12 questions and checking the explanations in the FAQ below is a quick way to spot any terms you are still unsure of. Revisiting the quiz again after a day or two, rather than only once, is one of the most reliable ways to move new vocabulary from passive recognition into words you can use confidently yourself in speaking and writing.
Keep building your insurance vocabulary.
Insurance Vocabulary — FAQ
What is the difference between a 'premium' and an 'excess'?
A premium is the amount you pay the insurer, usually monthly or annually, to keep your insurance policy active. An excess (called a 'deductible' in American English) is the fixed amount you must pay yourself towards a claim before the insurer pays the rest. For example, if your car repair costs £800 and your excess is £250, you pay £250 and the insurer pays £550. A higher excess usually means a lower premium.
What does an 'underwriter' do?
An underwriter is the person (or company) who assesses the risk of insuring something and decides whether to offer a policy, on what terms and at what premium. The verb 'to underwrite' means to accept and take on a risk in return for payment. Underwriters analyse information about the person or asset being insured to set a fair price for the level of risk involved.
What is a 'claim' in insurance?
A claim is a formal request you make to your insurer asking them to pay for a loss or damage covered by your policy. To 'make a claim' or 'file a claim' means to start this process. The person making the claim is the 'claimant', and the insurer will assess whether the claim is valid before deciding to 'settle' (pay) or 'reject' it.
What is the difference between a 'policyholder' and a 'beneficiary'?
A policyholder is the person who owns the insurance policy and is responsible for paying the premiums. A beneficiary is the person who receives the money (the payout) when a claim is paid — for example, in life insurance, the policyholder might be one person and the beneficiary their spouse or children. In many policies, the policyholder and the beneficiary are the same person.
What does 'indemnity' mean in insurance?
Indemnity is the core principle of insurance: it means restoring the insured person to the financial position they were in before the loss happened — no better and no worse. The aim is to compensate you for your actual loss, not to allow you to profit from it. An 'indemnity policy' protects you against a specified loss or liability by promising to cover the cost if it occurs.
What is 'liability' insurance?
Liability refers to a person's or company's legal responsibility for harm or damage they cause to others. Liability insurance covers the cost of compensation and legal fees if you are found responsible for injuring someone or damaging their property. Common types include public liability, employers' liability and professional indemnity insurance.
What does an 'actuary' do?
An actuary is a specialist who uses mathematics, statistics and probability to analyse risk and calculate the likely cost of future events, such as accidents, illness or death. Actuaries help insurance companies decide how much to charge in premiums and how much money to set aside to pay future claims. It is one of the most analytical roles in the insurance industry.
What is a 'policy' and what is 'coverage'?
A policy is the contract between you and the insurer that sets out exactly what is and is not insured. Coverage (or 'cover' in British English) refers to the protection the policy provides — the risks and losses it will pay out for. When something is 'covered', it means the policy will pay for it; an 'exclusion' is something specifically not covered by the policy.
What is the difference between 'comprehensive' and 'third-party' car insurance?
Third-party insurance covers damage or injury you cause to other people and their property, but not damage to your own vehicle. Comprehensive (often called 'fully comp') insurance covers both — damage to others and damage to your own car, even if the accident was your fault. 'Third-party, fire and theft' sits in between, adding cover for your car being stolen or damaged by fire.
What are common verbs used with insurance vocabulary?
Useful collocations include: to 'take out' a policy (to buy insurance), to 'renew' a policy (to extend it for another term), to 'make' or 'file' a claim, to 'settle' a claim (pay it), to 'be covered' for something, to 'insure' an item or person, and to 'underwrite' a risk. A 'no-claims bonus' is a discount you earn for not making any claims over time.