Wednesday, 16 March 2016
Home insurance glossary - Insurance terms you need to know
Have you ever been confused when reading the terms of your home insurance policy, or uncertain of what cover you were taking out? Trying to make sense of all the options for home insurance, and understanding all of the terminology can be daunting. That’s why we’ve compiled this list of home insurance terms explained to help you when taking out a quote. Find out what common home insurance terms mean with the useful A-Z below.
Accidental damage cover
Often an add-on to protect against any loss or damage to your home or possessions caused by an accident.
Additional cover options or add-ons
Optional features, such as Home Emergency or Legal Expenses, which you can add to your home insurance policy at an additional cost.
A solicitor, firm of solicitors, barrister, or any other suitably qualified person appointed to act on your behalf.
Bodily injury includes death or disease.
The property and its decorations, and fixtures and fittings that you own or for which you are legally responsible and are within the premises named in the schedule.
Any administrative and non-manual work that you carry out at your property, which does not involve any visitors or employees unless agreed otherwise.
Computers, printers, fax machines, photocopiers and other equipment belonging to you and used in conjunction with your business at the property.
What the customer asks the insurance company to pay when there are problems caused by an event, such as an accident or storm.
Any other costs that are directly or indirectly caused by the event which led to your claim unless specifically stated in the policy.
A contractor carrying out repairs approved and authorised by the provider.
Cooling off period
The period of time a customer has to cancel a policy.
Cost of rebuild / Rebuild value
Buildings insurance covers the cost of rebuilding your property and outbuildings as it currently is. This is a different valuation than the market value of your home.
Costs and expenses
Legal and professional fees for which you are responsible, including fees the appointed representative acting for you has to pay in the pursuit or defence of legal proceedings.
The benefits available to you under each cover option.
An optional section of cover available under a policy.
Credit cards, charge cards, debit cards, bankers’ cards and cash dispenser cards.
Date of occurrence
The date of occurrence is the date of the event, which may lead to a claim (if there is more than one relevant event, the date of occurrence means the date of the first of these events).
A specified amount that has to be paid before an insurance company will pay a claim.
The sum of money collected from the tenant and held by you or your agent as an indemnity for losses arising from the tenant failing to perform his/her obligations as set out in the tenancy agreement. Usually, a minimum amount equal to one months’ rent is retained as a deposit.
Any person employed by you under a contract of service which is solely for private domestic duties.
The use of your property as your main residence including any incidental business activities.
A sudden unexpected event occurring during the period of insurance which, in the provider’s opinion, necessitates immediate remedial action to render the property safe, and avoid damage or further damage.
Work undertaken by a contractor to resolve the emergency by completing a temporary repair which will resolve the emergency but may need to be supplemented by a permanent repair.
A change in the terms and conditions of the policy.
Escape of water
The result of burst / leaking pipes or faults in a plumbing system.
The amount payable by you in the event of a claim as stated in the schedule. This will be the total of the standard policy excess and any additional excesses shown in your schedule.
The individual or organisation shown in the tenancy agreement that has provided a financial guarantee of the tenant’s performance of his obligations under the tenancy agreement.
The upward movement of the ground supporting the building.
Home Emergency Cover
Cover for when/if something happens in your home that needs to be dealt with urgently to avoid further damage, or would leave your home unsafe if not dealt with quickly. It typically covers events that leave you without heating, water or electricity.
Insurance Premium Tax (IPT)
A tax levied by the government on all general insurance premiums.
The owner or tenant and members of their family residing in the property.
Insurer(s) / they / their
The provider shown on your policy schedule.
Any firm that sells insurance but is not an insurance company themselves, including brokers, independent financial advisers, banks, and comparison websites.
An additional policyholder.
Downward movement of sloping ground.
When the customer stops paying premiums or a policy is not renewed.
Civil court, civil tribunal, or civil arbitration proceedings, which are subject to the jurisdiction of the courts.
Limit of indemnity
The maximum amount the insurer will pay in respect of emergency repairs to resolve the emergency, comprising call out, labour, parts and materials.
A person who works for insurance companies. They investigate the details of a claim, particularly larger claims. They look into whether the claim is valid, how much should be settled on the claim, and can also advise you on repairs.
Mains drainage to the boundaries of the property, water, electricity and gas within the property and the primary heating system or hot water where no alternative exists.
An important fact about you or your circumstances that would influence an insurer’s decision on whether to issue a policy. Non-disclosure of facts can result in your policy being cancelled or your claim being rejected.
Current legal tender, cheques, postal and money orders, postage stamps not forming part of a stamp collection, savings stamps and savings certificates, traveller’s cheques, premium bonds, luncheon vouchers and gift tokens all held for private or domestic purposes.
New for old
Any damaged or stolen items claimed for will be replaced with a brand new item, even if the item damaged or stolen was old.
A risk that may be outside the insurer's usual remit of acceptance and often refers to a modification made to your insured items.
Non standard construction
Any property which includes an element of construction that causes the property to require specialist cover.
A person or persons authorised by you to stay in the property overnight.
The occupier (not necessarily the property owner) has a duty of care to maintain the safety of other occupants of the property.
When a policyholder buys cover for more than the value of the items insured.
A peril is the cause of damage, the risk.
Period of insurance
12 months from inception or the period of time for which the insurer has agreed to provide this insurance as detailed on the policy schedule.
Clothing, baggage, sports equipment and other similar items normally carried about the person and all of which belong to you.
Brown or black rats, house or field mice, squirrels, wasp and hornet nests.
The written contract between you and the insurer, which comprises of a booklet, the statement of fact, the schedule and any endorsements/clauses. The policy is based on your answers to the insurer's questions when you applied for insurance.
The individual named in the schedule.
An outline of the cover provided under a policy, showing details of the policyholder and the kind of cover given.
The address which is named in the schedule.
The insurance premium is the amount you pay for your insurance, usually in an annual lump sum or by monthly instalments.
Primary heating system
The principal central heating and hot water system in the property including the boiler or warm air unit, programmer, room thermostat, pumps, hot water cylinder, and radiators.
The property, together with garage(s) and outbuildings, all used only for your domestic purposes or which is let to private tenants, at the address shown on the policy schedule.
The companies which offer additional cover, such as Legal Expenses and Home Emergency.
When insurers buy cover from other insurers to protect against large losses. For example, Flood Re.
The time at which the policyholder is invited to reinsure their property for a further year. Often, insurers will autorenew a policy to make sure that there is no lapse in cover.
The monthly amount payable by a tenant to you as set out in the tenancy agreement.
Washbasins, sinks, bidets, lavatory pans and cisterns, shower trays, shower screens, baths and bath panels.
The schedule is part of the policy and contains details of what you have chosen, and what the insurer(s) have agreed to insure.
Downward movement as a result of the soil being compressed by the weight of the buildings within ten years of construction.
Built of brick, stone or concrete and roofed with slates, tiles, asphalt, metal or concrete.
Statement of fact
A record of the information you provided when originally applying for insurance and any subsequent changes. All information is the basis on which your application has been accepted and the policy issued.
Downward movement of the ground beneath the buildings.
The particular amount of cover for the cover option as shown in the schedule or policy.
Agreement between you and your tenant in relation to the property.
The occupier of the property named in and who is a signatory of the tenancy agreement, their partner and all members of their family residing with them.
When the repair costs outweigh the item's value, and the property is 'written off'.
Trace and Access
To find (trace) and get to (access) a water or gas leak from a pipe in your home if you’ve no idea where it is coming from.
When you have not have put your sum insured at a high enough level to cover all the contents in your home or the full rebuild value of your home. If you are under-insured and make a claim, you won’t receive enough money to replace all your items or rebuild your home.
When a building’s foundations are strengthened or deepened to manage subsidence.
The process that insurers go through when assessing any new risk for insurance cover.
Without sufficient furniture and furnishings for normal living purposes for more than 30 consecutive days.
Not lived in by you, your tenant or a person authorised by you for more than 30 consecutive days.
Gold, silver, other precious metals, gold and silver plated articles, jewellery, furs, pictures.
We / us / our
The insurer. For example, Avantia Insurance Limited, trading as HomeProtect.
Wear and tear
The fall in value of the item or property due to damage over time.
You / your / insured
The policyholder and any immediate member of their family residing at the same address as the policyholder during the period of insurance.