Home insurance lingo

If you're worried about not understanding all the jargon used when talking about insurance, try boosting your confidence by getting to grips with some key phrases you may encounter.

ACCIDENTAL DAMAGE: Visible damage which has been caused suddenly and hasn't been caused on purpose or inevitably. Accidental damage is usually subject to a policy excess for each claim.

Find out more about our accidental damage cover.

ALTERNATIVE ACCOMMODATION: Suitable accommodation is provided by the insurer if you cannot live in your own home due to an insured event, such as a fire.

APPROVED SUPPLIER/TRADESMAN: A company or person who forms part of the claims network, they are appointed, approved and authorised by the insurer to provide you with replacement goods – e.g. a new television if yours is stolen or carry out repairs following an insured event.

APR: The Annual Percentage Rate, often referred to as APR is the annual cost of the credit to a consumer, expressed as a percentage of the total amount of credit paid monthly.

BUILDINGS INSURANCE: Buildings insurance covers the actual building and the cost of damage to this. This includes the roof, walls, ceilings, floors, doors and windows. Outdoor structures such as garages and fences are also included.

View information on our Buildings Insurance.

BUILDINGS SUM INSURED: Buildings sum insured is the amount it would cost to demolish, clear and rebuild your home following an insured event. It's not the same as your home's market value, which might be higher or lower.

CONTENTS INSURANCE: Covers the items in your home which are not fitted to the main structure of the building such as clothes, appliances, furniture, jewellery and other items of value.

View information on our Contents Insurance.

CONTENTS SUM INSURED: Contents sum insured is the maximum amount that the policy will pay out if your entire home contents are destroyed.

CURRENT MARKET VALUE: The current market value is the price that your property could achieve on the open market.

ESCAPE OF WATER: This refers to water escaping from fixed water tanks, pipes or apparatus (e.g. washing machine).

EXCESS: This is the initial amount you have to pay towards the overall cost of a successful claim. The excess amount is a pre-agreed sum of money with the insurer paying the remainder of the claim amount up to the policy limit. For example, if the value of your claim is deemed to be £600 and your excess is £100 - you will pay the first £100 and the insurer will pay the difference, in this example, £500.

EXCLUSIONS: These are things that your insurance won't cover. For example, anything that is the result of wear and tear.

FLOODPLAIN: This is an area of land next to a river, stream, lake, estuary or other water body that is subject to flooding. These areas, if left undisturbed, act to store excess floodwater. If you live on a floodplain, it might be more difficult to buy home insurance.

HIGH-RISK ITEM: Certain items of property are defined as 'high risk' by insurers and are handled differently from general contents. These tend to be valuable possessions like antiques, jewellery, works of art, cameras, etc.

HOME EMERGENCY COVER: Some home insurance policies will offer home emergency cover, this is generally an optional 'add-on' to the main product. Home emergency cover will typically provide 24-hour assistance and cover towards the cost of emergency repairs to your home that could cause further damage if not dealt with immediately, events that could make your home unsafe, or boiler issues which leave you without heating or water.

Find out more about our home emergency cover.

HOME INSURANCE NEW FOR OLD: This type of cover means you will receive a brand new 'like for like' replacement of your insured item in the event of a total loss claim.

INSURED EVENT: An event, that is described as being covered in your policy.

LEGAL EXPENSES COVER: is designed to cover legal costs incurred should you need to bring or defend a legal action against a third party following an incident such as personal injury, any infringement of your legal rights to own or occupy your property and probate disputes.

Find out more about our legal expenses cover.

NO CLAIMS DISCOUNT: A discount you get if you don’t make a claim on the policy during the year of insurance. This will usually increase each year that you don't make a claim up to a certain limit.

PERIOD OF COVER: The period for which you are insured, as detailed on the policy schedule.

PERSONAL POSSESSIONS: These are belongings such as cameras, glasses, jewellery, mobile phones, purses, tablets, wallets, and watches that you normally wear, use or carry during daily life. Some policies will cover these items when they are away from the home, or they may need to be specified separately within the policy.

Find out more about our personal possessions cover.

POLICY LIMITS: The maximum the insurer will pay out for any single event or item.

PREMIUM: The insurance premium is the amount you pay for your policy.

REBUILD VALUE: The cost to rebuild your home if it’s completely destroyed by an insured event such as a flood or fire. The rebuild cost is different from the market price and is usually found in the lender’s valuation.

RENEWAL: The point at which your insurer notifies you as a policyholder that your insurance is coming to an end. The insurer will provide the insurance price for the next year and invite you to insure with them again. Normally terms will be issued at least four weeks before your renewal date.

SINGLE ARTICLE LIMIT: The maximum you can claim on your content’s insurance for any one item that's damaged or stolen. If you have items such as art or jewellery, over this amount, you may need to specify these separately within the policy.

SUBSIDENCE: The downward movement of the ground beneath a building.

SUM INSURED: The maximum amount your policy will pay out.

TRACE AND ACCESS: Cover towards the cost of removing and replacing part of the building to find and repair the source of a leak, usually water but some policies also include gas leaks.

VOLUNTARY EXCESS: You may be able to specify a higher excess, known as a voluntary excess, which can lead to a reduction in your premium.

WEAR AND TEAR: The gradual deterioration of an item or property over time.

Having a good adviser can help make the complicated uncomplicated. Read this article on finding the right adviser for you

Article last updated: 28/03/2024

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