It is easy to get confused by jargon and vague terms when trying to understand
exactly what a policy entails and when reading through policy details. Below we
have listed some important terms used in insurance dealings.
| Buildings insurance |
a policy covering the structure of a
house or other construction against damage and other risks. See
More |
| Claim |
when a policyholder seeks payment or
compensation under the agreements of a policy. |
| Conditions |
certain rules that must be followed
in order to uphold the client's insurance agreement. Conditions might include
taking safety measures within the home or promising to keep the insurance company
informed at all times of any effectual developments. |
| Contents insurance |
an insurance policy protecting the contents
of a home against risks. See
More |
| Cover note |
a document that provides short-term
evidence of insurance cover before the policy and certificate have been issued.
(Not generally relevant to home insurance). |
| Excess |
this is the amount of money that you
agree to pay in the case of a claim before the insurance company will pay the
rest. |
| Exclusion |
a property, person or occurrence that
will not be covered by the insurance policy. |
| Index linking |
this is what some UK home insurance
companies do to keep the sum at which your house is insured up to date. By 'index
linking' insurers will automatically update your policy as the cost of building
materials fluctuates. |
| Insurance premium tax |
also referred to as IPT, insurance premium
tax is the tax imposed by the Government on almost all insurance products sold
in the UK excepting life insurance. |
| Legal expenses insurance |
this is usually taken out as an extended
form of cover and will protect you against any legal expenses you might incur
is, say, someone were to sue you. |
| Liability |
this term refers to your legal responsibility
to somebody for injury or damage caused by your person or something that you are
accountable for. |
| New for old |
this is a phrase used most frequently
in relation to contents insurance. It means that where an object is lost or destroyed
it will be replaced brand new by the insurance company regardless of wear and
tear. |
| No claims bonus |
this is a reduction in a renewal premium
awarded to policyholders with a claim-free record. |
| Pluvius insurance |
this is an infrequently used term but
it refers to cover protecting against damages caused by adverse weather. |
| Policy |
this is a document which details the
contract drawn up between the insurer and the policyholder. |
| Policyholder |
person to whom the insurer issues the
insurance policy. |
| Premium |
this is the amount of money that the
policyholder pays their insurance company in order to be protected by their policy. |
| Sum insured |
the amount for which property is insured
and, consequently, the highest amount that an insurance company will pay out in
the event of a claim. |
| Underinsurance |
this describes the case of a property
being insured for less than its proper cost of rebuilding where the maximum possible
loss will not be covered. |
| Warranty insurance |
this type of insurance will provide
protection for broken household appliances in need of repair. |
