UK Home Insurance definitions


It is very important that you know what the insurance policy means that you have paid for. Looking through your policy, you can get rather confused by the vague terms and jargon within them. Here is a list of some important terms that are prevalent in insurance, along with there definitions.

· Buildings Insurance - this covers the structure, fittings and fixtures of a home against a variety of risks.
· Contents Insurance - this covers the personal possessions in a home (objects that would be taken away if you moved) against a variety of risks.
· Pluvius Insurance - very infrequently used term referring to insurance that protects you against damages caused by bad weather.
· Warranty Insurance - provides insurance for household appliances so you can be covered for the cost of repairs.
· Policy - the contract between the policyholder and the insurer.
· Policyholder - the person to whom the insurance policy is issued by the insurer
· Premium - the policyholder pays this amount to their insurance company to be protected by a policy
· Insurance Premium Tax (IPT) - a tax on every insurance product barring life insurance, imposed by the government
· Legal Expense Insurance - an extended form of cover to protect you against legal expenses if you need to sue someone or someone is suing you.
· Conditions - To uphold the policyholder's agreement, certain rules need to be followed. These could include safety measures or keeping the insurance company aware of any developments that affect them.
· Underinsurance - when a property is insured for less than the full cost of rebuilding. The maximum possible loss would not be covered if this occurs.
· Liability - Your legal responsibility for injury to somebody or damage caused by someone or something you are accountable for.
· Cover Note - Before the policy certificate has been issued, this provides short-term evidence of insurance cover.
· New for Old - when an object is destroyed or lost it would be replaced by the insurance company brand new, regardless of wear and tear.
· Sum Insured - the highest amount a property will pay out for a claim.
· Claim - a policyholder asks for compensation or payment under a policy
· No claims bonus - a reduction in a renewal premium if a policyholder has a record free of claims.
· Excess - The amount of money you agree to pay of a claim, with the insurance company paying the rest. The higher this is, the lower your premiums should be.
· Index Linking - insurers automatically update your policy as the cost of rebuilding increases. This keeps your sum insured up to date with inflation.
· Exclusion - a person, property or occurrence not covered by an insurance policy

 

 

 

 

 

 

 

 

© AskFinancially.com 2008

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