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Partners of The Policy Shop
AXA
Aviva
Zurich
Ageas
Equity RedstarJargon Buster (Household Insurance)
At The Policy Shop, we understand that some insurance terms can be confusing. That’s why we’ve created this insurance jargon buster that explains what some of the most confusing terms mean:
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A
Accidental Damage
Damage caused as a direct result of a single unexpected event.
Accidental Damage Cover
Worth checking as some items within the home are covered for this as standard, Notably Home entertainment equipment on contents cover, and Sanitary ware on Buildings. However extended accidental damage is available to cover items such as carpets and soft furnishings on contents and damage to internal ceilings on buildings cover.
Accidental Damage Excess
Excess specifically relating to accidental damage claims
Act of God
An Act of God is an event that is not the fault of any person, for example, when lightning strikes and causes damage. Acts of God may or may not be insurable (you’ll need to check your policy documents or with your insurer).
All Risks Cover
This term relates to an extension to your policy which ensures items are covered away from Home. This extension can be either for specified or unspecified personal possessions. Typically an item with a value over £1000 should be specified. Unspecified cover would be limited to around £3000 and be made up of items of such as Jewellery, Cameras and other personal possessions.
All Sections Excess
An excess that applies to all sections of your policy, in effect any claim.
Annual Premium
Your annual premium is the price of your Household insurance for the year. It will include Insurance Premium Tax.
B
Buildings
Your Home, and all outbuildings on the same site used for domestic purposes. This would normally also include central heating Oil tanks, Patios, Drives, Fences and Gates although full definitions will be given in your policy document.
Buildings Cover
Standalone cover for Buildings
Broker
Some insurance companies sell their products through intermediaries or brokers. A broker has access to a number of insurance companies and can give you insurance quotes from a variety of those insurers on various classes of general Insurance including Car, Motorcycle, Vans and Commercial Vehicles and Household.
C
Cash or Carry
Our reward scheme for recommending your friends and family.
Claim
This describes the process where you notify your insurance company of an event, such as an accident or theft/ attempted theft, where you wish to claim against your insurance policy. A claim may also be made against your policy by a third party, such as member of the public.
Claim Free Years
This relates to the number of years you have been insured without claim under a Household policy. You will receive a discount for the years you have been claim free, however there is not a step back process as with Motor products, as following 1 incident you have zero claim free years, and revert to no discount.
Compliance
All authorised insurance companies must comply with Financial Services Authority (FSA) regulations. This means they are bound by certain rules and principles, which are in place to protect consumers and ensure they are treated fairly.
The Policy Shop is authorised and regulated by the FSA.Compulsory Excess
A compulsory excess is the amount of any claim that you are required to pay yourself, and any payment from a claim will be reduced by this amount.
Contents
Household goods such as personal belongings, clothing and other items which belong to you, and are kept within your home.
Combined Cover
A Term used when you have your Buildings and Contents covered under the same policy.
D
Duty of Disclosure
If you make any changes that affect your insurance policy then you need to let us know straight away. These can include things like changing your car or changing your address.
E
Emergency Home Assistance
Additional cover to cover costs in relation to sudden failure of domestic Heating systems or toilet unit.
Endorsement
This is a written amendment on an insurance schedule. It becomes a legal part of the policy.
Escape of Water Excess
An excess that applies specifically when damage arises following escape of water.
Excess
This is the amount of money you have to pay towards the cost of any claim you make. With Home Insurance there are varying excesses such as all sections excess, Accidental Damage Excess, Escape of Water excess or Subsidence Excess. Consult your schedule for full details.
F
Family Legal Protection
An add on product which provides assistance with Legal disputes for you and your family.
Financial Ombudsman Service
This is an independent service that settles disputes between businesses that provide financial services, including insurance companies, and their customers:
Financial Ombudsman Service
South Quay Plaza 2
183 Marsh Wall
London E14 9SR
Telephone: 0845 080 1800
www.financial-ombudsman.org.ukFinancial Services Authority (FSA)
The UK’s financial watchdog, the FSA regulates financial services companies, including insurance companies. You can contact the FSA to find out the facts about financial products and services, helping you make an informed decision or you can contact the FSA for advice if you need to make a complaint against an insurance company:
The Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS
www.fsa.gov.uk
The Policy Shop is authorised and regulated by the FSA.Financial Services Compensation Scheme (FSCS)
The FSCS is an independent body and they are the UK’s compensation fund of last resort for customers of authorised financial services companies, including authorised insurance companies.
This means that the FSCS will compensate you if you have a claim that your insurance company can’t pay. The service is free to customers.
Further information about compensation scheme arrangements is available from the FSCS on 0207 8927300 or by visiting http://fscs.org.ukFLEA cover
Fire, Lightning, Explosion and Earthquake cover, a very basic form of insurance for unoccupied properties.
G
Good State of Repair
You will be asked if your property is in this condition at inception. For cover to be available it is important to confirm that your property is in this condition, and will be maintained as such.
H
Home Contents
Household goods such as personal belongings, clothing and other items which belong to you, and are kept within your home.
Household Insurance
Buildings or Contents as stand alone policy or Buildings and Contents combined are all forms of household insurance.
I
Indemnity
Under the terms of your insurance (depending on your cover) if you lose or damage something then an ‘indemnity’ will restore you to the same financial position after the loss/damage as immediately before it took place; in other words it’ll compensate you.
Indemnity Cover
Replacement to the value of damaged goods. For example should a 5 year old Television be damaged, payments would be based on the value of the Television. (We do not provided cover on this basis, see New for Old cover)
Index Linking
It is important that the sum insured in relation to your building costs are kept up to date. Many Insurers help by altering your sum insured to keep pace with building costs at renewal. This is called Index Linking.
Insurable Interest
One of the key things about insurance is that you can only take out cover if you stand to suffer a financial loss from an event covered by the insurance policy. In other words you must have an insurable interest to take out a policy.
Insurance Premium Tax
A UK government tax on most non-life insurance premiums, including home insurance. This tax is included in your premium.
Insured
The person(s) covered by an insurance policy.
Insured Incident / Event
An incident that is covered by your insurance, something that happens that can give rise to a claim.
J
Joint Proposal
Where two adults reside at the same address both names should be noted on the policy. This is referred to by Insurers, as a joint proposal.
K
Keycare
An optional add on product providing cover for loss of keys.
L
Liability
Liability means you’re legally responsible for causing loss to someone either because you’ve injured them, or because you’ve damaged something that belongs to them.
Loss Adjustor
Someone who investigates the legitimacy of claims.
Loss Assessor
A person employed by an insurance company to work out if the risk to be undertaken is acceptable. They also calculate the premium to be charged, based on the level of risk involved.
M
Material Fact
Any information that may influence either an insurer’s decision to offer you cover or the premium they charge for it. It’s important that you tell your insurer all relevant facts, because if you leave out information that may influence the decision to give you cover, your policy may not be valid and you may be treated as uninsured.
N
Non Specified Items
Typically found in the all risks section of the policy. Here you could have a certain amount of cover (say £2000) for personal possessions away from the home which are not individually specified.
New for Old Cover
All Insurance policies we provide issue cover on this basis. Simply put should your old Television be damaged, it would be replaced with a brand new one.
O
Optional Extras
Optional extras are either extensions of cover already included in the insurance quote or a completely separate standalone products from the quote provided. Home Emergency Protection is an example of an optional extra for home insurance, as is Family Legal Protection. Always check with your advisor what cover you’re being offered so you can request optional extras if needed (in some cases, optional extras may be included as standard).
P
Period of Cover
Period of cover or Period of Insurance is the duration of your insurance policy. This is the period between the start date and the renewal date, usually 12 months for car insurance. The start date, or effective date, is shown in your schedule, as well as the expiry, or renewal date.
Personal Possessions
Personal possessions, also called personal effects or personal belongings, are items worn or carried on you, such as clothing or luggage
Policy
A policy details the contract between the Insurance Company and the Policyholder.
With The Policy Shop your policy is made up of:- Your Policy Booklet
- Your Schedule
You need to read all of the policy documents as a whole to understand the cover you’ve bought, together with any restrictions or exclusions that may apply.
Policy Booklet
A Policy Booklet contains all the details of your Policy.
Policyholder
The policyholder is the person who the insurer issues the policy to.
Policy Shop Premier
Our benefit laden household product which includes Emergency Home Assistance, and Family Legal Protection as standard.
Price Comparison Website
A Price Comparison Website (also known as an aggregator) is an insurance system that captures and displays quotations from many insurance providers in one process. This allows you to compare prices at a glance. There are a number of websites that offer this service.
Premium
A premium is the money you have to pay in return for insurance cover. Your premium includes Insurance Premium Tax (IPT).
Proposal Form
This is an application for insurance cover, it contains all of the proposer’s details which should be checked for accuracy, before the proposer signs and returns it. The premium is based on the details contained within the proposal.
Proposer
This is the person who applies to take out home insurance.
Pro Rata Rates
Sometimes if you cancel your policy before it has expired, you’ll only be charged for the time you were covered by the insurer and not for the full term of the policy, though a cancellation fee may be applied which will reduce any refund you may receive.
Public Liability
Public Liability covers legal liability for injury or damage caused to others.
Q
Quote
This is process of obtaining a price from an insurer and the amount an insurer intends to charge you for the stated period of time based on the information you’ve given, in addition to any other stated assumptions.
R
Rating Factors
Rating factors are used by Underwriters to work out the price you pay for your Home insurance. They use claims experience to determine the effect a factor, such as age or gender, will have on the likelihood of you making a claim. The higher the likelihood of you making a claim, the higher your premium.
Rebuilding Costs
The figure on which your buildings insurance is based. The cost of rebuilding the property will not be the same as the market value. Surveyors and insurers have some rules of thumb to help you work out what your property is actually worth – but to be absolutely sure you should get a surveyor’s report.
Renewal Date
This is the date your Insurance Policy expires, which means it’s the end of your Period of Cover.
Renewal Notice
This is to let you know that your policy is due to expire and to give you sufficient notice to renew your policy.
Risk
All car insurance in the UK is offered by assessing a proposer’s risk. Insurers do this by looking at the details provided and determining how likely the driver is to make a claim, and how much such a claim would cost to settle. This is usually worked out by an Underwriter, in conjunction with actuarial tables. They use their knowledge of claims to calculate the level of risk and to decide what premium you should pay.
Risk Factors
Many factors affect the price you pay for your car insurance. Each of these has a different level of risk for an insurance company. If you’re considered high risk, meaning you’re more likely to make a claim or that claim would be costly to pay, then you’ll pay more for your insurance cover. Risk factors include among other things like age, gender, your vehicle and the number of miles you drive each year.
S
Schedule
Your Schedule is issue with your Policy booklet, it is important because it will personalise your policy and advise which particular sections of the policy apply to you. There is not normally a certificate of Insurance issued with Household Insurance, so the schedule will also state important information in relation to your cover.
Settlement
This is the amount you are paid for a Claim. Settlement happens when an insurer pays a claim and the claim is effectively closed. The Settlement will usually be the amount agreed, less any Excesses.
Single Article Limit (SAL)
A Limit placed on a value under a section of the policy. Items over this value need to be disclosed so that an appropriate rate can be calculated and so that adequate cover can be provided.
Specified Items
Items which are specifically named either within your contents sum insured or all risks section. Normally these would be valued in excess of £1500
Statement of Fact (SOF)
A modernised proposal form used by some insurers. The main difference being that you do not have to sign and return this document although it is the consideration of the contract with your Insurer in the same way a proposal is. If you receive a SOF you should still check it to ensure the details are correct, and contact us with any areas that need amendment.
Subrogation
This is the substitution of one claim for another, for example an insurer who has indemnified a policyholder can take over any legal rights the policyholder may have had in respect of that particular claim.
Subsidence Excess
An excess applied specifically in relation to claims arising from subsidence. This is typically £1000 although will be made clear in your policy booklet.
Sum Insured
The amount for which you are covered under either the buildings, contents, or all risks section of your policy.
T
Third Party
A person involved in a claim, but who isn’t the Policyholder or the Insurance Company.
U
Under Insurance
Should the value of your property or contents not reflect the true value this is termed “Under Insurance” typically your policy would only provide limited cover along the same level as that of the under insurance I.E 50% Under Insured = only 50% of claim paid.
Underwriter
An underwriter is the person who decides whether to accept a Risk (i.e. whether to insure you) and also works out what Premium you should pay.
Utmost Good Faith
This refers to a principle of insurance. It means that insurance relies on the fact that anyone who applies for insurance gives all relevant information to the insurer. See also Material Facts and Duty of Disclosure.
V
Valuables
High value items, including Jewellery, pictures and works of arts, curios and antiques.
Voluntary Excess
Some insurance companies let you pay an additional amount, which is the amount of any claim which you wish to pay yourself. The amount of your Voluntary Excess is reduced from the claim payment which you receive. Excesses are cumulative, which means that the amount paid for any claim will be the total of your Compulsory Excess and any Voluntary Excess. Generally speaking, the higher your Voluntary Excess, the lower your premium will be, however you should not choose a level higher than you are able or prepared to pay.
Y
Year Built
The year the property was built.
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