Home insurance glossary

Home insurance made simpler with our glossary

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If you’ve ever read the terms and conditions of your home insurance policy, you could be forgiven for thinking they were written in a different language.

Alphabet letters

But if you don’t understand the terminology, you could end up with the wrong cover. That’s why we’ve put together a glossary of common home insurance terms, so you need never be confused again.

Accidental damage

Accidental damage is any sudden, unintentional damage. For example, you might spill red wine on a carpet. You can buy accidental damage cover for either your buildings, your contents, or both. It’s usually an optional extra, though it might be included on some policies.

Alternative accommodation

Suitable accommodation provided by the insurer if you cannot live in your own home because of an insured event, such as a fire.

APR

If you pay for your insurance monthly, rather than in a lump sum, you’ll often be charged interest, expressed as an APR.

It stands for annual percentage rate and is the total cost of any credit, including interest and fees, over one year. For example, if the APR is 10% and you borrow £1000, the cost of the loan is £100 a year.  

Bedroom

When it comes to home insurance, a room is classed as a bedroom if it’s built or converted for sleeping in. Even if the room isn’t being used as a bedroom – for example, if it’s being used as an office – the insurer will still class it as a bedroom.

Buildings

Buildings refers to more than just the physical structure of your home. It also includes the outside of your property, such as the drive, fences, gardens, patios, solar panels, trees, walls and wind turbines. It also covers outbuildings like conservatories, garages and sheds, and permanent fixtures and fittings, like cables, drains, oil tanks, and pipes.

Buildings insurance

Buildings insurance is usually compulsory with a mortgage. You can claim on it for any loss or damage to your property as a result of an insured event such as fire, flood, storm, theft, subsidence or escape of water.

Business

Any non-manual work you carry out at the property.

Business equipment

Business equipment includes any items you own and use for your business, such as computers, telephones and printers.

Cancellation fee

The insurance company can charge a cancellation fee if you cancel the policy after the cooling-off period.

Contents

Household goods that you keep in your home. This includes computers, electrical appliances, furniture and furnishings, as well as personal possessions like cameras, clothing, jewellery and mobile phones. It also includes things you keep in any outbuildings, such as gardening equipment.

Contents insurance

Insurance against loss or damage to the contents of your home, garden or outbuildings as a result of an insured event such as fire, theft, storm or flood.

Continuous payment authority (CPA)

If you agree to a CPA, the insurer can automatically take payment for future premiums without the need to contact you first.

Cooling-off period

The initial period during which you can cancel the policy without charge, usually 14 days.

Escape of water

Damage caused by water that has escaped from the mains water supply. This is often from a burst pipe, or a bath, shower, toilet, radiator or washing machine.

Excess

The amount you must pay towards any claim. For example, if you make a claim for £500 but the policy excess is £200, the insurance company will only pay out £300.

Heave

The upward movement of the ground supporting your property.

Home

The insured property shown in the home insurance schedule and its garages and outbuildings.

Home emergency cover

You can often add home emergency cover to your home insurance policy. You would then qualify for 24-hour assistance and cover for the cost of emergency repairs to your home that could cause further damage if not dealt with, could make your home unsafe or could leave you without heating, water or electricity.

Home entertainment equipment

All audio equipment, computer equipment (including games and laptops), DVD and video players and recorders, games consoles and TVs in your home, including aerials and satellite dishes fixed to your property.

Insurance Premium Tax

Insurance Premium Tax (IPT) is a tax on general insurance premiums, including home insurance. The standard rate went up from 9.5% to 10% on 1st October 2016.

Inventory

A list of your home contents, taken room by room. It can be useful when working out the value of your contents, and if you need to make a claim.

Landslip

Downward movement of sloping ground.

Lapse

When the customer stops paying premiums or does not renew a policy.

Legal protection

Cover for a legal dispute.

Loss adjuster

A person who investigates a claim on behalf of the insurance company.

Mortice lock

A type of lock, commonly for external doors. It comes in a choice of two, three or five levers. Insurers often recommend a British Standard five lever mortice lock for all external doors.

New for old

If your policy provides new for old cover, replacements for any damaged or stolen items will be brand new, even if the originals were old.

No claims discount

A discount you get if you don’t make a claim on the policy during the term. This often increases in size if you don’t claim for multiple years in a row.

Non-standard construction

Any home that doesn’t have brick walls and a slate or tiled roof is likely to be considered non-standard, such as a home with a thatched roof. Properties like this will need specialist cover.

Period of cover

The period for which you are insured, as detailed on the policy schedule.

Personal possessions

Belongings such as cameras, e-readers, glasses, jewellery, mobile phones, purses, sunglasses, tablets, wallets, and watches that you normally wear, use or carry during daily life.

Policy limits

The maximum the insurer will pay out for any single event or item. You can find details in the policy schedule.

Rebuild cost

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. Alternatively, the Association of British Insurers (ABI) provides detailed guidance on calculating the rebuild cost of your home (abi.org.uk).

Renewal

The date when you’re invited to insure the property for another year.

Sanitary fittings

Bathroom fixtures such as baths, bath panels, bidets, lavatory pans and cisterns, pedestals, shower screens, shower trays and wash basins.

Schedule

The document that sets out the details of the cover your policy provides.

Subsidence

Downward movement of the ground beneath a building.

Sum insured

The maximum amount your policy will pay out.

Trace and access

Cover to detect, reach and repair a leak, usually water but some policies also include gas leaks.

Underpinning

When the foundations of a building are strengthened as a way to manage subsidence.

Valuables

Clocks, furs, jewellery, watches, items or sets or collections of gold, silver or other precious metal, works of art, sets of stamps, coins and medals.

Wear and tear

The decrease in value of an item or property due to deterioration over time.

Where to next?

Home insurance money saving and security tips

Top tips for moving home

All you need to know about home insurance

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