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 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.
Suitable accommodation provided by the insurer if you cannot live in your own home because of an insured event, such as a fire.
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.
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 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 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.
Any non-manual work you carry out at the property.
Business equipment includes any items you own and use for your business, such as computers, telephones and printers.
The insurance company can charge a cancellation fee if you cancel the policy after the cooling-off period.
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.
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.
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.
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.
The upward movement of the ground supporting your property.
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.
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.
Downward movement of sloping ground.
When the customer stops paying premiums or does not renew a policy.
Cover for a legal dispute.
A person who investigates a claim on behalf of the insurance company.
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.
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.
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.
The maximum the insurer will pay out for any single event or item. You can find details in the policy schedule.
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).
The date when you’re invited to insure the property for another year.
Bathroom fixtures such as baths, bath panels, bidets, lavatory pans and cisterns, pedestals, shower screens, shower trays and wash basins.
The document that sets out the details of the cover your policy provides.
Downward movement of the ground beneath a building.
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.
When the foundations of a building are strengthened as a way to manage subsidence.
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.