Inurance Glossary of terms

Accidental loss or damage	Destruction or damage caused by violent external means. With household policies you can add accidental damage cover to your buildings and contents. This would cover you then in the event of an accident, for example someone putting their foot through the ceiling, or dropping some paint on the carpet.
Act of God	An event which is not the fault of any individual, for example floods and storms. Acts of God can be insurable.
Age	Many insurers provide a discount for clients aged 50 or over. Some insurers will load premiums for those aged 30 or less, or may even not quote.
Alarm	Many insurers provide a discount for properties that have an alarm fitted. This will normally only apply though if the alarm is fitted and regularly maintained by a 'NACOSS' member. Most insurer's will not give their usual discounts unless proof can be given.
All Risks	Wider cover than given under a normal property insurance policy. Covers any loss or damage apart from exclusions stated in the policy. Commonly the term now used is Personal Possessions cover and this avoids confusion.
Bedrooms	Some insurers base the premium upon the number of bedrooms in your property. You must count all rooms if they were designed as bedrooms (even if you no longer use them as such).
Building Accidental Damage	Covers you in the event of damage being caused to your buildings accidentally. For example putting your foot through the ceiling whilst you are in the loft.
Building Sum Insured	The Building Sum Insured is usually the re-building cost i.e. the amount it would cost to rebuild your home in the event of it being totally destroyed (say by fire).
Buildings	When an insurer talks about buildings they usually mean the house (or flat) and its domestic outbuildings, garages, greenhouses, tennis courts, swimming pools, terraces, patios, drives, footpaths, walls, gates, fences, hedges and including landlords fixtures and interior decorations forming part of the property on the same site.
Buildings Insurance	A policy covering the structure of a house or other building against a number of different risks.
Caravan	Some household policies allow you to cover a caravan and its contents for an additional premium, thus avoiding the need for a separate caravan policy.
Certificate	Document issued by insurers as evidence that insurance is in force to meet the requirements of the law (notably for motor and employers' liability insurance).
Claim	When a policyholder or beneficiary seeks payment or settlement under the terms of a policy.
Combined policy	Normally a policy which combines cover for buildings and for contents into a single contract.
Commission	Money paid by an insurance company to a broker/ independent intermediary/agent for selling policies.
Condition	Part of a policy stating that certain rules must be followed, for example, the duty to take reasonable care to protect property, or to report claims to the insurance company promptly.
Consequential Loss	Insurance covering the loss of profits of a business and certain other costs resulting from fire or other insured event (also known as Business Interruption).
Contents	Household goods, furniture, furnishings, appliances, clothing, valuables, personal effects and money owned by the client or his/her family and in private use, fixtures, fittings and interior decorations for which your client or his/her family are legally responsible as occupier, visitors personal possessions provided they are not otherwise insured.
Contents Accidental Damage	Covers you in the event of damage being caused to your contents accidentally. For example dropping a tin of paint on a carpet whilst decorating.
Contents Insurance	A policy covering the contents of home a against a number of different risks.
Contents Sum Insured	The Contents Sum Insured is the total amount of cover required to replace all your belongings, in the event of everything being destroyed. Don't forget carpets, curtains, linen, as well as all other possessions, furniture and electrical goods.
Cover Note	A document giving temporary evidence of cover while the policy and certificate are being prepared. Most commonly a cover note for motor insurance.
Critical Illness Insurance	Pays out a lump sum on the diagnosis of certain life-threatening illnesses specified in the policy.
Employers' Liability	A compulsory class of insurance which most employers must have to cover them against claims by employees who are injured at work.
Excess	An amount of money which the policyholder has to pay towards the cost of each and every claim, for example, the first £50.
Exclusion	Specified property, person or event which the policy does not cover.
General Insurance	Insurance of (non-life) risks where the policy offers cover for a limited period, usually one year.
Green Card	A document issued to policyholders motoring abroad as evidence that they have the minimum insurance cover required by the law of the country visited. Not essential for European travel, because minimum legal cover is automatically included in UK policies.
Holiday Insurance	A policy covering certain risks connected with holidays. Usually includes cover for the costs of unavoidable cancellation, personal accident, medical treatment abroad and lost or stolen luggage. More usually described as Travel Insurance
Indemnity	The principle by which policyholders are put in the same financial position after a loss as they were immediately before it.
Index linked	Where the sum insured automatically increases either in line with inflation or some other relevant index (for example the house rebuilding cost index).
Index-linked	Insurance where the amount of cover changes automatically in line with an index. Examples are the cost of rebuilding a house or replacing its contents.
Individual Permanent Health Insurance	Policies arranged by an individual providing for the payment of income during a period of incapacity due to ill health or accident. The benefit is paid to the policyholder until he/she is able to return to work, or until retirement.
Insurance	A service that offers financial compensation for something that may or may not happen. Originally the term assurance was generally used for life insurance, but now the two words are interchangeable.
Insurance Company	A company that takes on risks under the policies it sells in return for the payment of premiums. Companies may be "mutual" (owned by the policyholders) or "proprietary" (owned by the shareholders).
Insurance Premium	The amount paid by the policyholder for insurance.
Insurance Premium Tax	A government tax imposed on most insurance premiums. Currently 5% on most contracts and 17.5% on travel insurance
Liability	Legal responsibility for causing loss to someone else by injuring them or damaging their property. Householders - like everyone else - have a duty to exercise reasonable care in everything they do. If you are careless or negligent, and injury or damage results to someone else or their property - then you could be held "legally liable" - perhaps for a great deal of money. Contents and buildings policies cover you against this risk. The buildings policy covers you as owner of your home while the contents policy covers you as its occupier.
Listed	Some insurers will not cover listed properties, others will require an up to date RICS valuation.
Lloyd's of London	An insurance market organised into syndicates, which underwrites most types of policy.
Loss Adjuster	A person, independent of an insurance company but engaged and paid by it, who checks that a claim is covered and negotiates with the policyholder the amount payable for a claim. Loss adjusters are independent experts with a good knowledge of the area in which they operate. They are skilled in assessing claims and in advising on the best repair and reinstatement methods. They will recommend to the insurance company the way in which your claim should be settled.
Loss Assessor	A person who negotiates claims on behalf of policyholders.
Mechanical Breakdown Insurance	Covers against the cost of breakdowns of household appliances or motor vehicles.
Minimum Securities	Some insurers require the installation of approved alarm and/or minimum security fittings. Check whether this applies. You may qualify for a discount from the premium if you already have good security. Doors Outside doors should have deadlocks which at least conform to BS3621. These locks can only be opened by key. A burglar cannot just use a plastic card to push back the tongue of the lock or break a glass panel and reach in to open it. Doors which you usually lock from the inside - for example the back door - should also be fitted with bolts. Double doors should have bolts (preferably security bolts with removable keys) at the top and bottom of both doors as well as a lock. On patio doors, additional security locks should be fitted to stop the slicing frame being lifted off the tracks. The sliding leaf of patio doors should be fitted on the inside. Windows Most burglaries are through windows. Key operated locks should be fitted to all accessible windows - those on the ground floor and those near drainpipes and flat roofs. These locks are inexpensive to buy and easy to fit. In all cases security devices must be in operation whenever members of the insureds household have gone to bed for the night or when no one is at home. The keys to doors and windows should be removed from the locks and be kept in a concealed location, but be ready for use in the event of an emergency, (the definition may vary from insurer to insurer and the exact wording should be checked in the policy booklet)
Mortgage Payment Protection Policy	Cover for monthly mortgage repayments in the event of accident, sickness or unemployment. Often referred to as ASU.
Mortgage Protection Policy	A life insurance policy which covers the outstanding amount of mortgage if the policyholder dies before the loan is repaid.
Motor Insurance	Covers legal liabilities arising from the use of a motor vehicle. Comprehensive policies also cover damage to the vehicle.
Neighborhood Watch	A police approved Neighborhood Watch scheme of which the policyholder is a member.
New-For-Old	Cover for property where an item lost or destroyed would be replaced with a brand new one, with no deduction for wear and tear. Also called "replacement as new".
No Claim Discount (or Bonus)	A reduction in a renewal premium to reflect a claim-free record; used most often in motor insurance but increasingly common with household policies.
No claims discount	This discount is only available, based upon the number of claim free years insurance has been held
Occupancy	Some insurers will provide a discount depending on whether or not the property is occupied on a regular basis during weekdays. Properties which are unoccupied for more than 30 days will not normally be accepted, you will need to obtain a Unoccupied property insurance.
Occupier's Liability	Accidents often occur around the home, for example a visitor to the house trips over a loose carpet tile and injures themselves. Personal injury cases in particular can cause substantial claims. Occupier's Liability cover is part of the Contents Insurance.
Outbuildings	Buildings outside the house, for example a shed, greenhouse, stables.
Owners Liability	Sometimes a claim can arise because of the negligence of the policyholder (or a member of the household). Someone could be injured or suffer property damage and the policyholder would be liable. Imagine, for example, that a loose tile falls off the roof and injures a member of the public, the claim could be substantial. Cover for owner's liability is part of the Buildings Insurance.
Personal Accident Insurance	A policy which pays specified amounts of money if the policyholder is injured in an accident. Depending on the type of disability, the payments may be made weekly, for a set period, or as a lump sum.
Personal Belongings	Most insurers will provide cover for items which don't have a high individual value. This would cover clothing and personal effects, jewelry, watches, furs, photographic equipment, binoculars, cellular phones, musical instruments, sports equipment, luggage, toys, portable radios and televisions up to a pre-defined limit. For example £3,000 of cover as long as no single article is worth more than £1,000.
Personal possessions	These are articles normally worn, used or carried about in every day life. We define them as clothing and personal effects, jewelry, watches, furs, photographic equipment, binoculars, cellular phones, musical instruments, sports equipment, luggage, toys, portable radios, televisions and pedal cycles. Please note some of the above items have to be specified on the quote system as there are different ratings for different companies. i.e. pedal cycles, video cameras, musical instruments.
Policy limit	A limit on the amount of cover that an Insurer is prepared to offer. For example the valuables limit may be one third of the contents sum insured. The insurer is not prepared to insure the contents where there are valuables exceeding this amount.
Policy wording	The policy wording explains exactly what cover is provided by a policy. You should always refer to the policy wording if you need to check if a particular cover is available. In most cases the policy wording is contained within a booklet (the policy booklet) which is sent to the customer with a schedule.
Policyholder	Person or organisation to whom the insurer issues the policy. Normally the person to whom benefits are payable.
Post Code	Enter the full Post Code: OX7 5SR - Don't forget the space in the middle and remember to use a the letter O or zero correctly. This is the main rating factor for the insurers and you cannot obtain a quotation without entering a valid post code.
Premium	The amount paid by the policyholder for insurance.
Previous Insurance	The number of years that insurance has previously been held. Most insurers will give a No Claims Discount and this is based on the number of claim free years for which the client has been insured. In order to qualify for the discount you will need to know the previous insurance details when completing the proposal.
Private Medical Insurance	A policy which covers the cost of private medical treatment.
Professional Indemnity Insurance	Protects professionals against liability claims resulting from negligent work.
Proposal Information	It is important that you answer these questions in full as they will form the basis of the Insurance contract. It is possible to omit the start date and CETA will still process the proposal and will hold the case pending confirmation of the start date. If you are unsure of any point, or wish to disclose some other material fact, use the Notes page.
Proposal Notes	It is important that the you disclose all material facts to the Insurer, failure to do so may mean that the policy will not operate in the event that a claim is made. If you are unsure of whether something is a material fact or not, you should disclose it.
Proposal Questions	These questions form the basis of the declaration to the insurance company. It is important that these are read and changed if necessary.
Proposer	Person or company who applies to take out insurance.
Public Liability Policy	Covers legal liability for injury or damage caused to others.
Refer	When the quotation system cannot produce a quotation for a particular product, usually because the risk is outside the scope of the standard underwriting terms, then the insurer will ask for the risk to be referred to the underwriters. The underwriters may then decide to accept or decline the risk. If accepted they will notify you of the premium and any special terms or conditions that might apply.
Reinsurance	Reinsurance is the cover insurance companies can purchase to protect themselves against large losses.
Renewal Notice	Notice sent to the policyholder inviting him/her to renew a policy for a further period and stating the premium payable.
RPI	Retail Price Index - an index taking into account the amount prices of retail goods are rising or falling.
Security	Some insurers require the installation of approved alarm and/or minimum security fittings. Check whether this applies. You may qualify for a discount from the premium if you already have good security. Doors Outside doors should have deadlocks which at least conform to BS3621. These locks can only be opened by key. A burglar cannot just use a plastic card to push back the tongue of the lock or break a glass panel and reach in to open it. Doors which you usually lock from the inside - for example the back door - should also be fitted with bolts. Double doors should have bolts (preferably security bolts with removable keys) at the top and bottom of both doors as well as a lock. On patio doors, additional security locks should be fitted to stop the slicing frame being lifted off the tracks. The sliding leaf of patio doors should be fitted on the inside. Windows Most burglaries are through windows. Key operated locks should be fitted to all accessible windows - those on the ground floor and those near drainpipes and flat roofs. These locks are inexpensive to buy and easy to fit. In all cases security devices must be in operation whenever members of the insureds household have gone to bed for the night or when no one is at home. The keys to doors and windows should be removed from the locks and be kept in a concealed location, but be ready for use in the event of an emergency, (the definition may vary from insurer to insurer and the exact wording should be checked in the policy booklet)
Single Article Limit	Within particular sections of a policy (for example valuables, personal possessions, specified items) the insurer will limit the amount of cover they will provide for any single article. If any item exceeds this limit then the policy will need to be referred to the insurer to see if they are prepared to accept the risk and if so on what terms.
Solvency Margin	The solvency margin is the excess of the reserves the insurance company holds over its liabilities.
Specified Item Description	A brief description of the item being covered. Many insurers will ask for valuations of specified items over a certain value, usually around £1,500
Specified Item Value	The value of the individual item.
Sports Equipment	Some insurance companies prefer you to identify sports equipment separately from other Personal Possessions.
Sub Let	If the property is being sub-let to the occupier, or on loan. Only certain insurers will accept Sub-Let properties and there will be additional limits and exclusions that will apply. Landlords contents only and no accidental damage options for example. DSS, Student and Holiday homes may have to be referred before you can obtain a quote.
Sum Insured	The amount for which property is insured, and the maximum amount which the insurance company will pay for any claim.
Third Party	Someone involved in a claim who is neither the policyholder nor the insurer.
Underinsurance	When the sum insured is not enough to cover the maximum possible loss or damage.
Underinsured	Where the amount of cover is insufficient to pay a claim in full. For example if the buildings were underinsured then in the event of a fire the insurance company may either refuse to pay the claim at all, or only pay part of the claim. Underinsurance is not fair on the rest of the population because effectively the insurer is grouping together all the premiums and setting that against the total claims, to work out the rate. If someone is underinsuring it means they are paying a smaller amount but could still make claims. Consider the case where there are two homes with £30,000 of contents. One is insured for the full value and one for only £20,000 and is therefore underinsured. If they both make a claim for a £1,000 theft, the underinsured home could still be paid the £1000 claim, but their premiums would have been lower. This is clearly not fair on the others.
Underwriter	Person who decides whether to accept a risk and calculates the premium to be charged.
Uninsurable Risk	A risk where loss is either inevitable (e.g. a house already on fire or a person suffering from a terminal illness). Also applies where damage is gradual e.g. rust and corrosion.
Valuables	Items of gold, silver and other precious metal, precious stones, jewelry, furs, pictures, curios, other works of art, telescopes, microscopes, collections of coins, stamps or medals, remaining within the home.
Warranty Insurance	This type of insurance provides cover against the cost of repairs to broken down household appliances.
Write-Off	A damaged vehicle which is not repairable, or one which would cost more to repair than the car was worth before the damage occurred. Also known as a "total loss".
Year Built	The approximate year that the property was originally built. Most insurers give discounts for properties that have been built recently.