Home Insurance Information

Glossary of Home Insurance Terms

when you apply for your Home Insurance you may encounter some of the following terms. If you are unsure of any term relating to your Home Insurance policy it is better to ask your insurer or broker for help....

All Risks- A wider form of cover than that provided by the standard Contents Section, items can be insured on a specified or unspecified basis and will include accidental loss or damage insurance away from your home.

Average Clause - Insurers insert this clause on your policy as a means of dealing with under insurance. It has the effect of reducing a claim in proportion to the amount of underinsurance.

New For Old - Most policies for Home Insurance are now arranged on a new for old basis. In simple terms your old items are replaced with new items. To secure this cover you will have to insure your contents for there full market value. There are some exceptions where cover is not on a New for Old basis, mainly clothing.

Claim - If you have insurance policy and are unlucky enough to suffer a loss, you will be entitled to make a claim for your financial loss from your insurers, providing that the policy wording covers the cause.

Cancellation Period - The Financial Services Authority require insurers to give you a statutory cooling off period in which you can cancel your policy. It is usually 14 days and most insurers will make a full refund of any insurance premiums collected. After the 14 days period, you are still free to cancel you policy and any rebate will be calculated in accordance with the insurers standard scale, which is usually published in your policy document.

Commission - This is the amount of remuneration paid by the insurer to a broker or intermediary for placing business with them.

Contract Of Insurance - This is agreement between an insurer and your self, in return for you paying a premium; the insurer will pay you compensation or a sum of money on the happening of an insured event.

Days of Grace - These are additional days of cover provided after your policy has ended. The usual amount is 14 days.

Direct Insurer - an insurance company or underwriter that will sell you insurance directly without going through a "middle man" such as a broker or Intermediary.

Endorsement - a policy endorsement alters the scope of your policy wording. It can have two effects, it can extend your cover or it can restrict your cover. It is very important to read all of your policy endorsements so as to fully understand your covers.

Excess this is the amount of money that your will have to contribute towards a claim. Some excesses are compulsory such as subsidence excess; some are voluntary where you can elect to receive a discount in return for paying the first portion of any loss.

Extended Accidental Damage - Most policies will include a certain amount of Accidental Damage cover free of charge. Under Contents Insurance Free Accidental Damage Insurance normally includes TV Videos and Sound reproducing equipment and fixed glass in furniture. Under Buildings Insurance Free Accidental Damage Insurance normally extends to breakage of baths and lavatory pans, bidets etc and fixed glass in windows and doors. Extended Accidental Damage will extend the cover to include all other items.

Fee - Brokers & Intermediaries may place fees on your policy for arranging things for you, any fees charged should be mentioned in your documents.

Indemnity - A very important Insurance principal, the insurer in granting indemnity to a client will seek to place them in the same financial position after the loss as they were in before.

No Claims Bonus - In return for not making claims under your policy, the insurer may reward you with a discount from your premiums. For each year of no claim up to usually a maximum of three or four, the insurers will provide an additional discount.

Peril - Something that happens that could lead to a claim under an insurance policy such as a Fire or Flood etc.

Premium - This is the money that you will have to pay to your insurer in return for your insurance policy, it is sometimes known as consideration.

Proximate Cause - This is the active cause of a loss that sets in motion a train of events that brings about a result without the intervention of any force started and working actively from the new and Independent source. In simple terms this means that the most recent cause of a loss is not the cause that the insurers study to see if an event is covered. They look to see the active or first cause, check that the peril is covered by a policy, and then decide if a claim is valid.

Renewal Notice - At the end of your insurance contract term the insurer will send you an invitation to renew your policy. The notice will quote the new contract price and period of insurance and advise you of any changes to the terms & conditions of your policy.

Schedule - the schedule of Insurance outlines the sums insured under your policy, and tells you the policy sections you have covered and may make reference to any endorsements applicable to your policy contract.

Subrogation - Legally this right of one person to stand in place of another and to avail himself of the rights and remedies of that other person. Usually it relates to the insurers being able to recover their losses.. more...

What is Buildings and Contents Insurance?

Also referred to as Home Insurance, Homeowners Insurance or Household Insurance, they amount to the same. Quite simply they are insurance products that can be purchased from a variety of sources to cover the fabric of your home and / or your personal possessions that are kept in the home. Cover can be extended to cover items such as valuables that are temporarily removed from your home. This extension is often called “All Risks” Insurance. None of these insurances are compulsory but you may find it a condition of your mortgage that you buy at least Buildings Insurance to protect the lenders financial interest in the property. Most policies are similar in the covers they provide as mortgage lender etc have a standard set of perils that must be provided to secure a loan on the property. Probably the biggest purchase you will make in your life is that of your home. To qualify for a mortgage to purchase a property, you will need to satisfy your lender that you have a Home Insurance policy in force that confirms to their terms & conditions. Most insurers are aware of these terms & conditions and aim to make their polices compliant. There are a large number of policies on the market available from insurance companies direct, banks, building societies and via brokers who may be able to offer you more choice. more...

What is the Definition of Building Insurance?

For Insurance purposes, the “ Building” is defined as follows:- The home, the main structure of the property, it’s permanent fixtures and fittings, patios, terraces, hard sports courts, sunken swimming pools, ornamental ponds, fountains, cesspits, sceptic tanks, central heating fuel tanks, paths, drives, walls, gates, fences, railings and lampposts all contained or within the boundaries of the land of the address provided to the insurance company. You should insure your Building for its full reinstatement value, that basically means the total amount it would cost to rebuild the property in them event that it was totally destroyed. If you have a mortgage on the property your lender will normally give you advice on this matter. more...

Home Insurance for Properties Abroad

In recent years, It has become fashionable to buy a second or retirement home in Spain or other European Country, in fact there are no over 600,000 UK Expats living in Spain alone. A trend that has recently started to develop is the purchase of foreign property for investment and to produce a rental income, this is the so-called “fly to let” market. One of the problems facing owners of property abroad is the ability to purchase Buildings and Contents Insurance. You may find that it is cheaper to buy insurance from a foreign or local insurance company and the local agent or notaire may recommend this to you, but beware you may find that local insurance does not offer the same range of perils as obtainable from a United Kingdom based Insurer. In general, Uk insurers tend to try to follow the standard wordings available in this country but with certain additions or restrictions depending on the country where your property is situated. more...

Information Required by Brokers or Lenders for Buildings Insurance

To obtain buildings or contents insurance, the sort of information required by insurance brokers or lenders is as follows:- Name & Contact Details, Risk Address & Postcode, Date of Birth, Occupation, Smoking/Non Smoking, Convictions. more...

How Do I Get a Discount on My Buildings or Contents Insurance?

the following tips should make you aware of the factors that insurers or brokers may consider. more...

What is Contents Home Insurance?

Home Content Insurance covers your personal belongings at the insured address and can be extended to cover items taken away from the home such as valuables, pedal cycles and portable electrical items such as camcorders etc. To enable an insurer to calculate a premium for you, you must either accept a policy on a Bedroom Rated basis or Advise the insurer of your “Sum Insured”.. more...

Cheaper Home Insurance Tips

we all want to save money on our Home Building & Contents Insurance but is there anything we can do to genuinely save money. It is worth pointing out that attempting to save money but not providing the insurer with the correct information is not an option. Failure to present the insurer with all the material facts may well result in your policy being declared null and void in the event of the claim.. more...

What is Items Are Usually Covered By Home Insurance?

Home Insurance Contracts vary from insurer to insurer. However the basic cover is usually similar. It is worth bearing in mind that for a bank or building society etc to lend money on a property, they will require you to have a valid insurance policy in force with certain sections covered. They will want their interest noted in the policy document to satisfy the Contract Rights Act and they will usually want to see a copy of your Home Insurance policy. The following perils are fairly standard and should be used as a general guide to help your understanding. more...

Making a Home Insurance Claim

If you are unfortunate to suffer an accident or a loss and the event is covered by your insurance policy, then you will be entitled to make a claim from your insurance company. Many people believe that insurers don’t like paying claims, this simply is not true. No insurance policy will cover all eventualities and sometimes an incident will not be insured. You must also remember that before your insurers will pay out a claim under you Home Insurance policy, they will want to be satisfied that you have complied with any policy terms and conditions that might be applicable. Your policy will provide a list of the perils that you may claim for and we have provided a list of the standard ones applicable. However most policies also provide a list of events that are definitely not covered, these include. more...

Mortgage Protection Insurance

This product can have various names etc but basically it is designed to protect your mortgage payments in the event that you are unable to work. It usually covers Accident and Sickness Insurance but can be extended to include Unemployment Insurance and Redundancy insurance as well. This type of cover should not be confused with Mortgage Life Insurance which will pay out if you die, a decreasing sum insured reflecting the reducing amount outstanding on your loan. This cover can be extended sometimes to include Critical Illness cover.. more...