Insurance: jargon buster
Don't let complicated terminology stop you finding the right insurance cover. Our jargon buster explains some of the most commonly used words and phrases to help you make sure you know what you're getting.
Act of God
A legal term that appears in insurance policies. It usually refers to something for which no individual can be held responsible, such as a tree falling on a car in a high wind. If something is an “Act of God†it doesn't necessarily mean your insurance won't cover it - just that it isn't possible to say whose fault it was.
Adjuster
Also referred to as a claims adjuster or loss adjuster, this is the person who checks some claims on behalf of your insurer. Their job is to make sure that the value of claims is accurate.
Association of British Insurers (ABI)
The ABI represents the UK's insurance companies and promotes high standards of customer service. It produces guidelines and standards for the industry.
Find out more on the ABI website.
Buildings insurance
Buildings insurance covers damage to your property and its permanent fixtures and fittings, such as bathroom suites, fitted kitchens and central heating systems. It usually also includes sheds, garages and greenhouses, as well as fences, gates, terraces, driveways and outdoor swimming pools.
Read our quick guide to buildings insurance.
Claim
The formal request you make to your insurance company when you need them to pay for a loss covered in your policy.
Contents
The items in your home that you would take with you if you moved, such as furniture, furnishings, stereo and audio equipment, clothing and jewellery. You can insure these separately from the building itself - for example, if you rent your home and your landlord insures the building.
Read our quick guide to contents insurance.
Cover
The financial protection provided by an insurance policy.
Due Care
The reasonable steps you have to take to prevent loss or damage - for example, locking your car or closing the windows in your home.
Endorsement
An endorsement is either:
- a written amendment to an insurance policy that becomes a legal part of it, or
- a record on your driving licence of any driving convictions you have
Excess
The amount you agree to pay before your insurance cover pays the rest (for example, the first £50 of a claim). You are normally given the option to increase or reduce the excess within the terms of your policy, which has an impact on your premium.
Read our quick guide to car insurance excesses
Exclusions
Items, events or circumstances not covered by your insurance policy.
Inception date
The time and date your cover starts.
Indemnity
A basic insurance principle that states that you shouldn't profit from a claim. After payment you should be in exactly the same financial position as immediately before the loss or damage took place.
Liability
The word liability refers to fault. If you are liable to someone, it means you're legally responsible for causing loss because you've injured them or damaged something that belongs to them.
Loss
The loss is the event that causes you to make a claim on your insurance policy - for example, damage to your car or theft of your property.
Period of cover
The amount of time that your insurance policy is active and valid.
Premium
The amount you pay for insurance cover, either annually or monthly.
Policy
The contract between you and your insurer setting out the terms of your cover.
Reasonable Care
See Due care.
Reinstatement
Otherwise known as new for old cover, this type of policy may put you in a better financial position after your claim. This is because the new item is likely to be worth more than the one that was lost or damaged.
Risk
Your premiums will be decided once your insurer has calculated your risk - how likely you are to make a claim and how much that would cost to settle. Your risk is based on many factors such as your age, where you live and what you do for a living.
Settlement
The amount you receive when the insurer pays your claim.
Sum insured
The maximum amount of money your insurance will pay if you make a claim.
Underwriter
An insurance company's underwriting department calculates your premiums, based on their assessment of your risk.
Write-off
If the cost of repairing a car or other vehicle after a crash is more than its market value, it is known as a write-off (or sometimes a total loss). Most insurance policies will only pay for repairs up to the market value of the vehicle.