Home insurance terms and glossary

Add-ons are any additional types of cover that you’d like to add to your standard home insurance policy. These typically cost extra to include in your policy. Examples of add-on cover include:

• Home emergency
• Legal expenses
• Alternative accommodation
• Replacement locks and keys

Computers and printers are usually covered under contents insurance. But if you use them to run a business from home or you take your work laptop home with you, they may not be. Some insurance providers can extend your home insurance policy to cover business equipment. Otherwise, you might want to consider a separate business insurance policy or check the insurance policy at your workplace if you use business equipment to work from home.

This is basically a leak. It’s often defined as “water escaping from a fixed water installation” which is usually your central heating system or general plumbing. You wouldn’t think water from a pipe would cause a lot of damage, but it can and escape of water claims often carry a higher compulsory excess amount (usually around £250) so check this on your policy. You will usually only be covered for the water damage itself, not repair of the pipe unless it’s been damaged by an insured event like accidentally drilling through it during a DOY mishap.

These are usually small, high value items that are easy to steal. Things like tablets, laptops, jewellery and mobile phones would usually be considered high risk by insurers. Insurance companies need to know the value of these items as having a lot of these types of items could mean a larger loss if you were burgled.

A compulsory tax on most types of insurance policies. The standard IPT rate is currently set at 12%.

Legal assistance can protect you against the costs of being sued or having to make a claim against someone else under a range of circumstances which include things like: - legal disputes for your insured home like boundary disputes or tresspassing

• Employment disputes
• Contract disputes
• Personal injury claims
• Clinical negligence

Typically included as a standard on most home insurance policies, new for old means that any damaged or stolen items would be replaced based on their current market value with a new like for like equivalent where possible. The only usual exception to this is for clothing and linen where there’s often a deduction made for deterioration.  

Rental contents insurance can provide cover if you’re renting a home and your possessions are stolen or damaged. This is the same as standard contents insurance, you just state during the quote that you’re renting. Contents insurance caters for a range of living circumstances like shared houses, insurance for flats, and student accommodation.

The sum insured is the total amount you could claim should you experience total loss - for example, your house burns down, and you need to completely rebuild and replace all of your contents.

The sum insured is usually split between buildings and contents insurance. It’s important to be as accurate as possible when you estimate the value of your home contents to ensure you’re not under or over insured.

This is when the sum insured isn’t high enough to cover the true value of your property or contents. Being under-insured could mean paying lower premiums, but it could also mean reduced claims settlements, typically by the percentage amount of the under-insured value. For example, if a home is under-insured by 20%, then a claim payout could be reduced by 20%.