Skip to content

Home insurance glossary and terms

Home insurance is there to protect your home and belongings, so it’s important to understand your policy. But it’s easy to get bogged down in jargon, so we’ve compiled a straight-talking glossary of commonly used home insurance terms.

Home insurance is there to protect your home and belongings, so it’s important to understand your policy. But it’s easy to get bogged down in jargon, so we’ve compiled a straight-talking glossary of commonly used home insurance terms.

Written by
Anna McEntee
Home, pet and travel insurance expert
Last Updated
18 JANUARY 2023
11 min read
Share article


The Association of British Insurers (ABI) is the leading trade association for insurance providers. The ABI promotes industry best practice and highlights insurance-related consumer and business issues.

Accidental damage

This covers accidental damage to your property or belongings. Some home insurance policies include it as standard, or you may be able to add accidental damage as an optional extra to both your buildings and contents insurance.

Buildings accidental damage will cover damage to the structure of your property and permanent fixtures, plus fitted kitchens and bathrooms. Poor workmanship and any damage that happens gradually over a long period of time are usually not covered.

Contents accidental damage covers damage to items within your home, for example: furniture, carpets, curtains, electronic devices and freestanding white goods. Damage caused by pets usually isn’t covered, neither is damage that happens gradually over a long period of time – such as sunlight causing fabric to fade.

The level of cover varies among providers, so check the policy details before you buy.

Acts of God

An Act of God refers to a natural disaster that isn’t anybody’s fault and couldn’t be avoided, for example, flooding, storm damage, an earthquake or volcanic eruption.

Although it’s a generally known term, it isn’t used by insurance providers these days. Instead, your policy will set out what it does and doesn’t cover.


There are additional types of cover you might add to your standard home insurance policy. These typically cost extra to include. Examples of add-on cover include:

  • Home emergency
  • Legal expenses
  • Alternative accommodation
  • Replacement locks and keys
  • New for old
  • Freezer contents cover.

Alternative accommodation

Alternative accommodation cover can pay for you and your family to stay in temporary accommodation if your home becomes uninhabitable due to an insured event like flooding, storm or fire damage, or subsidence.


Any changes that are made to the original insurance policy.


Stands for Annual Percentage Rate. This is the amount of interest you’ll be charged if you pay for your insurance monthly, rather than annually.


Many home insurance providers offer an auto-renewal option when you take out a policy. This means that your policy will be automatically renewed each year, so there’s no risk of being left without cover.

While it can be convenient, automatically renewing your home insurance could mean that you might be missing out on potential savings. You’re not under any obligation to auto-renew, so it’s worth comparing with other providers to see if you could find a better deal elsewhere.

Buildings insurance

Buildings insurance covers the structure of a building, including the walls, roof, chimneys and windows. It will also usually include:

  • Permanent fixtures and fittings, like the bathroom and kitchen
  • Permanent outbuildings, such as a garage.

Business equipment cover

Computers and printers are usually covered under your contents insurance. But if you run a business from home or take your work laptop home, 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. If you bring office equipment home, check your workplace insurance policy.


If you want to cancel your home insurance policy before it’s due to expire, you may be charged an early cancellation fee by your insurance provider. Check the terms and conditions of your policy to be sure.

Claims history

Insurance providers will need to know about any past claims you’ve made to determine how much your home insurance should be. Typically, any claims you make will increase the cost of your premiums.

Contents insurance

Contents insurance covers all removable items in your home. This includes clothes, furniture, electrical appliances, carpets and curtains.

Cooling-off period

When you take out an insurance policy, you can change your mind and cancel your policy within 14 days without being charged.

Combined cover

This is when your buildings and contents cover are combined under the same policy. Combined buildings and contents insurance with the same provider can often work out cheaper than two separate policies.

Duty of disclosure

Any changes that could affect your home insurance must be disclosed to your insurance provider, or your policy may be invalidated. For example, if you have building work done and increase the number of bedrooms you have, you have a duty to let your insurance provider know.

Escape of water

Basically, a leak. It’s often defined as ‘water escaping from a fixed water installation’, 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.

Escape-of-water claims often carry a higher compulsory excess (typically around £250), so check your policy. You’re usually only covered for the water damage, not the pipe repair, unless it’s covered by other insurance – for example, if you accidentally drilled through the pipe in a DIY mishap.


When you make a claim on your home insurance, you’ll have to pay a certain amount towards it. This is called an excess. There are two types of excess:

  • Compulsory – a non-negotiable amount your insurance provider sets.
  • Voluntary – a set amount you can pay on top of the compulsory excess. Paying a higher voluntary excess can lower your premium.


Certain risks or events that aren’t covered by your home insurance – for example, pet damage. Any exclusions will be clearly set out in your policy terms and conditions.

High-risk items

These are items that could be easily stolen from your home, such as jewellery, electrical goods, antiques and more.

Insurance providers want to know about these items as they’re typically more desirable to steal and, if they’re damaged, they can be expensive to replace.

Home emergency cover

This provides 24-hour emergency call-outs and covers the cost of urgent repairs for situations like a broken boiler and heating, pest infestations and security issues. Home emergency cover can be added to your home insurance for an extra cost or you can buy it as a separate policy.

Home entertainment equipment

A general term that includes all computer, television, audio and games console equipment in your home.

Insurance broker

An independent intermediary who can advise on insurance matters and help you find a policy based on your needs and requirements.

Insurance brokers should be impartial, which means they aren’t tied to any particular insurance provider. They should work on your behalf and ensure your interests are always put first.

Insurance Premium Tax (IPT)

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

Insured events

When you make a claim, the cause of the damage must be an ‘insured event’ that’s covered in the terms and conditions of your insurance policy. In a standard home insurance policy, you’re usually covered for:

  • Fire
  • An escape of water (water leaking from pipes, radiators, etc)
  • Flood
  • Theft or attempted theft
  • Storms
  • Subsidence
  • Vandalism
  • Falling trees
  • Collision by road vehicles.



It’s not always easy to work out how much contents insurance you need. One way to do it is to make an inventory – that is, a room-by-room list of everything you own.

Legal expenses cover

Legal expense insurance can cover the cost of legal advice and representation if you’re sued or have to make a claim against someone else. It’s often useful for neighbour issues, like boundary disputes or trespassing. Other circumstances when you might need it include:

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

Loss adjuster

In the event of a major claim, like a burglary or fire, your insurance provider will appoint a loss adjuster to assess the situation. Loss adjusters are claims specialists – they’re responsible for establishing the cause of a loss and determining whether it’s covered by your insurance policy.

New for old cover

New for old is included as a standard on most home insurance policies. It means that if your belongings are damaged or stolen, they’ll be replaced based on their current value with a new like-for-like equivalent, where possible.

No claims discount (NCD)

Just as with car insurance, homeowners can build up a no claims discount on their home insurance. This means that if you don’t make a claim on your home insurance for 12 months, you could receive a discount on your next premium. You’ll continue to receive a discount for every year you don’t make a claim up to five years.


Failure to inform your insurance provider about something that could affect your claim. It’s crucial that you’re 100% honest with your insurance provider. Non-disclosure could result in your policy being cancelled, leaving you with no cover at all.

Non-standard construction

If you live in a listed building, a timber-framed home or a house with a thatched roof, insurance providers will consider your home to be non-standard. This may mean you need specialist home insurance.

Personal possessions

Personal possessions are what you carry with you when you leave the house. This includes jewellery, watches, handbags, purses and tech gadgets. When you’re at home, these are usually covered as standard by your contents insurance. But if you take them out and about, you may need extra personal possessions cover.


The policyholder is the person whose name is on the policy and who is responsible for paying the premiums.

Policy term

This is the period of time your policy will cover. The policy term for home insurance typically lasts for 12 months.


This is the amount you’ll pay for your policy each year. Most insurance providers give you the option of paying upfront for the whole year or in monthly instalments. You’ll usually be charged interest on monthly payments, so paying annually in one go can often work out cheaper

Price walking

Price walking is when loyal customers who stay with the same insurance provider for years are gradually charged more for their insurance premiums at each renewal.

In January 2022, the Financial Conduct Authority (FCA) enforced a ban on price walking. Under new rules introduced, insurance providers must offer existing customers the same price they’d receive as a new customer.

Rebuild cost

The rebuild cost is the amount it would cost to rebuild your house from scratch if it was destroyed, for example, by flood or fire. It’s not the same as the market value of your home.

You’ll need to calculate the rebuild cost of your home when you apply for buildings insurance.

Rental contents insurance

Provides cover for your possessions if you rent your home. It’s the same as standard contents insurance – you just need to say you’re renting when you get a quote with us. Rental contents insurance caters for all sorts of living situations, whether you’re in a shared house, flat or student halls.

Single item limit

The maximum amount a single item can be worth before you have to declare it to your insurance provider. It typically applies to valuables like jewellery or art. When you get a quote through Comparethemarket, we ask you to add any individual items worth more than £1,500 to the quote. You may need to pay an extra premium to make sure you’re covered, but not always.


When the ground under your property sinks, causing the foundations to shift. Subsidence can be a problem in period properties, which often have shallower foundations. It’s good to make sure your home insurance covers you for subsidence as it can be very expensive to fix.

Sum insured

The total amount you can claim on your home insurance if you experience total loss – for example, if your house burns down and you need to completely rebuild and replace everything you own.

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 make sure you’re not under- or over-insured.

Trace and access

Trace and access cover will pay for a plumber to investigate the source of a leak. Without it, you’re only insured for the damage caused by the leak itself, not the disruptive and often expensive work that goes into finding the cause of the leak.


When the sum insured – the total amount you can claim – isn’t high enough to cover the value of your property or contents. Being underinsured may mean you pay lower premium, but it will also mean you can claim less. If your home is underinsured by 20%, your claim pay-out could also be reduced by 20%.


The process insurance providers use to calculate the cost of your premiums, based on the information you give them.

Unoccupied property insurance

Extra cover you’ll need to take out if your home is left empty for longer than your standard home insurance policy allows (this is usually 30-60 days).

Unoccupied home insurance can cover your home for longer periods, up to around 12 months. It means your home will still be covered if, for example, you’re going away for a long trip or are moving out while having building work done.


Items such as expensive jewellery and works of art. These will typically need to be listed individually on your insurance policy to ensure they’re covered to their full value.

Wear and tear

Damage to your property or its contents, due to usage or damage that’s happened over time. This could include marks on the walls, loose roof tiles, rotten window frames or appliances breaking down due to ageing – in other words, the damage you’d expect to see if a property is being used every day.

Compare home insurance

Now you know what the most common terms mean, comparing home insurance policies should be easier.

Terms, conditions and inclusions vary among insurance providers, so check each policy carefully to make sure you’re getting the right level of cover for your home. Compare home insurance with us today and see if you can start saving.

Compare home insurance

Get a quote in minutes and you could start saving

Get a quote
Get a quote in minutes and you could start saving Get a quote