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Accidental Damage - The Accidental damage section can cover buildings and/or contents for accidents such as dropping of a vase.

All Risks - A term used to describe insurance against loss of, or damage to property arising from any fortuitous cause, except those that our specifically excluded in the policy wording.

Alternative Accommodation - This section of cover covers whilst the home cannot be lived in as a result of loss or damage covered by an insured event and gives cover for the cost of similar alternative accommodation for the policyholder and their family and pets.

Average - It is a policy condition making the insured liable for a proportion of a loss if the sum insured does not fully cover the value of the property insured. This can lead to a proportionate reduction in the amount paid on a claim due to the under-insurance.

Cover Note - This is the document issued to confirm details of cover and in some cases is a legal requirement, e.g. motor insurance.

Disclosure - The duty of an insured and his agent/broker to provide underwriters with all material facts prior to the acceptance of the risk.

Emergency Access - This section cover loss or damage to the buildings caused by a member of the emergency services breaking into the home to rescue someone, deal with a medical emergency or prevent damage to the home.

Excess - An amount which is borne by the insured in respect of a loss or claim. This can be voluntary to obtain a discount of premium or may be compulsory due to underwriting requirements.

Heave - This is the opposite of subsidence, which involves the movement of ground in an upward direction, which can cause damage to structures.

Indemnity - A basic principle which requires the insurer to place the insured in the same financial position after a loss as that which existed prior to the loss.

Insurable Interest - An insured must have an interest in the insured item that is recognised at law for a contract of insurance to be valid.

Long Term Agreement - Normally associated with property insurance, the insured agrees to renew the contract of insurance for a specified number of years on the original terms and, in return, the insurer offers a discount on premium.

Material Fact - Any fact which would influence an underwriter to accept or decline a risk or to calculate the premium is deemed a material fact and must be disclosed by the proposer.
Money - The money definition within an insurance policies will usually cover cash, cheques, traveller’s cheques, premium bonds and national savings stamps and certificates, postal and money orders, gift vouchers, tokens, luncheon vouchers, travel tickets, sports season tickets, phone cards and mobile phone top up vouchers.

New For Old - Normally associated with household contents insurance, it is where the insurer will pay for a claim based upon the replacement value of the item without taking into consideration any deduction for depreciation. Various conditions can be involved and each contract should be considered carefully.

Non Standard Construction - The description of a building which does not conform to the minimum specification of construction.

Peril - Describes a contingency which is covered by the policy and which relates to a possible cause of loss.

Proximate Cause - A famous law case describes proximate cause as active, efficient cause that sets in motion a train of events which brings about a result, without the intervention of any force started and working actively from a new and independent.

Subsidence - This is defined as the downward movement of the bearing soil on which a building rests. There are many possible causes for a bearing soil to fail. It is possible for subsidence to occur progressively over a long period, to occur over a very short period and then stop, and other variations on this theme.

Territorial Limits - The geographical limits within which an insurance operates.

Utmost Good Faith (Uberrima Fides) - A contract of insurance is a contract of utmost good faith, meaning that both parties to the contract have a duty to disclose all material facts relating to the proposed insurance. Any breach of this duty by the proposer may enable the underwriter to deny liability.

United Kingdom - England, Scotland, Wales, Northern Ireland, the Isle of Man and the Channel Islands.

Valuables - Jewellery, watches, furs, articles mad of gold, silver and other precious metals, gemstones, photographic equipment, pictures and other works of art.

Voluntary Excess - The insurer will grant a discount in premium if the proposer elects to pay the first portion of any claim himself. Any voluntary excess would be in addition to any compulsory excess which applies to the policy.

Warranty - This is a condition imposed by the insurer on a policy. A policyholder has to adhere to the conditions of the warranty for cover to operate and any breach enables the insurer to avoid a claim.


GLOSSARY OF USEFUL INSURANCE TERMS