Every business has its own jargon, but insurance definitions can be especially tricky to understand. To empower your decisions, we've created this glossary of essential insurance terms with straightforward definitions.
A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
Accidental damage
When damage occurs to your property (and it’s not deliberate), we call it accidental damage. Examples include spilling blackcurrant juice on your carpet or putting your foot through the floor of the loft.
Act of God
A natural disaster is an Act of God – an event beyond human control, like lightning striking a tree that damages your car or sudden flooding invading your home.
Actuaries are risk management experts who use maths and statistics to analyse and determine the premiums we set for our insurance products. It’s easy to confuse an actuary with an adjuster, but their roles are distinct.
Additional premium
An additional premium refers to a charge added to your insurance policy in certain situations due to an increase of the the insurer’s risk. For instance, changes made to your policy (i.e. adding an additional driver or building a conservatory), undisclosed claims or an undisclosed risk later found as a result of a claim could all lead to additional policy charges. How to get cheaper insurance for younger drivers.
The adjuster’s role is to investigate and settle individual claims. A loss adjuster or a claims adjuster deals with risk, just like an actuary. However, an actuary deals with long-term risk while an adjuster handles immediate risk.
Agreed value
An ‘agreed value’ policy is where you and the insurer agree to a fixed payment for your vehicle if it’s proven to be a write-off or totally lost through theft. You can choose an agreed valuation when you take out a car insurance policy, but you need to prove it’s worth the sum.
Annual premium
Annual premium is the price you pay to an insurer every year for each policy you take out.
Assistance cover
At Ageas, we offer an optional cover, commonly known as ‘assistance cover’, for various situations, including home emergency cover for emergencies such as boiler failures and urgent lock damage, and breakdown cover for vehicles (roadside assistance).
Buildings insurance covers the structure of a building, such as its walls, floors, roof and ceilings, as well as insuring any permanent fixtures and fittings. It will cover you for repairing and rebuilding costs if your home is damaged or destroyed. Find out more about the Ageas buildings insurance.
Also read more about contents insurance.
See insurance broker.
Certificate of insurance
A certificate of insurance is an official document that proves your level of cover. It summarises the main conditions of your policy, including the name of your insurer, the property or vehicle it covers, the type of cover and how long the cover lasts.
You ’make a claim’ when you call your insurance provider for help. In home insurance, it could be for issues such as a burglary, damage from a storm or other incidents affecting your property.
Contents insurance protects any items you or your family own or are responsible for and includes personal belongings. Items such as clothes, furniture, valuables, electronics, appliances, soft furnishings, garden cover and contents in outbuildings are some examples of what is covered under general contents insurance. Find out about building insurance.
Comprehensive car insurance insurance provides policyholders with protection against damage to themselves, their vehicle, or other people and property, even if the accident is their fault. See third party only and third party fire and theft.
Your insurer may set a mandatory, non-negotiable sum that you pay towards the cost of a claim, known as compulsory excess in the insurance world. See voluntary excess.
Cooling off period
The cooling-off period is a set time, usually around 14 days from the date your insurance policy starts, during which you can cancel it and only pay for the days your policy was active, with no extra charges unless a claim has been made.
Current market value
In insurance, the market value refers to the estimated resale price of an item, such as a TV, at the time of loss, taking into account its age and condition. Essentially, it represents the current second-hand value of the item.
Dependant
A dependant is the insurance term for an individual in your family, such as your child, husband, wife, or grandparents, who relies on you financially or for providing care.
Depreciation
When your belongings lose value after purchase, it’s called depreciation. Losing value due to age, and wear and tear, affects how much your policy will pay to replace the item. With Ageas home insurance, if you’ve added contents cover, we replace old items with new ones without any deductions for wear and tear.
Duty of care
Duty of care refers to the legal or moral obligation of the policyholder, whether a property owner or car driver, to avoid harming others by acting responsibly.
Endorsement
An endorsement is a change to your insurance policy that adds, or removes certain parts of your cover. It is used to tailor a policy to better suit your needs and reflect changes in your circumstances. For example, an insurer might add an endorsement to specify that the policy requires your home to have a burglar alarm installed.
Escape of water
An escape of water occurs when leaks develop from home appliances, such as the boiler, washing machine, bathroom pipes, or water tank.
Exclusion
A risk, circumstances or item not covered by your insurance policy. As an example, learn what we exclude from an escape of water claim.
Excess
The specific amount you must pay towards the cost of your claim is known in insurance as a policy excess. The excess may be voluntary or compulsory, with the amount depending on the type of claim you make.
A fault claim is when you are responsible for an accident or when your insurer can’t recover the costs from someone else, either because no one else was involved or it’s not clear who caused it.
If you make a fault claim on your car insurance, it can reduce your no claims discount, while a non-fault claim usually doesn’t. However, both types of claims can still affect your premium because insurers see any claim as a sign you might be more likely to make another in the future. A non-fault claim tends to have less impact, but your price could still go up.
Fronting is a fraudulent practice in which you falsely claim to be the primary driver of a vehicle to lower your premiums. A common situation is where a parent takes out a car insurance policy with their child as a named driver, when actually the child drives it the most.
General insurance
Products other than life insurance cover are known as general insurance. Our car, van, home, travel and pet insurance products come under this insurance definition.
Holiday insurance
See travel insurance.
Home emergency cover
This is an optional cover available to add to your home insurance policy.It protects against unexpected emergencies, such as burst water pipes , central heating break down or the removal of wasp nests from your home.
Inception date
The inception date refers to the date your insurance policy starts.
Indemnity can have a few meanings in insurance including:
- Legal indemnity insurance – when buying or selling a house, it’s a one-off policy that protects against a specific legal issue with the property that cannot be quickly or cheaply resolved (i.e. issue with the property’s title or neighbour bringing a legal claim). It does not cover any physical damage to the property like a home insurance policy.
- Indemnity cover – for a home insurance policy, it refers to the principle of compensating the policyholder for the actual cash value of any damaged or lost belongings. This differs from a ‘new for old’ policy where the old items are replaced with new ones without any deductions for wear and tear.
Insurance
Insurance is a way to protect yourself from big costs if something goes wrong. You pay a set amount, called a premium and in return, the insurer helps cover the cost in the event you experience damage to your home, have a car accident or have an unexpected loss. It's there to give you peace of mind and help you get back on your feet.
An insurance agent is someone who represents multiple insurance companies, aiming to sell their unique products and services. They contract exclusively with those insurers.
An insurance broker works for customers and, unlike an agent, is not tied to any particular insurance firm. They can offer you advice and compare plans. If you bought Ageas car insurance through a broker, please contact them with any queries.
Insurance company
An insurance company is also known as an insurer or an insurance provider. Insurance companies like Ageas create insurance products and set premiums that you pay in return for the insurer taking on risks.
(Thatcham) insurance group
A Thatcham car insurance group is a rating system used by insurers to help determine the cost of your car insurance. Every car model in the UK is placed into a group from 1 to 50, with Group 1 typically being the cheapest to insure and Group 50 the most expensive. These groups are defined by the Association of British Insurers (ABI) and Lloyds Market Association (LMA), and they use things like the car’s value, performance, safety features, repair costs, and how likely it is to be stolen to determine the associated risk and therefore the cost of insuring these cars.
This system is currently being transitioned to a vehicle risk rating system where each car will be scored from 1 (indicating low risk) to 99 (indicating high risk).
More insurers are now using their own vehicle classification, reflecting their unique claims data and underwriting approach. This means your premium could vary between insurers based on this alone even if everything else stays the same.
Insurance policy
It is the legally binding contract between you and your insurer where you as the policyholder pay regular fees (premiums) to the insurance company in exchange for financial protection against specific risks or losses, such as damage to your car or home. It includes the terms, conditions and exclusions, outlining the risks covered, the amount of coverage and the policyholder’s obligations to the insurer.
Insurance risk
Insurers define insurance risk as the chance of an undesirable event happening. The people who calculate the probability of events like fire and flood are actuaries Other professionals will determine how to manage the risk and decide whether to issue insurance accordingly.
Intermediary
An intermediary is an insurance term referring to individuals or entities that provide insurance services to consumers and companies. Examples include insurance brokers and insurance agents.
Legal expenses
Also known as legal costs or legal cover, this is an optional add-on that can supplement your existing home insurance policy. You can obtain insurance policies that cover legal expenses, including professional fees for your claim, whether you're pursuing someone or someone is making a claim against you. Explore our optional cover, Ageas Home Legal Expenses.
Liability
The insurance definition of liability is being legally responsible for causing an injury to a person or damaging their property. When making an insurance claim, the insurer will usually try to determine the party liable for the event which may affect the way the claim is processed and the final result.
Loss adjuster
As insurers, we ask loss adjusters to determine the extent of damage caused by an event and the cost of rectification if we agree to your claim.
The main driver is the individual who drives the car the most. See also named driver and fronting.
Market value refers to the amount your insured item (car or property) would sell on the open market at the time of the claim, just before any damage or loss occurred. This is not to be confused with the rebuild costs which are used to estimate your building’s sum insured for home insurance. See buildings insurance.
Malicious damage
Malicious damage is the insurance term for criminally and deliberately damaging someone’s property, such as scratching your car or vandalising your home.
Misrepresentation is providing false, misleading or incomplete information to an insurer when applying for a policy. This is typically viewed as not taking reasonable care to supply accurate and complete answers to all questions.
This misrepresentation must be material, meaning the insurer would have acted differently if they’d known the truth such as charging a different premium or declining coverage. As a result of misrepresentation, any claims you make may be affected or your policy could be voided entirely. See non-disclosure.
This insurance term refers to a policy feature that replaces damaged or stolen items with brand new equivalents in the situation of a home insurance claim, regardless of the original item’s age or condition. This is in opposition with the indemnity cover that only pays the market value of an item.
A named driver on a vehicle insurance policy is an individual, other than the policyholder, who is authorised to drive the insured vehicle. They may not always get the same level of cover as the policyholder. This could be a partner, relative or friend. See main driver.
No claims discount (NCD) or bonus
When it comes to car insurance, a no claims discount is offered by insurers for not making any claims over a certain number of years. To build your no claims discount (also known as a no claims bonus), you’ll need to drive your own car under a policy in your name.
This is when you leave out a vital piece of information when taking out a insurance policy, that might affect the insurer’s decision to provide cover or the price of the policy. Examples include not disclosing to your insurer that the property has flooded or failing to report a car’s change of use from personal to business. This could lead the insurer to reduce the amount you can claim on that policy and even void your policy. See misrepresentation.
It’s a type of insurance claim where you weren’t responsible for what happened. That means your insurer can recover the full cost of your claim from the person who caused the incident or from their insurer. This person is called the ‘liable party’. This is the opposite of a fault claim.
A non-fault claim usually won’t affect your No Claims Discount (NCD). However, it might still impact your premium when it’s time to renew. That’s because insurers use data and statistics to assess risk, and having a previous claim, even if it wasn’t your fault, can suggest a higher level of risk. For example, it might mean you’re driving in a higher-risk area.
Non-standard construction
Does your house have a thatched roof? Perhaps it’s prefabricated or built with a timber frame. In insurance, we refer to properties like these that are not built according to traditional construction standards as non-standard construction.
Overinsured
A person who is overinsured has bought insurance coverage for more than the actual value or necessary amount needed for the property, belongings, car or travel they want to insure. This results in unnecessarily high premiums and potentially no added benefit in a claim, as the insurers only pay up to the true value of an item.
Period of insurance
A period of insurance is the duration for which an insurer provides cover for you or your belongings under the terms of your policy.
Personal accident
This is typically part of the standard car insurance policy and it covers an unexpected incident resulting in life-changing injuries (i.e. paralysis after a car accident), disability or death. Learn what to do if you’re involved in an accident.
The definition of policy schedule is an explanation of the coverage your policy provides, including the name of the policyholder and the type of cover offered. Some insurers might provide a statement of fact instead.
The person who takes out the insurance policy and has full control over it. Because they have a financial interest in what’s being insured, like a car or home, they’re also the person who enters into the legal agreement with the insurer.
The premium is the amount you pay for your insurance policy. You can usually pay it every month or pay the full yearly amount upfront. Paying your policy premium on a monthly basis usually incurs interest.
Property
It refers to the buildings (including roof, walls, windows and permanent fixtures such a fitted kitchen units, bathroom suites and fitted wardrobes) and the land within its boundaries (patios, conservatories and enclosed outbuildings). See what’s covered under garden insurance.
Proportionate remedy
When you take out an insurance policy, it’s important to give accurate and complete information. This helps your insurer decide whether to offer you cover, and on what terms.
If you accidentally leave something out or make a mistake (known as unintentional misrepresentation) your insurer may still pay your claim. However, they might reduce the amount they pay or adjust the terms of your policy. This is called a proportionate remedy.
Protected no claims discount
Also called no claims bonus protection. A protected no claims discount means you pay an additional amount to protect your no claims discount should you have an accident and a claim arises. However, your premiums may rise. Read about this optional cover at Ageas.
Public liability
Public liability covers the legal costs and compensation you or your family may be required to pay if you're found legally responsible for an accident. This includes incidents that result in someone’s death, illness, or injury, as well as damage to another person’s property.
Rebuild value
The rebuild value or rebuild cost are insurance terms meaning the same thing: the total cost of rebuilding a property after its destruction, including building materials and labour, but usually not including land value. See Market value.
Reimbursement
It’s the process when an insurer refunds you for out-of-pocket work, but only if these costs are covered by your policy. This could include emergency repairs to a property that your insurance covers.
Reinstatement
Reinstatement is when the insurer restores your cover after it has lapsed, typically because the policyholder missed a premium payment. It can also mean restoring a building to its original condition following a loss, depending on the policy terms.
Renewal
Renewal occurs when your insurer contacts you to inform you that your policy is about to end and invites you to renew it. Read our guide to your car insurance renewal quote.
Replacement cost
The replacement cost is the amount it would take to replace or rebuild an insured item - like a car, home, or personal belongings - with a new one or suitable replacement without deducting for depreciation.
Settlement
A settlement is the final amount of money the insurer agrees to pay the policyholder once a claim is reviewed and approved.
When applying for insurance, the statement of fact captures the information you provide to your insurer or broker about yourself, your car, property or business. It determines the insurance coverage offered. Locate your statement of fact in your online account.
This insurance term refers to the downward movement of building foundations due to clay shrinkage, tree roots, water erosion, or shoddy construction. Learn how to spot the clues that indicate subsidence.
Sum insured
The sum insured is the most your insurance company will pay out, whether it’s the cost to rebuild a similar property or the amount required to replace an item like a sofa at today’s market value. It is important that you check your policy meets your needs to avoid underinsurance of your property or valuables. Read our article on calculating your home contents.
A third party car insurance policy or third party only (TPO) is the minimum insurance you can have to drive legally. It covers the damage done to another person’s vehicle or property while you are driving and personal injury claims made against you (e.g. by another driver or their passengers). TPO does not cover your injuries or damage. Nor does it cover damage to your car due to fire or theft.
This type of car insurance offers a mid-level of protection sitting between third party cover and comprehensive insurance. It provides all the coverage included in TPO policies, as well as covering your car if damaged by fire or stolen. See fully comprehensive insurance.
Travel insurance or holiday insurance is a type of insurance policy that typically covers single and multi-trips abroad or at home in the UK.
Total loss means that an insured item is so uneconomical to repair that it exceeds its current market value. It’s also known as a ‘write off’. See what happens when a car is written off.
Underinsurance refers to the situation when your cover is not enough to cover the full cost of a loss. This means that if you need to make a claim, you might need to pay some costs yourself. It can happen when you underestimate the value of your property, contents or car.
Underpinning
Primarily a construction term, underpinning may be essential to strengthen a building’s foundations if they have shifted due to subsidence or to prevent future issues. You should declare underpinning when you apply for home insurance.
Underwriting
Underwriting is the process used by insurers use to evaluate risk and determine insurance cover prices, terms, and conditions.
Void (a policy)
In insurance, voiding a policy or cancelling it usually happens when a policyholder has misrepresented the information they provided to the insurer. All insurers require full disclosure from applicants. See misrepresentation.
It is an optional amount of money you agree to pay towards an insurance claim, in addition to a compulsory excess set by insurer. When making a claim, the total amount you pay is the sum of the compulsory and voluntary excess, with the insurer covering the remaining cost.
Weather claim
A weather claim is a term that means claiming on your insurance when your home or car is affected after a storm, flooding, temperature drop or extreme heat. Browse our Weather Hub for tips on how to protect your home and car.
A write-off is insurance terminology for a vehicle that is beyond repair or would cost more than its worth to put right. See total loss. Learn more about our car insurance.