In our last post, we covered 10 common questions about home insurance claims that customers may not know. In this blog, we’re looking at explaining common terms in home insurance.
Many home insurance policies, including ours, contain some personal liability cover as standard. It protects you against the cost of compensation claims made against you for bodily injury or property damage. These claims can often be incredibly expensive, which is why our home insurance includes £2 million worth of cover for it.
A ‘storm’ in this case is any period of violent weather including any combination of rain, hail, wind, snow, or lightning that is likely to cause damage to property. The key part is whether the weather would be expected to cause damage, which might be evaluated by things such as the wind speed.
An excess is the amount of the claim which you have to pay. For example, if your claim is for £500 and you have a £50 excess, your insurer will pay you £450. Policies will have a standard minimum excess, and you can usually reduce your premium by adding a voluntary excess on top of this, increasing the total amount you would pay at claim.
If you’ve got a leaking pipe, trace and access cover will pay for any damages from locating the source of the leak, such as demolishing walls or floors. It doesn’t always come as standard with home insurance, so make sure you check your policy wording, and it won’t pay for the cost to repair the pipe once the leak is found.
‘New for old’ means that your insurer will replace your lost or damaged belongings with new items of the same type and quality as the originals, or they will pay you the amount it would cost them to replace the items.
These are stipulations that the insurer has put in place based on your particular circumstances that must be met in order for you to continue being eligible for cover. A common example is a ‘security endorsement’, where you agree to having or installing a particular type of door/window lock on your property.
Lots of types of accidents can be covered under ‘accidental damage’ relating to either buildings, contents, or both. The easy answer to what isn’t covered under this section is things that aren’t an accident, such as deliberate damage, general wear and tear, mechanical/electrical breakdown, and often damage by pets.
Make sure to check your policy for any specific exclusions and to see if you have this cover included.
It usually means a natural disaster or something outside your control, like a flood/fire/theft. The term isn’t actually used in home insurance and your policy will cover these cases.
An Insurance Product Information Document (IPID) gives you a high level overview of an insurance policy in a standardised format, making it easier to compare with other policies.
The Financial Conduct Authority defines fair value as ‘a reasonable relationship between the price a customer pays for a product or service and the benefits they receive.’ Insurers are now required to ensure that products provide fair value to customers.
Hopefully you learned something new from these questions – check out for the rest of our blogs for more information and useful tips about insurance.
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