Our website has been designed with simplicity in mind, avoiding 'jargon' as much as possible and offering brief explanations of the technicalities used. We have even got a jargon buster below:

Jargon Buster - Insurance terms explained

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

A

Accidental damage cover
Insurance against accidental damage to property rather than specified perils.

All risks
An insurance policy that covers all risks (except those not listed under its exclusions).

Annual policy
For travel, an insurance policy that applies all year round rather than just for a single journey or holiday.

Any driver
Insurance that allows anyone to drive a vehicle, not just the owner. But any driver policies only cover drivers if they have permission to use the vehicle and hold an appropriate driving license.

Average
This means that insurers pay only that proportion of a loss which is commensurate with the premium they have received. Thus, if the property concerned is insured for £2000 but at the time of the loss is valued at £4000, insurers will only pay 1/2 of the amount of the loss.

B

Breakdown cover
A policy that provides recovery and repair services for motorists. Traditionally, breakdown services were provided by the RAC and the AA, but more recently insurance companies have extended the market, offering recovery alongside car or motorcycle insurance.

Broker
An independent intermediary who sells policies from several insurance companies.

Buildings insurance
A policy that covers the fabric of a building against damage from hazards such as flood, fire or subsidence. A policy will pay to rebuild or repair the property following loss. Buildings insurance is usually a requirement if you have a mortgage.

Business equipment
Anything used for a business is normally excluded from a standard home insurance policy. This can cover valuable items such as faxes and computers. If you work from home, it pays to check the exact conditions of a policy to make sure you are covered. Computers that are not used for business -- for example for games -- are usually covered under your home insurance.

C

Claim
The term used to describe the process of getting an insurance company to meet a claim on the policy you bought from them.

Combined policy
As an example in office insurance, a policy that covers both buildings, contents and liability. A combined policy can be more convenient and easier to deal with as you have everything you need in one place with one renewal date.

Comprehensive
For motor insurance, a policy that covers damage to the owner's vehicle as well as to others'.

Contents insurance
Cover for your machinery, fixtures, contents and stock.

E

Employer's Liability Insurance
This cover is put in place to protect you in the event that an employee is injured whilst carrying out their duties.

Excess
The amount of a claim a policyholder agrees to pay if he or she suffers a loss. An excess is often standard with some policies such as motor insurance or travel. A voluntary excess cuts the cost of most insurance premiums. Also known as a deductible.

G

Green Card
A document issued to those motoring abroad as evidence that they have the legal minimum insurance cover required. Not essential for European travel, because minimum legal cover is automatically included in UK policies.

H

High-risk occupation
A job that subjects a person to a higher risk of having an accident. Travel and motor insurance can exclude people with certain occupations, or charge higher premiums.

I

Indemnity
The principle by which insurance policyholders are put in the same financial position after a loss as they were immediately before it.

Insurance Premium Tax (IPT)
A tax charged as a percentage of insurance premiums.

K

Key Man Insurance
Every business has key individuals that are vital, and whose death or disability would cause a financial loss - did you know you could insure them?

L

Legal expenses insurance
Insurance that covers the costs of private legal action, for example disputes with neighbours or trades people.

Loss adjuster
An insurance specialist who deals with large or complicated insurance claims. The loss adjuster works on behalf of the insurance company. His or her job is to check claims.

Loss Assessor
A person who negotiates claims on behalf of policyholders. Not to be confused with Loss Adjuster.

Loss
Insurance industry term for being robbed, burgled, injured or an accident. A loss gives rise to a claim.

M

Material fact
Information that would affect an insurance company's willingness to accept a policy, or the premium it would charge. Failing to disclose a material fact could invalidate a policy. Typical examples include previous driving convictions, a history of subsidence in a house, change in business activities and criminal prosecutions.

Mechanical breakdown insurance
MBI policies are better known as extended warranties for cars. They are insurance policies that pay out if certain faults arise with a car.

Mutual
An insurance company that is owned by its policyholders.

N

Named driver
A driver specified on an insurance policy. Named additional drivers are a cheaper option than any driver insurance.

New-For-Old
Cover for property where anything lost or destroyed is replaced with a brand new item, with no deduction for wear and tear. Also called "replacement as new".

No claims bonus
A discount that grows for every year without a claim. No claims bonuses are most common with motor insurance.

P

Pluvius Insurance
Covers against losses arising as a result of bad weather, principally rain. Also known as "event insurance". Typically taken out for spectator events.

Policy
The document that details the contract between the insurer and the policyholder.

Policyholder
Person to whom the insurer issues the policy. Normally this is the person who benefits from an insurance policy.

Premium
The amount a customer has to pay in return for insurance cover.

Product/Sales/Servicing Indemnity
The key type of insurance is indemnity. If you sell products or services then this insurance could be of interest to you.

Professional Indemnity Insurance
Protects professionals, such as lawyers, accountants or surveyors against liability claims resulting from negligent acts.

Public Liability Policy
Covers legal liability for injury or damage caused to others.

R

Roadside rescue
See breakdown cover.

S

Settlement
When an insurer settles a claim.

Sum insured
The maximum an insurance company will pay for a claim. Some policies come with built-in sums insured. Others leave it for the customer to choose the appropriate level of cover.

T

Third party only
A cheap and basic form of motor insurance. Third party covers injury to others or damage to their cars but not to your own. It's less expensive than comprehensive cover. If you can afford comprehensive insurance, it is almost always a better option.

U

Under-insurance
When a customer takes out insufficient cover, paying smaller premiums than they should. Insurance companies take a dim view on under-insurance, and they will almost always scale down a claim as a result.

Underwriter
Person employed by an insurance company who decides whether to accept a risk and calculates the premium to be charged.

W

Warranty Insurance
Provides cover against the cost of repairs to appliances that break-down.

Write-Off
A damaged vehicle, which is not repairable, or one which would cost more to repair than the vehicle was worth before the damage occurred. Also known as a "total loss".