So, you need to get home insurance, but what does everything mean?
We know insurance can be confusing, especially if you’re a first-time buyer or you’ve never had to worry about it before. Even for seasoned homeowners, it can be a minefield of jargon that’s difficult to navigate.
But don’t worry, we’re here to help you understand some common insurance terms and their meanings.
Accidental damage
This does exactly what it says on the tin. If you have an accident, like spilling red wine all over your nice white sofa, your insurer may cover the cost if you have Accidental Damage cover included with your policy (or added for an additional premium).
There are two types of Accidental Damage cover:
- Buildings – for example, if you accidentally drill into a pipe when you’re putting a picture on the wall.
- Contents – for example, if you accidentally spill a pot of paint on the carpet while you’re redecorating.
Accidental Damage cover doesn’t include wear and tear, so if your favourite armchair is worn out and needs replacing, you’re not covered for that.
Equally, if damage has been caused deliberately, you won’t be covered.
Buildings insurance
Buildings insurance covers the structure of your home: the walls, floor, roof, doors and garages. It also includes fittings like baths, kitchens and gates.
If your property is hit by a storm, damaged by fire or flood, or targeted by vandals – buildings insurance could cover the cost of any repairs or rebuilding work you need to get done.
Contents insurance
‘Contents’ means the things you own: the stuff in your house that isn’t part of the house itself. Items like your TV, fridge, coffee machine, laptop and clothes are all covered under contents insurance.
So, if someone breaks in and steals your entire wardrobe or there’s a flood and all your clothes are ruined, you can claim on your contents insurance to help cover the cost of replacing them.
Excess
Excess is the money you have to pay towards the cost of a claim.
For example, if your sofa is damaged and your insurer agrees you need a new one, you’ll pay something towards it, and your insurance company will cover the rest.
There are two types of excess:
Voluntary excess
This a figure you choose when you take out your policy. Usually, if you decide to pay a higher voluntary excess, the annual cost of your insurance (or premium) is lower.
Some people choose to pay a higher excess to lower their insurance premiums, but you should think carefully before deciding how much voluntary excess to pay in the event of a claim, as you might be faced with an unexpected bill when you can least afford it.
Compulsory excess
This is a figure set by your insurer and usually depends on your personal circumstances. The total excess you will pay on a claim is often your voluntary and compulsory excess added together.
Please note that a higher compulsory excess applies to subsidence and escape of water claims than to other types of claims.
Home Emergency cover
Home Emergency cover is there if there’s a problem in your home and you need help right away.
For example, Churchill's Home Emergency cover includes a 24-hour helpline, so help is at hand for a range of emergencies, including:
- Heating
- Plumbing and drainage
- Electrical wiring
- Security (external locks and doors)
- Pest infestations
Check your policy documents to find out whether you have this cover. If your policy doesn’t include Home Emergency cover, you can often add it for an additional charge.
Optional extras
Optional extras are things you can add to your policy to give you a higher level of insurance (such as Home Emergency cover, above).
Some optional extras cover legal costs, personal possessions such as laptops and jewellery when you’re out and about, and accidental damage to your home.
Think about what kind of extras you might need and whether your insurer offers them.
Premium
When insurers say ‘premium’, they mean ‘price’.
Your premium is the cost of your insurance.
Subsidence
This is when the ground beneath your house begins to sink, taking your home's foundations with it.
It usually happens gradually over time, so you don’t notice it until it becomes a problem. It can cause the walls and floors to shift, meaning your house becomes unbalanced and destabilised.
It can cost a lot to put right, so having the right insurance to cover it is important.
Sum insured
Sum insured is the total amount you’re covered for under your policy. Please note that limits can apply to certain items and under certain types of cover.
