Have you come across a piece of insurance terminology you don't understand? Use this facility to find the 'plain English' descriptions to many commonly used and mis-understood terms.




Accidental damage cover

Insurance against damage to goods rather than loss or theft. Home insurance will replace possessions that are stolen or damaged by a fire or a flood, but it doesn't protect against more minor and frankly, more common hazards including errant pets, angry children or dangerous DIY-ers.


Act of God
Less miraculous than it sounds. The clause Act of God covers natural events that can't be foreseen or predicted. Insurance policies often exclude acts of God or acts of war, although they will cover natural disasters such as floods.


All risks
An insurance policy that covers all risks -- except those not listed under its exclusions. An all risks section of a home policy, for example, covers possessions such as cameras and watches when taken outside the house. Customers can specify certain possessions, such as a camera, as all risk on their policies.


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 car.


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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 come in on the act, offering recovery alongside car or bike insurance.


An independent intermediary who sells policies from several insurance companies. Insurance brokers have to be registered by law to use the name. Intermediaries using other names -- such as insurance consultant -- don't need to register, leading to confusion. The Government plans to remove the confusion by no longer policing insurance brokers.


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. 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 as standard.


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The term used to describe the process of getting an insurance company to pay out on the policy you bought from them.


Combined policy
In home insurance, a policy that covers both buildings and contents. Insurers usually offer a discount for combined policies making them look attractive. But it can still be cheaper to buy separate policies on the open market.


Contents insurance
Cover for household possessions. As a rule, contents cover insures anything that can be moved while buildings cover insures anything that can't, such as the windows or bathroom fittings. Contents cover doesn't always include jewelery and cash as standard.


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The amount of a claim a policy holder agrees to pay if he or she suffers a loss. An excess is often standard with some policies such as car insurance or travel. A voluntary excess cuts the cost of most insurance premiums.


Events not covered by an insurance policy. Typical exclusions include running a taxi service (for motor insurance), business equipment (for home policies) and dangerous sports (for travel).


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


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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.


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High-risk occupation
A job that makes a person more likely to have an accident. Travel and motor insurance can exclude people with some jobs, or charge higher premiums.


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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 Government tax charged as a percentage of insurance premiums.


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Knock for knock
An agreement between insurance companies to cut down on paperwork and legal action. Insurers pay for the costs of claims for their own customers, rather than claiming the money from the other party.


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Legal expenses insurance
Insurance that covers the costs of private legal action, for example disputes with neighbours or trades people. Usually sold as an add-on to home insurance.


Lloyd's of London
An insurance market organised into syndicates, which underwrites most types of policy.


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 that claims are all they seem.


Loss Assessor
A person who negotiates claims on behalf of policyholders. Not to be confused with Loss Adjustor, whose aim is precisely the opposite -- ie to reduce insurance company pay-outs.


Insurance people's term for being robbed, burgled, injured or in a car accident. A loss gives rise to a claim.


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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 or a history of subsidence in a house.


Mechanical breakdown insurance
MBI policies are better-known as extended warranties for cars. They are not really warranties at all, but insurance policies that pay out if certain faults arise with a car.


An insurance company that is owned by its policyholders.


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Named driver
A driver specified on an insurance policy who is not the vehicle's owner. Named additional drivers are a cheaper option than any driver insurance.


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, but they are also becoming available on home insurance.


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Personal possessions cover
Insurance for personal items such as money, jewelery and luggage.


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.


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


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


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


Professional Indemnity Insurance
Protects professionals, such as lawyers, against liability claims resulting from negligent work.


Public Liability Policy
Covers legal liability for injury or damage caused to others. Normally part of motor insurance and some home insurance policies.


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Roadside rescue
See breakdown cover.


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When an insurer pays a claim.


Single trip
Travel insurance that covers one holiday or business trip, for a specified length of time.


Sum insured
The maximum an insurance company will pay for a claim. Some policies, such as travel insurance, come with built-in sums insured. Others, such as home insurance, leave it for the customer to choose the appropriate level of cover, and work out the cost accordingly.


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Third party
A cheap and basic form of motor insurance. Third party covers damage to others' cars but not to your own. It's cheaper than comprehensive cover but not as much as it was. If you can afford comprehensive insurance, it is almost always a better option.


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When a customer takes out too little insurance, 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. So, if you insure a car for £8,000 when it's worth £10,000, they will only pay out £8,000 if it is written off. Even worse, if the car sustains more minor damage, the insurer will only pay four fifths of a claim.


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


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Warranty Insurance
Provides cover against the cost of repairs to broken-down household appliances.


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


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St Austell (Head Office)

Rowett Insurance Broking Ltd

1 Southview House

Enterprise Park


St Austell


PL25 4EJ


Freephone: 0500 401226

Tel: 01726 871144 / 69400

Fax: 01726 66911

Plymouth Office

Rowett Insurance Broking Ltd

3 Alexandra Road






Tel: 01752 774686

Fax: 01752 774694

Rowett Insurance Broking Ltd

Registered Office Address: 22 East Hill, St Austell, Cornwall, PL25 4TR

Registered in England and Wales No. 4998729