Glossary of Terms

Please note: All terms are intended for general guidance only. As each insurer may have a different definition, you should check your policy wording before you complete your application.

A

Accident, Sickness and Unemployment Insurance

This is an insurance policy that provides a tax-free monthly income if you are unable to work as a result of accident, sickness or unemployment and pays out for a maximum of 12 months (as shown on your certificate of insurance), in the event of a claim. With Unemployment cover, there is an 'Initial Exclusion Period' at the start of a Policy where you cannot claim.

Accidental Damage

Accidental damage is damage caused by accident to your buildings or contents by you, your friends or family or someone renting your holiday home from you (and a rental agreement is in place). Examples of accidental damage are dropping something on your kitchen floor which breaks a tile, knocking over a glass of wine and staining your carpet or a ball going through your window.

Application

This is a declaration of information made by a person who is applying for a policy, product or service. An Application for an insurance policy provides information and is used to declare the amount and type of cover that you are applying for. It is also used by the insurer to assess the risk of the applicant.

You should be very careful to ensure that all information is disclosed accurately when applying for insurance as a Policy may not pay out in the event of a claim if a non-disclosure is found.

Back to top

 

B

Buildings

The property and its permanent fixtures and fittings, swimming pools, paths, drives,
terraces, walls, hedges, gates, and fences all contained within the boundaries of
the Land.

Back to top

 

C

Consorcio

You may come across this if you have a second home in Spain. Consorcio is cover for extraordinary events, such as earthquakes or terrorism, included in accordance with the Insurance Compensation Consortium.

Contents

Possessions and contents are the Items in your home, and personal belongings that you may carry with you which you own, are legally responsible for or that belong to domestic employees who live with you. It does not include anything insured by any other insurance policy and securities (stocks and shares) and documents of any kind. Motorised vehicles, aircraft, boats, boards and craft designed to be used on or in water, caravans and trailers, and the parts, spares and accessories of any of these are also not classified as contents.

Make sure that, if appropriate, items used for business or professional purposes or any living creature are covered under another insurance as they also do not count as contents.

Contract Worker

Employed on a contract for a specific term or undertaking. Different insurers will have different eligibility criteria concerning the minimum length of contract and number of times the contract has been renewed. Further information regarding contract workers can be found in the relevant Policy Wording.

Back to top

 

D

Back to top

 

E

Excess Period

For most insurance policies, an excess is the amount you would need to pay yourself if you made a claim.

For payment protection policies, a waiting period is the time period that you have to wait before a claim is paid. Sometimes the policies will pay back to day one of the claim, so long as you have been off work for the full waiting period. Other times it will only pay back to the end of the waiting period.

The different options for the waiting periods/excess are:

30 days waiting, paying back to day one
30 days excess, first payment on day 61 pays back to day 31
60 days excess, first payment on day 91 pays back to day 61
90 days excess, first payment on day 121 pays back to day 91
180 days excess, first payment on day 211 pays back to day 181

If you choose a longer excess period your premiums are usually cheaper as a result

Employed

This means your employer deducts pay as you earn (PAYE) tax and national insurance (NI) contributions from your gross income and your work is of a permanent nature - or you work under a fixed term contract or sub contracting basis and your sole source of income comes from that contract. You must have been in continuous permanent employment at the policy start date for a minimum of 6 months. Terms for contract workers vary between insurers and you should always check the Policy Wordings for further details.

Employed/Employment/Work

Permanent paid employment, including self-employment, of at least 16 hours per week.

Exclusions

These are conditions that are put on an insurance policy and show the circumstances under which a policy will not pay out.

Back to top

 

F

Back to top

 

G

Back to top

 

H

Back to top

 

I

Income Protection

This is a policy that pays out a monthly income to the insured if he/she is unable to work due to accident, sickness or unemployment for a specified number of days. Income protection cover is available for both employed and self-employed. It can also be available for contract workers, however it is strongly recommended that you carefully read the policy wording for the latter. You can cover up to a maximum of £1,500 or 50% of your gross monthly income, whichever is the lesser, however the benefit is paid free of tax.

Initial Exclusion or Qualification Periods

This refers to the period of time you will have to wait before you can start to receive claim benefits on payment protection policies. 'Initial exclusion periods' or 'qualifying periods' are frequently used for income protection insurance and mortgage payment protection policies whereby you cannot make a claim until the policy has been live for a specified time period. 'Initial exclusion periods' or 'qualifying periods' are almost always set for unemployment policies, as this helps to avoid people taking out a policy and claiming for an expected redundancy. The 'initial exclusion period' or 'qualification period' will be specified on your certificate of insurance.

Back to top

 

J

Back to top

 

K

Back to top

 

L

Back to top

 

M

Money in Lieu of Notice

This is when you receive payment from your employer instead of working your notice period. You will still pay tax and national insurance on this money just as you would with your normal wages. If you make a claim for unemployment and you receive a payment in lieu of notice, the excess period won’t start until the payment in lieu of notice period has ended.

Monthly Benefit/Cover Amount

This is the amount of benefit provided on a payment protection cover policy. This amount is paid out in the event of a valid claim and is shown on your certificate of insurance. It is the maximum benefit that you will receive for each month you are claiming, up to a maximum of 12 months as shown on your certificate of insurance

Mortgage

This is a loan taken out through a recognised bank or building society on the residential property that you occupy.

Mortgage Protection

This is a policy that pays out a monthly income to the insured if he/she is unable to work due to accident, sickness or unemployment beyond a specified number of days. Mortgage protection insurance is available for both employed and self-employed customers. It can also be available for contract workers however it is strongly recommended that you seek advice for the latter. You can cover your monthly mortgage repayments plus up to an extra 25%. The total cover cannot be more than £2,000 or 50% of your gross monthly income, whichever is the lesser.

 

Back to top

 

N

 

Back to top

 

O

Occupation

This is the job, career or profession that you do for a living. It is a term used to briefly describe the work, tasks and activities that you do for your job. Many people's occupations change during the course of their lives and are often guided by their education, personality, past work experience and training.

 

Back to top

 

P

Policy Wordings

This is usually in the form of a pre-printed booklet which details the terms and conditions of the policy. The policy wording is presented at point of quote and is present throughout the sales process. It is vital that you read and understand the policy wording to ensure that you are fully aware of the terms and conditions of the policy, including any exclusions which may apply. The policy wording forms part of your policy documents along with your schedule of insurance.

Pre-existing Condition

This is any disease, illness or injury including related medical conditions for which you have received a consultation, medication, monitoring advice or treatment, or, you were made aware of or had experienced symptoms of (whether or not a diagnosis had been made) in the 12 months before the start date or the amendment date as shown in your schedule.

Premium

This is the amount payable for an insurance policy and is paid monthly to keep the contract running. The premium payable differs between insurance policies and can often be determined by age and cover type, (accident & sickness only, unemployment only or accident, sickness & unemployment combined).

Back to top

 

Q

Back to top

 

R

Redundancy Pay

This is a lump sum paid to you by your employer when you are made redundant. You can still register with the Job Centre Plus if you have received redundancy pay. Redundancy pay will normally not affect your ability to claim on payment protection insurance.

Rental agreement

A rental agreement is documentary evidence that you have agreed a rate and a rental period with the persons staying in your home, and can be as simple as an email confirmation to your guests.

Responsabilitée civile propriétaire

You may come across this if you have a second home in France. It translates to civil liability insurance which provides cover if something happens to your home that affects other people, for instance your chimney falling on the neighbours’ roof.

Reviewable Premium

This is a term which specifies that insurance premiums can be reviewed. With reviewable premiums, your payments may increase, stay the same or decrease after the company makes the review. Insurers must give you notice in writing to your last known address before implementing any new premiums. Further information regarding review of premiums can be seen in the Policy Wordings.

 

Risk

This is a term used by insurance companies, whereby the chance of the person insured claiming on an insurance policy is evaluated. If a person is deemed to be a high risk, it can mean that the insurance policy is offered with an exclusion (specified situations will not be covered) or is declined.

Back to top

 

S

Schedule of Insurance

This is the part of the Policy Documents where the policy is made personal and specific to you and together with the Policy Wordings they form the Policy Documents.

Self-Employed

This means you are classed as schedule D for income tax purposes and you are required to make Class 2 National Insurance contributions. You are also classed as self-employed if you are a proprietor, a controlling director or you are a relative of a proprietor or controlling director of the business you work for. A proprietor means you own (alone or with others - except as a shareholder), the business you work for. A controlling director means you own more than a specified minimum percentage of the issued shares of the business you work for. Further information regarding the self-employed can be seen in the Policy Wordings.

Back to top

 

T

Terms/Terms & Conditions

These are the conditions on which the policy is offered by the insurers. The terms & conditions of the policy are also known as Policy Wordings.

Back to top

 

U

Underwriting

This is the process that insurance companies use to assess applications. The information provided in an application allows insurers to determine if the applicant will be accepted for their desired policy and if so whether they are accepted on special terms, i.e. with any exclusions.

Unemployed

This means you are entirely without work due to one of the following reasons: If you were employed, your employer has totally and permanently terminated your job due to circumstances entirely beyond your control; If you were self employed, your business has totally and permanently stopped trading due to circumstances entirely beyond your control, or the control of any co-director or partner in the business and you have declared this to your local tax office; If you have ceased to work to become a full-time carer for a member of your immediate family and are in receipt of Carer's Allowance.

Unemployment

This means you have no paid work or temporary work and have a Jobseekers Agreement with the Department for Work and Pensions in the UK.

Unoccupied

For the holiday home product available through Towergate Insurance, it means either insufficiently furnished for normal occupation, or furnished for normal occupancy but has not been lived in for more than 60 consecutive days (or 7 consecutive days between 1st November & 31st March inclusive). Please note that this term varies between different home insurance policies, so make sure you check out the policy wording.

Back to top

 

V

Valuables

Stamp, coin or medal collections, pictures, other works of art, items of gold, silver or any other precious metal, jewellery or fur.

Back to top

 

W

 

Back to top

 

X

Back to top

 

Y

Back to top

 

Z

Back to top