You don't need to become an expert to make a good decision – but fifteen terms are worth knowing. With these, every quote and policy wording becomes readable. One sentence on each; deeper explanations are in the linked articles.
- 15 concepts, one sentence each – enough to read a quote.
- The full, searchable collection: the glossary from A to Z.
Concepts of assets and value
Asset group: the main categories of insured assets – building, machinery and equipment, stock. Sum insured: the upper limit stated for each asset group, the ceiling of the settlement. Reinstatement value (rebuilding, replacement value): the amount for which the asset could be repurchased or rebuilt new today. Actual cash value: the reinstatement value less an allowance for wear and tear. Underinsurance: when the sum insured is lower than the actual value – its consequence is the average (pro-rata) rule: the insurer may settle the claim in proportion to the underinsurance. Details: reinstatement value or actual cash value and underinsurance.
Concepts of the policy
Policyholder: the party who takes out the policy and pays the premium. Insured: the party whose assets the cover protects. Place of risk: the address where cover applies. Deductible: the portion of a loss that the company bears itself. Limit (sub-limit): a separate upper limit set for specific assets or types of loss. Exclusion: what cover doesn't extend to. More: policyholder and insured, place of risk, the logic of the deductible.
Concepts of claims
Claim notification: reporting the loss to the insurer – primarily via the insurer's claims line or online portal. Loss mitigation: the policyholder's duty to reasonably prevent the loss from spreading further. Loss adjustment (survey): the insurer's on-site or remote inspection to establish the loss. Depreciation: the value-reducing effect of wear and tear on the settlement. The process step by step: how claim notification works.
Two bonus concepts that often crop up in quotes: the waiting period (for certain covers – flood, for instance – protection only takes effect a set time after inception) and loss-mitigation costs (reasonable expenses incurred to reduce the loss, which the wording typically treats as part of the settlement). Both can be read precisely from the wording.
How to use this list
Keep this handy when reading a quote or policy wording: if a sentence isn't clear, chances are one of the fifteen concepts above is hiding in it. If a term isn't here, you'll find it alphabetically in the full glossary – and for international correspondence, the HU-EN-DE mini-dictionary gives a quick translation.
And if a term is unclear in your own policy – for example, if it's not obvious at what value the machinery is listed – don't let the glossary decide it: in the 20-minute review, we go through your actual policy.
Have a question specific to your premises? Book a free 20-minute site survey consultation →
