Insurance glossary

Feeling baffled by insurance speak? The glossary below explains some of the terms you may not be familiar with.

Accidental damage = unexpected or unplanned damage or harm caused to property or people.

Block insurance = covers the cost of repairing damage to the external structure of a block of flats. The policy is usually taken out by the management company responsible for managing a purpose-built block of flats.

Buildings insurance = covers the cost of repairing damage to the structure and permanent fixtures and fittings of your property.

Certificate of insurance = a document provided to you by your insurer showing legal evidence of your insurance.

Combined insurance = home insurance which includes both buildings and contents.

Contents insurance = covers the cost of damage to, or loss of, personal possessions kept within your home.

Coverage = statement of what an insurance policy will and won’t protect in the event of a claim.

Escape of water = leakage from sources such as fixed water tanks, household appliances (e.g. washing machine) or pipes.

Excess = a contribution you’re required to pay towards a claim you make on an insurance policy.

Franchise = the minimum value that a claim needs to be before it can be paid. If the claim is greater than the franchise then the whole of the claim will be paid.

Guest = a person or persons — including their family and travelling companions — the host has agreed may stay at their insured property for an agreed period of time as set out under the terms of a written tenancy agreement, which may be the conditions set out by the sharing platform or under private terms.

Host = a person or persons named on the schedule of insurance, including their family and any permanent resident at the insured property, who have agreed to allow guests into their home.

Hosting activity = any activity that the host performs in order to fulfil their obligations during the agreed period in the terms of the written tenancy agreement with their guest(s); or any activity that the guest conducts under the terms of the written tenancy agreement.

Host guarantee = Airbnb’s own programme designed to protect hosts against damage done by a guest from a worldwide ‘pot’ of £600,000. It is not an insurance policy.

Host insurance = cover that protects you against incidents that occur while renting out your home or room on sharing platforms such as Airbnb.

Host protection insurance = Airbnb’s own programme providing primary liability coverage for up to £600,000 in the event of a guest’s claim of injury or property damage during a stay.

Indemnity = the promise of payment for loss or damage.

Intermediary = an insurance broker or company that arranges insurance on behalf of clients. They have specialist knowledge of, and skills in, handling insurance and are regulated by the Financial Conduct Authority.

Landlord insurance = an insurance policy that protects landlords against financial losses associated with rental properties.

Legal expenses = cover the policyholder against the potential costs of legal action brought either by or against the policyholder.

Legal liability = covers your liability to pay compensation for bodily injury to third parties or loss or damage to their property resulting from an incident relating to your hosting activity.

Liability = being held legally responsible for something, such as injury or damage.

Malicious damage = deliberate damage or harm caused to property or people. Insurers will often only cover this type of damage if there has been forced entry to your property.

Non-disclosure = when a customer does not tell their insurer something that might affect the cost of the premium.

Policy = a plan detailing the terms and conditions of an insurance contract, issued by an insurer.

Policyholder = the person in whose name an insurance policy is issued.

Premium = the amount paid for a contract of insurance.

Primary insurance = the main insurance policy covering your property; for example, home or landlord insurance.

Rebuild value = the amount it would cost to rebuild a property if it were damaged beyond repair.

Settlement = the payout received by the claimant upon resolution of a claim, in line with the stipulations of their insurance policy.

Sharing economy = Services in which people share their assets or skills, typically for a fee and via the internet.

Sharing platform = A website or app that facilitates sharing services. Examples include Airbnb, Onefinestay, Uber and JustPark.

Statement of fact = a document provided to you by your insurers which shows evidence of the information you have provided to the insurer for them to make a decision about your insurance price. This will usually include a summary of your answers from the quotation.

Sum insured = the maximum amount payable by the insurer in the event of a claim.

Tenant’s liability = an insurance policy that covers tenants from any damage to the landlord’s permanent fixtures and fittings.

The insured = the person whose property is insured or in whose name the policy is issued.

Third party = a person making a claim against the insured. In insurance-related terms, the first party is the insurer and the second party is the insured.

Top-up insurance = short-term insurance that gives you additional cover on top of your primary policy of insurance, such as for sharing activity through platforms like Airbnb or JustPark.

Uninsured loss recovery = the process by which expenses are recovered in the event of a no-fault accident; for example, the protection of your excess after an event that wasn’t your fault.

Uninsurable risk = a risk that an insurer will not take on; for example, an event that’s inevitable or illegal activity.

Umbrella insurance = an insurance contract between the platform (e.g. Airbnb, Onefinestay) and its insurer, meaning as their customer you have no legal rights on that contract and therefore no level of certainty that a claim will be dealt with.

Underwriter = an individual or company that evaluates the risk of insuring a person or asset and uses the information to set pricing for insurance policies.

Wear and tear = the amount deducted from claims payments, taking into account any depreciation in the insured item caused by its use over time.