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Understanding Insurance Policy Wording

Betterment, buildings insurance, contents insurance, Insurance Claims, Insurance Jargon, Insurance Policy Key Terms, Loss Adjuster, Loss Assessor, Repudiation, Trace and Access, underinsurance

Understanding Insurance policy wording is crucial because it dictates the terms and conditions of the coverage you receive. An insurance policy is a legal contract between the insurer and the insured. It outlines what is covered, to what extent, under what circumstances, and what is excluded. Not fully understanding these details can lead to misunderstandings and potentially significant financial losses in the event of a claim. For instance, you may believe you're covered for a specific incident, only to discover that it's an exclusion in your policy. Moreover, the policy wording may contain specific conditions and obligations you need to fulfil to maintain your coverage, such as certain safety measures or reporting requirements. Thus, having a thorough understanding of your insurance policy wording ensures you are aware of your rights, responsibilities, and the level of protection you have, enabling you to make informed decisions and avoid unpleasant surprises.

confused look at insurance policy document

Ab Initio

Ab Initio is a Latin term that means ‘from the beginning’. In Insurance it is often used when stating that a policy was void ‘Ab Initio’ meaning that the insurance policy was not valid from the start.

Act of God

In Insurance, an Act of God is an act of nature that couldn’t have been prevented. No blame can be assigned to a policyholder if their home sustained damage because of an Act of God, such as a storm.

Alternative Accommodation

Sometimes you will need alternative accommodation if your home has sustained damage to the extent that makes it unliveable. It is a priority of Insurance Claim managements companies such as Oakleafe Claims, that your family and pets find somewhere temporary which is convenient and comfortable to live in whilst your home is being restored.

Average Clause

This is a clause that you might find in your Insurance policy that states that if your property is underinsured, your insurer is only liable to pay for a percentage of the value of items lost, leaving you- the policyholder to pay for the remaining cost.


Betterment is when someone replaces or repairs a damaged item in their property with something of higher value than the original after an Insurance Claim. Whilst your Insurer is liable to pay for the cost of replacing and repairing parts of your property, any gap the value of original items and the value of replacement items, must be covered by you, the policyholder.

Buildings Insurance

Buildings Insurance covers damage to the structure of a property caused by a flood, fire, storm or impact. This protects structure of the building such as the walls, roof, floors, extensions and its built-in fixtures.

Building Sum Insured

Building sum insured is the cost of rebuilding the property if it was completely destroyed. This includes all additional costs to fully demolish and rebuild the property in full.

Certificate of Insurance

A certificate of insurance (COI) is a document issued by the insurance company or broker that verifies the existence of the insurance policy.

Consequential Loss

A consequential loss is an indirect financial loss that is a result of the original loss (e.g. a property fire or business flood). Consequential loss is usually a separate level of cover in the policy and therefore not included in buildings insurance. It mainly applies to commercial policies and business losses.

Contents Insurance

Contents insurance typically provides replacement cover for all non-built-in contents of a home or business such as your personal possessions.


In your insurance policy, the excess is the amount you have contribute towards the overall cost of a claim. The amount will usually be pre-agreed.

Index Linking

Index linking is where an assets insured value is adjusted in line with changes to inflation and the cost of living.

For example, if your policy is index linked, and the rebuild cost was to increase through inflation, your insured amount would automatically increase. This would help avoid being underinsured.

Loss Adjuster

When you make a claim, your Insurance company will often appoint a Loss Adjuster whose role is to investigate the claim to decide whether it is valid and then decide the settlement offer, in accordance with your policy.

Loss Assessor

Loss Assessors are independent Insurance Claim experts who work for the policyholder to take their stress away by handling all aspects of the claim.

Oakleafe Claims are multi-award-winning insurance claim specialists and retain an enormous amount of experience in all manner of different types of claims.


The peril is the cause of the damage to your home or business. Different perils will be covered or excluded by the policy.


The Insurance premium is the amount you pay for your home or business insurance policy.

Proximate Cause

The proximate cause is the direct cause of a loss. The insurance company will determine the proximate cause and then check whether the policy specifies cover for this peril. Sometimes the proximate cause can be difficult to determine and require thorough analysis.


The term repudiation in Insurance claims management refers to the rejection by Insurers to pay a claim. They will relate this rejection to a specific reason such as non-adherence to a warranty or condition in your contract of insurance.


In the case that damage to your property was caused by a third party, subrogation allows insurers to recoup some of the costs from the third party’s insurance company to contribute towards the claim.

Sum Insured

The sum insured is the maximum amount payable by the insurance company in the event of a loss.

Trace and Access

Trace and access is a clause where your insurer will cover the cost of any damage that occurs whilst trying to find the source of a water leak.


Underinsurance is when your property is insured for less than its true value. It is a common occurrence since most policyholders do not have accurate knowledge about the total value of their property.


Insurance underwriters assess the risks involved in insuring someone’s property. It involves determining the terms and conditions of the policy and ultimately the insurance premium.

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If you have been declined whilst trying to claim on your domestic or commercial insurance, we can help. We can also help with professional services, for example, Brokers, VAR Valuations and Managing Agents.