Hints and Tips

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All our policies

This is an event which is unpreventable and unpredictable which could cause loss or damage to buildings, land, vehicles, etc. Insurance policies don’t often include acts of God, although they will usually cover natural disasters such as floods.

A change to your current policy such as your personal details, your annual mileage or add additional cover to your contents insurance.

The price you are quoted by an insurance company for your insurance.

A clause in your insurance policy which states that if neither you or your insurer can agree on an ‘appropriate claim settlement’ you both hire a mutually agreed appraiser to settle the dispute. The appraiser then appoints an independent mediator and is neutral to both parties. A majority decision will decide the amount of the claim.

The ABI is the industry association for British insurance companies. Many insurance companies are members although this is not compulsory. The ABI is not a regulatory body.

A broker is an independent intermediary who sells a range of policies from different insurance companies.

Your insurer and/or your insurance intermediary may charge you if you want to cancel your policy before it is due to end. There may be a cancellation fee to pay as well as a percentage of your premium for the time you have already been insured. Cancellation charges can be found in your policy documents and contract with your intermediary.  You will need to phone your insurance intermediary to cancel your policy. 

A claim is a request or demand for payment under the terms of your policy. For example, if you make a claim against your insurance policy. 

There are two types of claim you need to be aware of:

Fault claim 

You are believed to have caused an accident or incident, or your insurance company cannot recover all their costs from the other party. 
Some claims will always be classed as fault claims and although you haven’t done anything wrong, there is no-one to recover the cost of the stolen items from and the claim becomes a fault claim.

Non-fault claim 

You have been involved in an accident or incident and your insurance company can recover all their costs from the third party.

A loss for insurance purposes is an event that has happened that has resulted in damage to, or loss of use of, something. A claim is an application to your insurance company to compensate you for that loss.

Insurance companies will look at your claims history (how many claims you have made and what you have claimed for) when deciding on what to charge for your insurance premium or renewal premium. Your claims history will help paint a picture of the potential risk you pose as a customer.

An excess is the sum you are responsible for towards any claim. For motor claims it typically has to be paid to the garage fixing your vehicle once it is repaired before you can drive it away. 

The main excess types are:

Compulsory excess 

This is set by your insurance company and is the amount you have to pay to your insurer if you make a claim.

Voluntary excess 

When you take out a policy, you can choose to pay more towards the cost of a claim. This generally reduces the price of what you pay for your insurance when you buy it and is paid as well as the compulsory excess.

Certain events or circumstances where the insurance company won’t pay out.

The FCA regulates the financial service industry which includes insurance companies.

See claim

Being put back to the same state or financial position you were in before a claim.

The amount paid to an insurance company for an insurance policy.

A tax on insurance premiums. This is included in the cost of the policy.

Information that would influence an insurance company’s decision to accept a policy, or the premium it would charge. If there is information which you don’t disclose your policy may not be valid and any claim may not be paid.

See claim.

Insurance companies will often offer extra levels of cover for an additional premium. For home insurance these could be, for example, home emergency cover or legal cover. For motor insurance, legal cover or breakdown cover.

The length of time the insurance is valid for.

The contract between the policy holder and the insurance company.

Your policy documents can be made up of a number of elements. These normally include the insurance policy between the policy holder and the insurance company, any contracts between the policy holder and service providers for additional products and a separate contract between the policy holder and the intermediary for arranging and administering their insurance. 

Policy documents may also include pre-contract credit information and a fixed sum loan agreement if the policy is paid by monthly instalments. 

This gives details of how much cover you have (the sum insured),the period of insurance, the premium you have to pay and the sections that apply. With some policies you may get a new schedule when you renew the policy or whenever you change any policy details.

A policyholder is the person to which the insurer issues the policy. This is the person who the insurance company will pay the benefits of the insurance policy cover to, should a claim be made.

The price an insurer offers for insurance based on the information provided by the person asking for the quote.

Insurance companies base the price of their policies on a number of factors such as the driver’s age, postcode and driving history. This is commonly known as ‘rating’ in the insurance industry.

Continuing an insurance policy once its 12 month term ends. For example, if you take out a policy and then stay with the same insurer after 12 months, your policy is renewed.

In order for any insurance company to provide a quote they must first look at the risk they are quoting for. This generally means looking at the customer’s quote details and assessing them by their claims history, the cost or type of the vehicle they drive, and perhaps the area they live in.

The amount your insurer pays out for a claim.

This shows the details you gave us about you and your vehicle or property when you bought your policy.

The amount paid out by the insurer when a claim is made on a policy.

When the sum insured on your policy is not enough to cover the loss or damage.

An underwriter is employed by an insurance company to decide whether to accept a risk and calculate the premium to be charged.

Any losses following an accident or incident which are not covered by your insurance policy. Some examples of these are; your excess, loss of earnings, out-of-pocket expenses or compensation for an injury suffered as a result of the accident.

See excess

Motor Insurance

Annual mileage is the total mileage you do in a year. Annual business mileage is the mileage you do in connection with your employment or business.

A garage recommended by your insurance company for repairs covered by your motor insurance policy.

A document or certificate issued by insurance companies as proof that insurance is in force, to meet legal requirements.

See cover type

When someone commits a motoring offence and receives a motoring conviction, a four-digit code is put on their licence by the Driving and Vehicle Licensing Agency (DVLA). For example, SP30 is the conviction code for exceeding the legal speed limit on a public road.

A document showing temporary proof of cover for a motor vehicle while the policy and certificate are being prepared by the insurer.

There are three types of motor insurance cover:

Third party only (TPO) 

The legal minimum level of insurance. This offers cover if you have an accident causing damage or injury to another person, animal, vehicle or property but this does not cover damage to the driver’s own vehicle.

Third party fire and theft (TPFT) 

Covers fire and theft of the driver’s vehicle in addition to third party only cover. 

Comprehensive (Comp)

Cover if your car is stolen, damaged by fire or accidentally damaged. You’re also covered for claims made against you by other people for bodily injury or damage to their property.
In addition to all of the above we also cover you and your partner if a permanent injury is sustained in an accident involving a car.

Not all insurers provide cover for driving other cars as standard. If your policy includes this cover then it will be stated on your certificate of insurance. If you do have this cover, the following usually applies:

  • It is third party only cover on another vehicle, you won’t be covered for any damage to the car you are driving
  • The car must be currently insured by another party
  • You must have the owner’s permission to drive
  • You can only use it for cars that do not belong to you; or
  • Vehicles not hired to you under a hire purchase agreement
  • It is for emergency cover use only, not for day-to-day use

This is a change made to an insurance policy which becomes part of the policy. For example, if you change your car the vehicle details will be changed and your new car is insured instead of your old car.

These are the countries where your insurance policy provides you with cover.

This is needed if you want to drive abroad, outside of EU countries. You must confirm with your insurer that you have this cover before you drive abroad as some countries impose severe penalties if you don’t.

  • A green card provides basic Road Traffic Act cover for driving while on holiday abroad
  • Recognised in over 40 countries (check with your insurer to see what countries they cover)
  • For an extra charge, most insurers will extend your cover so you have the same level abroad as you have at home
  • Some countries will seize your vehicle if you cannot provide the correct documentation.

This is an additional security device for your vehicle. An electronic immobiliser disables the engine of your vehicle. Newer ones usually have these fitted by the manufacturer as standard and details can be found in your vehicle instruction booklet. If you have an immobiliser fitted by a garage, they will give you a certificate of installation showing the make and model. Some insurers offer a discount if a vehicle has an immobiliser.

Vehicles brought into the UK from abroad.

The amount the insurance company will pay out for your claim. This will either be the amount you stated the vehicle was worth when you took out the policy or the market value at the time the claim is made – whichever is lower.

A car that you assemble yourself from a kit. Usually the mechanical parts such as the engine and transmission are taken from one or more other vehicles. Kits can vary from as little as a book of plans to a complete set of all the components needed to build the car.

An agreement where each motor insurer pays for damage to its policyholder’s car regardless of which driver is to blame, providing the policy covers damage to the policyholder’s own car.

The person who drives your vehicle the most. You must tell your insurer who this is as they will take it into account when working out how much to charge you for your policy. If you make a claim and your insurer finds out the main driver is not who you told them it was when you took out your insurance, they can refuse to pay out if you make a claim or cancel your insurance.

The cost of replacing your vehicle with one which is similar to yours before the damage happened.

Any changes made to your vehicle that are not classed as factory standard. This could include engine modifications, alloys, spoiler or sunroof, etc. If you don’t tell your insurance company about any modification when you buy your policy, they can refuse to pay out if you make a claim or cancel your insurance.

The number of years you have been insured and not made a claim. The more years you remain claim free, the more No Claims Discount you earn. You will need proof of your No Claims Discount when you buy a policy. Once you have driven for a certain number of years claim free, you can protect your No Claims Discount. It can be shown in years or as a percentage.

See No Claims Discount (NCD)

A vehicle which wasn’t originally registered in the UK and the age couldn’t be proved when it was registered, or a vehicle built using a large amount of used parts. Examples are:

  • Insurance write-offs
  • Stolen/recovered vehicles
  • Ex-military vehicles (including ex-army, ex-navy and ex-RAF Land Rovers)
  • Imported vehicles

Someone involved in a claim who is neither the policyholder nor the insurer. For example, if you are in a car accident, the driver of the other car is a third party.

Vehicle tracking systems (trackers) are electronic devices fitted in vehicles to enable vehicle owners or third parties to track the location of it. Most modern trackers now use GPS to allow for easy and accurate locating of the vehicle. Some insurers offer a discount if a vehicle has a tracker.

What you use your vehicle for will have an effect on your insurance premium. If you only use it for driving to visit family and friends or to go shopping, this would be the minimum risk rated by an insurer. However, if you use your vehicle for both social and business use you will face a higher rate from your insurer as you are considered at greater risk of making a claim because of the extra mileage you drive or the goods you may carry. The different categories of vehicle use are:

  • Social, domestic and pleasure – you are covered for day-to-day driving – such as visiting family, friends or going shopping – but not driving to work.
  • Social, domestic, pleasure and commuting – You are covered for everything in the social domestic and pleasure category, plus driving  to and from one fixed place of work. It also includes travelling and parking at a railway station.
  • Business use – You can use your vehicle in connection with your job, such as driving to more than one place of work.
  • Commercial travelling – You can use your vehicle for things like door-to-door sales.

Your policy documents will state what you can use your vehicle for.

This is a vehicle which can’t be repaired or will cost more to repair than the value of the vehicle before the damage happened.

Home Insurance

Insurance cover for damage to items. For example, if you accidentally put a foot through the ceiling whilst in the loft, this would be covered under the accidental damage section of your buildings insurance policy. Alternatively, if you accidentally dropped paint on your carpet, this would be covered under the accidental damage section of your contents insurance policy. This is not always included as standard and you should check your policy documents to see if you are covered.

Some insurance policies include cover if you take certain items outside your home, for example your laptop or jewellery and will let you buy additional cover which is known as personal possessions or all risks cover. You’ll need to check your policy to see if it includes personal possessions cover.

Buildings insurance covers the building itself, together with permanent fixtures and fittings which you own or which you are legally responsible for within the premises, such as fitted kitchens, baths and toilets.

Cover for household possessions. Generally contents cover should include just about everything you would take with you if you moved house such as furniture, household goods, kitchen equipment, frozen food and drink, computer and audio equipment, personal items and valuables. Contents cover doesn’t always include these items or jewellery and cash as standard, so it’s important to check your cover and the limits of these items in the policy wording.

Depreciation is a deduction for wear and tear of your possessions. Even with new for old cover you should deduct an amount for wear, tear and depreciation from clothing and household linen claims.

A property in a good state of repair is one without structural problems.

High risk items are those items that are most frequently stolen from our homes when they are burgled.
Examples are:

  • Cameras and photographic equipment
  • Computer or laptops and equipment
  • Jewellery
  • TV’s and audio or DVD equipment

The private property in which you live which is used solely for domestic purposes.

New-for-old policies meet the full cost of replacing items if they are stolen or destroyed, as long as the claim is valid. Alternatively, the cost of repair will be met if the items are damaged. Some exclusions may apply with each insurer.

Belongings that you wear or take away from the home in everyday life. This includes cover for jewellery, spectacles, mobile telephones, keys, sports equipment for social use and cameras.

For home insurance purposes, this will be the household (risk address) which requires the cover and is stated as the premises when you get your quote. The premises or risk address will be shown in the policy schedule once cover has been issued.

This the the total cost of rebuilding your home if it was completely destroyed. It includes the cost of all professional fees, materials and labour, including the cost of demolishing and clearing the old building.

As house prices fluctuate, you cannot guarantee that the rebuilding costs will be automatically lower than the purchase price/value of the house to be insured. Remember that although the cost of the land was included in the cost of the house purchase, this would not be included in the rebuilding costs.

This is the maximum amount that one item can be covered for on your home insurance policy. The single article limit value is set by the insurance company.

Life Insurance

Critical Illness is an additional product that you can add to your Life Insurance policy during the application. It covers you for specific illnesses and you’re able to claim for a pay-out that doesn’t impact your life insurance policy.

If your child or children are diagnosed with an eligible Critical Illness and you have opted to include Child Critical Illness in your life insurance policy, we will pay the lower of 25% of the adult Critical Illness sum assured or £25,000. 

The life assured is the person or people that are covered by the Life Insurance policy and if applicable, Critical Illness Cover.

These are specific critical illnesses, activities or occupations that are not covered by your Budget Life Insurance policy. Budget Insurance will not pay a claim if the life assured commits suicide within 12 months of the policy start date. This is outlined in your Policy Summary and the Terms and Conditions. 

This is the amount you have set to cover yourself over the policy term. The sum assured may remain level or decrease over the period of cover depending on the cover type you have chosen. You can choose the cover amount and type within the application process.

Terminal illness provides an early pay-out of your life insurance policy when an attending Consultant diagnoses you with less than 12 months to live. The policy will stop once the terminal illness pay-out has been completed. This cover is included with all Budget Life Insurance policies. Terminal Illness cover ceases 12 months prior to the end of the policy term.

We’re currently experiencing a high volume of calls into our contact centre and whilst we are doing our very best to maintain service levels, we ask that you only call our contact centre if absolutely necessary so we can keep our phone lines available  for vulnerable customers and those who don’t have access to online services.

If you need to check any details or make a change to your policy, please  log in to your Self-Service Centre. It will be much quicker for you to make changes to your policy online at the moment. Once logged in, you can also use our Webchat service which is available Monday- Saturday 8am-6pm and Sunday 10am-4pm to make changes, accept or decline your renewal or if you need to let us know about a claim. To log in, please click here.

We also have some other information that may be useful. Click here to read our FAQ’s, and information on what we are doing to support key workers can be found here.