When shopping for insurance, there can be some confusing terms. To help you navigate this, we’ve put together a glossary of common words and phrases. For a more comprehensive collection, see BIBA’s website.
Policy: Your insurance policy is the document that records the agreement to issue money in the event of a claim, plus terms and conditions for doing so. You are known as the policy holder.
Premium: This is the amount you pay for your policy. This is often charged on a monthly or annual basis.
Claim: When you make a formal request for the insurance provider to pay out on your policy, i.e. when something happens that justifies them paying for it.
Excess: You will usually need to pay an excess when you make a claim. This is a pre-agreed amount. This is sometimes known as a deductible.
Quote: The insurer will give you an estimate of what your policy will cost (premium and excess). This isn’t an agreement but will help you decide if this is the best deal for you.
Exclusion: Your policy will probably come with some terms and conditions. Certain factors or events may be excluded from the cover. For example, you may be able to claim if your phone is stolen, but not if your internal data is corrupted.