New research reveals millions of Brits don’t understand key home insurance terms
With winter drawing to a close and spring cleaning soon underway, the insurance experts at Go.Compare Home insurance are encouraging people to ‘spring clean’ their home insurance - and brush up on some key phrases.
New research from the comparison site has revealed that a surprising number of homeowners don’t understand important home insurance terms - with only half of Brits fully knowing the meaning of Accidental Damage (52%) and only a third fully knowing what sum-insured means (33%).*
The sum-insured figure in your home insurance policy refers to the maximum amount that your insurer will pay out in the event of a claim.
This means that if you lost all of your possessions in a fire and have a home contents insurance policy (building and contents insurance), your sum-insured figure should be enough to cover the cost of replacing all the items you’ve lost. A buildings-only home insurance policy won’t cover any damage or theft of your possessions, so it’s worth taking a look to see exactly what level of cover you have in place.
With just over two-thirds (67%) of those surveyed saying they don’t fully understand the term, it could mean millions haven’t checked that they are insured for the right amount.**
| Home insurance terms | % of people who fully understand the term* |
| Accidental Damage | 52% |
| Buildings insurance | 52% |
| Contents insurance | 52% |
| No claims bonus | 48% |
| Legal expenses cover | 40% |
| Compulsory excess | 40% |
| Voluntary excess | 40% |
| Additional excess | 34% |
| Sum insured | 33% |
| Under insured | 26% |
| Unsure | 11% |
| None of the above | 9% |
The top three most misunderstood home insurance terms include the policy types Building Insurance, which covers the structure of your home, and Contents Insurance, which covers your possessions. With these policies offering very different protections, it is worrying that only half of people (52%) know what they mean. And the knowledge gap extends further, with Go.Compare’s other recent research finding only four in ten fully understand the meaning of compulsory (39%) and voluntary excess (39%) for car insurance.
Nathan Blackler, spokesperson for Go.Compare Home insurance said: “Spring is a great time to declutter your home, making sure you are ready for the warmer months. It’s also a great time to dust off your home insurance policy and make sure you both understand the terms and know what exactly you are covered for.
“It’s quite concerning to see that so many Brits don’t understand the meaning of sum-insured, so while you’re cleaning your home, it’s worth thinking about the value of your contents and making sure that you are covered for the right amount. Whether you get out a pen and paper or use a handy calculator like this one, it’s a key step in making sure all your possessions are fully protected. We’ve also put together a few top tips to help you work out the value of your contents:
- Walk around your home and make a list of your possessions - including carpets, curtains, and garden furniture. Don’t forget any items in the loft, shed or garage.
- Estimate how much each item would cost to replace as new - if you aren’t sure, do some research online.
- If you have any expensive items like gadgets or jewellery which haven’t been valued recently, then find out how much they are worth.
- Finally, add everything up to work out how much your sum-insured figure should be.”