New research from Go Compare Home Insurance has revealed that a surprising number of homeowners don’t understand important home insurance terms – with only half of Britons 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, Go Compare claims it could mean millions haven’t checked that they are insured for the right amount.
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.
| 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% |
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