Common home and car insurance terms explained

This guide helps explain some common Home and Car Insurance terms you may come across.

For a full list of terms and definitions used in your policy, read your Home or Car Insurance Product Disclosure Statement (PDS).

The document issued to you after you purchase a policy, before you renew your insurance and whenever you amend your policy.

For Home Insurance, it details your Cover Type, including any Optional Covers you have selected, the Period of Insurance and any special conditions that apply to your policy.

For Car Insurance, it typically includes your Cover Type, the details of any Declared driver/s, any Cover Options available and those you have selected, the Period of Insurance and any special conditions that apply to your policy.

Claim

A request made by you to your insurance provider for financial compensation. This can occur when you have suffered damage or loss that you believe is covered by your insurance policy. It would be to repair the damage or replace the item/s.

Claims acceptance

The formal agreement with your insurance provider for settlement of your claim.

Claims lodgement

The process of notifying your insurance provider about an Insured Event that has resulted in damage or loss.

Excess/s

An amount you must contribute when your insurance provider pays a claim. The excess amount/s are stated on your Certificate of Insurance.

There are various types of excess that may apply. Please refer to your Home/Car Insurance Product Disclosure Statement (PDS) for more detailed information about the types of excesses related to your Cover Type.

Insured Event

An accidental, unexpected, or unforeseen event resulting in damage or loss that your Home/Car Insurance provides cover for.

Premium

The amount your insurance provider charges you for your insurance policy. It is made up of your basic premium plus any Government and other charges.

Product Disclosure Statement (PDS)

A document (or group of documents) which describe a financial product or service. It includes the features, benefits, costs, and risks associated with that product. It can also be known as a terms and conditions brochure.

Underwriter

Commonly refers to the insurer itself. It's the individual or organisation responsible for deciding whether to issue an insurance policy.

The address your policy is based on. This is written in your Certificate of Insurance. This address includes any adjoining land that a statutory authority has made you responsible for as the owner or occupier.

Sum insured

Your building sum insured should equal the current total cost of rebuilding your home, including GST.

Your contents sum insured should equal the current total cost of replacing all your contents, including GST. 

The amount your insurance provider agreed to insure your car for. If you’ve selected the agreed value option (where available), the agreed amount will be stated on your Certificate of Insurance and will remain the same for the Period of Insurance.

Compulsory Third Party Insurance (CTP)

Compulsory Third Party (CTP) insurance is a type of car insurance that covers injury or death as a result of an accident for which a driver is responsible. CTP is also known as ‘greenslip’ in some states. It’s mandatory in all states and territories of Australia and is legally required to register a car in Australia. CTP doesn’t provide any cover for the physical damage to the car or the damage to other people’s property. 

Third Party Property Damage Cover

This covers damage caused by your car to other people’s property for example, their car or fence.

Comprehensive Cover

This covers damages to your car as a result of events like collision, flood, fire, storm and theft. It also covers you for any damage caused by your car to other people’s property.

Market value

The amount it will cost to replace your car considering the age, make, model, and condition of your car immediately prior to the loss or damage.

Market value includes:

• Goods and Services Tax (GST)
• The cost of registration and Compulsory Third Party (CTP) Insurance  

Market value doesn’t include:

• Warranty costs
• The amount of stamp duty that would be levied on the purchase of replacement vehicle
• Transfer fees 

Overnight address

Where your car is normally kept overnight.

Sum insured

Depending on the type of insurance you've chosen, your insurance provider may insure your car for an agreed value or a market value. This value is known as the Sum Insured. The Sum Insured that applies to your car is shown on your current Certificate of Insurance.