Insurance Guide

Understanding Insurance Jargon: A Comprehensive Insurance Glossary

Insurance terminology can be confusing. We’ve put together this helpful insurance glossary to explain some common insurance terms, making it easier for you to understand your insurance cover better.


Accessories are things that have been added to your car that do not enhance the performance or change the structure of the car. For example, bike racks or mag wheels.


An adviser/broker is someone who specialises in insurance. They can have arrangements with multiple insurers to place their customers business where it best suits the customer.

Agreed value

Agreed value is the amount we agree to insure your vehicle for. This is the maximum amount we will pay for loss or damage to your vehicle caused by an insured event (less any excess(es) that apply). 


A claim is when you tell us about accidental loss or damage to your insured property (home, contents, car).

Cooling-off period

A cooling-off period refers to a period of time you get to change your mind after taking out a policy. 


The insurance we provide to take care of your valuable belongings.


Toka Tū Ake EQC covers damage to your home caused by natural disasters like earthquakes, volcanic eruption, tsunamis, landslips and geothermal events, as well as fire resulting from any of these. It also covers damage to your land caused by a natural disaster, storm, or flood. When you purchase your home insurance with us, you automatically acquire EQC cover.


An event is a single incidence, accident or occurrence which you did not intend or expect to happen.


Excess is the amount you pay each time you make a claim. The total excess you are required to pay is determined by the circumstances of your claim. Sometimes you might have to pay more than one type of excess depending on the situation.


A provision in a policy that means certain circumstances are not covered.

Gradual damage

Gradual damage is gradual physical damage to your home and/or contents resulting from water leaking or overflowing from any internal water system causing damage that was not visible, noticeable, or obvious.

Indemnity value

Indemnity value means the depreciated replacement cost or the cost of repairs, less wear and tear and depreciation.


The insured is the person(s) named on the policy and is the one who can make claims and changes to the policy.


When you are legally responsible for damage or loss to someone else’s property or for bodily injury. For example, if you crash into someone’s garage, you are liable for the cost of repairing the garage.

Market value

Market value is the amount the market would pay immediately prior to the loss or damage.


Modifications are alterations made to the manufacturer’s standard body, engine, suspension, wheels or paintwork of your car which may affect its performance, value, safety or appearance.

Natural disaster

Natural disaster includes earthquake, natural landslip, volcanic eruption or activity, hydrothermal activity, tsunami or fire resulting from any of these. It does not include any gradual or slow movement of land.

Period of insurance

Period of insurance means from when your policy starts to when it renews.


A policy means your insurance contract.

Policy document

A policy document sets out what is and isn’t covered under your chosen insurance policy.

Policy holder

The policy holder is the person(s) named as the insured on a policy schedule.

Policy schedule

A policy schedule is an important document that shows the cover you have chosen and other policy details.


The amount paid by you for your insurance cover is called a premium.


Insurance policies generally cover a 12-month period. Usually, 4 weeks prior to your period of insurance ending, we’ll send you a renewal notice that is an offer to insure your belongings with us for another 12 months.

A renewal notice details the terms of your insurance policy for 12 months, such as your premium, amount of cover, and excess. By paying your renewal premium, you accept the new agreement.

Specified item

Specified items are contents with flexible limits that can be increased, for example jewellery. These items are listed on your policy schedule as ‘specified items’.


If we have accepted a claim for loss or damage to your home, SumExtra provides additional cover at claim time if the cost to rebuild your home is more than your sum insured amount noted on your policy schedule. Find out more about SumExtra.

Sum insured

A sum insured is the amount your policy schedule shows for a particular item. 

Third party

A third party is the other person involved in an accident.

Total loss

A total loss is when your property has been damaged to an extent that we don’t think it can be repaired.


An underwriter is someone who assesses the risk of providing insurance to the person applying.

Uneconomic to repair

When an insured item is deemed uneconomic to repair, this can refer to an item that was unsafe to repair or would cost more to repair than replace.

Uninsured driver

An uninsured driver is someone who damages your car and doesn’t have insurance cover of their own.


Need help getting your valuables covered?

If you're unsure about your insurance needs, we're here to help. Give us a call on 0800 267 263 and speak to one of our insurance specialists or book in a call at a time that suits you. Have an existing insurance adviser or broker? Find them here.

The information in this blog is of a general nature and does not constitute financial or other professional advice. Policy limits and exclusions apply - refer to the policy wording for full terms and conditions.