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Insurance explained - what are definitions and why are they so important?

Insurance companies can sometimes throw words and phrases around assuming everyone knows what they mean. Here we explain what policy definitions are.

Definitions can vary between insurers so be sure to check for differences when comparing policies.

One of the most important things you should familiarise yourself with when choosing a new insurance policy, is the policy definitions. Insurance companies often use definitions to give things or circumstances a different meaning or to allow a lot of detail to be condensed so it doesn't have to keep being repeated.

For example, 'home' may be defined as being something like "The main building which you live in and its garages, sheds or outbuildings, all within the boundaries of the address shown in your policy documents, which is used for private and domestic purposes only." If you’re new to insurance you may not know that sheds, garages and outbuildings are included as part of the definition of 'home'.

It can be the difference between having your claim accepted or rejected. I think everyone can agree that no insurance policy booklet is ever going to win a Booker Prize, we would recommend you read your terms and conditions in full, but we strongly advise you to understand what the special meanings are of the definition words and phrases to help you at claim stage.

These words are often bolded or in capital letters (or sometimes just the first letter being a capital) throughout the wording to draw your attention to what is covered and what is not covered. It also allows for a shorter policy wording as they don’t need to explain what is covered every time the word or phrase is mentioned.

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