What the F***nce! Part 9

According to the Co-operative 66% of consumers find insurance too confusing, 36% don’t understand how their insurance is priced and 27% don’t understand why the price of insurance varies annually. That’s why this week we are covering insurance terms. Hopefully by the end of this article you’ll understand more about the insurance industry and the terms that matter.


The premium is the amount you pay annually (or monthly) for your insurance protection. Insurers use a range of factors to determine your risk, and therefore your overall cover price. These factors can include your location, history of insurance claims, age and employment. Depending on the type of insurance you are looking for you may also be asked to provide details about your home, your health and your driving history.


Also known as the ‘excess’. This is a cost that you, the policyholder, agree to pay before your insurer will cover the remaining costs of a claim. The amount you agree as your ‘excess’ is variable, however you usually find that the higher your excess, the lower your overall premium. But remember, only agree to an excess that you can afford to pay in the result of you needing to make a claim, otherwise you may find yourself with a large, unexpected bill that you cannot cover.

Actual Cash Value

This is the cost of replacing your property, but this value can change. It factors in depreciation and obsolescence. So you might not always get back the same amount you originally paid for the item. If an item is of particular significance to you such as antiques or jewellery, you may be able to specifically list it in your policy. Some items like artwork may also go up in value over time, so it’s a good idea to also list these on your policy.



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