Crack the code, insurance jargon made easy
Understand insurance like a pro, this is your go-to guide for decoding insurance terms in simple language.
For detailed definitions of any initio-specific terms, please refer to the specific wording in our policies. This will provide you with a more comprehensive understanding of the meaning and implications of these terms.
An event or incident which you didn’t intend or expect.
Physical damage or loss caused by an accident.
A statement made that influences or is intended to influence a person to purchase a particular financial product or service. Advice can be personal or general.
Financial advice is the giving of opinions or the making of recommendations about buying or cancelling insurance.
Temporary alternative accommodation (of a similar standard to the home) when the home is your principal residence and cannot be lived in due to a loss or contamination damage. This is an automatic additional benefit as part of the initio home policy.
For your home: rebuild or repair it using the same materials if they are readily available in New Zealand or equivalent materials in terms of quality, purpose and specifications.
For your contents: replace with new items that are readily available in New Zealand and are the current equivalent in terms of quality and price, regardless of brand or supplier.
An item that you own, that has a value.
Where you are a unit title owner, ie an apartment or townhouse, you automatically become a member of the body corporate. A body corporate is a group made up of all the unit owners and is governed by the Unit Titles Act 2010. The Unit Titles Act requires the body corporate (not the individual unit owners) to insure all the buildings.
Any business, trade, profession or other activity you earn income from. This does not include:
It includes any other business operated from the risk address.
Much like a birth certificate, that shows who you are, the Certificate of Insurance outlines your personal policy info and cover levels. We send this out when you buy, renew or make a change to your policy. It is usually required by an Interested Party to confirm that you have insurance. This can also be referred to as a ‘Certificate of Currency (COC).
In insurance terms, a collection refers to a set of valuable items that are insured together as a single item. Our policy wording defines a collection as stamps, medals or coins.
A property that is used solely for business purposes. Examples of commercial rentals include malls, office parks, restaurants, gas stations, convenience stores and office towers. This is not a product that initio currently provides cover for.
Any area of a unit title, strata title or flats that is not part of your lot or tenancy unless it is secure and you have exclusive access to it under the by-laws of your body corporate or tenancy agreement. It includes garages, storage areas, parking areas, walkways and stairwells.
Costs of additional materials, work and expenses required solely to comply with government or local authority bylaws and regulations. More information about rebuild costs.
Financial loss or additional expenses resulting indirectly from an event we cover under your policy. For example:
Your household contents are the household goods and personal items located at the insured address including, but not limited to, CDs and DVDs, clothing and bags, electrical appliances and electronic equipment, furniture and furnishings, jewellery and watches, sporting and recreational items, tools and garden equipment, other items such as unregistered motorised wheelchairs and non-structural fixtures and fittings that are not insured under any other insurance policy. Our contents policy has more information on this topic.
What it would cost us, including any discounts that are available to us, to repair, rebuild or replace your home or contents when the loss or damage took place.
(also refer to multi unit)
A building divided into two individual units or townhouses that share a common wall and can be sold under separate titles and individually owned.
Honesty is the best policy in any relationship. It’s important to answer all questions truthfully when buying insurance as well as letting your insurer know if something changes.Your duty of disclosure applies at all times. Our Non-Disclosure article has more information.
Individuals or entities in New Zealand who meet the specific criteria outlined by initio for their insurance policies. Being an eligible policyholder means you qualify for the various insurance options offered. Understanding the requirements and determining if you fit within them is an essential step in selecting the right cover for your needs. More on initio policy wording.
The amount you pay towards the cost of your claim. Your Certificate of Insurance shows the type and amount of excess that applies to your policy. More than one excess may apply.
For example: If you have an excess of $500 on your house insurance and there’s unexpected damage, you pay the first $500 towards the claim. Our ‘Top Mistakes when insuring a house’ article covers some of the fundamentals regarding insurance excess.
(see also ‘Immediate Family’)
Your family who permanently live with you at your home, which includes your legal or de facto spouse and any member of your family or your spouse’s family.
Includes an in-ground or an above-ground pool which involves completing excavations or installing permanent structures like decks, and fences. A fixed swimming pool also includes the fixed accessories like a pump, motor and filters. Fixed swimming pools will need council consent to build.
A residential building owned by a single person or entity that is divided into a number of self-contained areas that can be rented, shared or leased to individuals. The building cannot be subdivided and the flats cannot be individually sold.
Illegal entry into your home, or where you are staying, which includes illegally using keys, picking locks, or breaking a window. It can also be entry gained by violence (someone threatened you with a weapon to gain entry). It does not include entering your home through an unlocked door, window or skylight.
Your insured building and contents are well maintained, free from damage, decay, and defects that could reasonably be expected to increase the risk of loss or damage.
Good condition includes but is not limited to your building having:
A deterioration (wear & tear) that occurs over time. Because the damage isn’t sudden, even if the discovery is, it is generally not covered by insurance. See also ‘Hidden gradual damage’. Our article on ‘Is the cause of damage covered’ has more information.
Examples of what’s not covered (please note, this is not an exhaustive list)
Property is fit for a person to live in with all services operational (e.g. electricity, gas, sewage, water) and free of defects that may endanger the health and safety of occupants/visitors. This also includes if the bathroom doesn’t work, but there is a working ensuite, then the home is considered habitable. Uninhabitable property is NOT fit for a person to live in or have the above facilities.
Hidden rot, hidden mildew or hidden gradual deterioration, caused by water leaking from any internal water pipe, waste disposal pipe or a tank that is plumbed into the water reticulation system of the home and is permanently used to store water, installed at the home. Our article ‘Is my water damage sudden or hidden gradual damage’ has more information.
A house that is owned by you but is not your permanent place of residence. It is used for holidays by you and your family. It may or may not also be rented to guests. More information on our Holiday Home cover.
Month-to-month insurance for residential dwellings undergoing cosmetic renovations. It may be your intention to sell the property, but as long as it’s capable and intended to be a domestic residence then this cover will work for you. More information on our House Flip cover.
(See also ‘Family’)
Your:
Something that occurs at a particular point in time, at a particular place and in a particular way.
The address or addresses shown on your Certificate of Insurance.
An activity that purposefully causes harm/damage or destruction.
An interested party is someone who has a financial interest in something you own. On a home insurance policy, it’s usually the Bank or Finance company that holds the mortgage over your home. Read more here.
A benefit (automatically included with initio) for Landlords which must be purchased additionally to standard insurance. This can include sudden and accidental loss of the property or contents as well as loss of rent. Learn more about our Landlord insurance here.
Liquids that are leaking, bursting, discharging or overflowing from household domestic appliances and furniture, pipes, gutters, tanks, drains, bathroom and toilet fixtures.
Fees collected in your annual premium on behalf of the government.
E.g. EQC levy, Fire and Emergency levy. For more details see ‘How are house insurance premiums calculated’.
The legal responsibility for one’s actions or omissions that result in harm, loss or damage to another person or entity. In other words, being held accountable for the consequence of ones actions. We have a couple of articles on this subject, including ‘Can I hold my tenant responsible for damage?’ as well as one about ‘Claims Grading’ specifically regarding vehicle insurance.
When loosely packed, water-logged sediments at or near the ground surface lose their strength in response to strong ground shaking. Liquefaction occurring beneath buildings and other structures can cause major damage during earthquakes.
Property is at lock up stage when the exterior of the property is complete and the property can be securely locked e.g. meet minimum security standards.
Insurance loss adjusters may do some or all of the following: inspect damage to property, vehicles or equipment, determine the cause of damage, assess what the insurance policy covers and estimate the cost of repair or replacement.
The amount of any rent you have lost, if the home cannot be lived in due to a loss or contamination damage that occurs during the period of cover. Our ‘Loss of Rent’ article has more information.
An important fact about you or your circumstances that would influence an insurer’s decision on whether to issue a policy and on what terms. Non-disclosure or misrepresentation of such facts can result in your policy being cancelled or your claim being declined.
A mortgage is a loan taken out to buy property or land. The loan is ‘secured’ against the value of your home until it’s paid off.
Multi-unit or block of flats. A building that has more than one self-contained dwelling. Our ‘Multi-Unit insurance’ page has more information.
Natural disaster in terms of the policy wording a natural disaster is defined as an earthquake, natural landslip, volcanic eruption, hydrothermal activity, tsunami or natural disaster fire, as defined in the EQC Act.
If something happens and you need to claim on multiple car, house or contents policies, you’ll potentially only pay one excess.
E.g. A car drives through your garage and runs over your bike, you pay one excess for both your bike and your home even though you are claiming on two policies.
This is the date that the policy will start and when insurance coverage is considered to be active and in place.
All the details on what is and isn’t included in your policy. It’s the wording for the contract of insurance we have together. Read full policy wordings here.
A power of attorney is someone you appoint to make financial and personal decisions on your behalf. There are 2 types of power of attorney:
Once a person is deceased, any power of attorney becomes null and void; this is superseded by the Executor of the will.
The amount you pay for the cover we give you under your policy. It includes any compulsory government statutory charges, levies, duties, GST or other taxes that may apply.
Also known as the policyholder.
Reinsurance is insurance for insurance companies. If there’s a large event that affects a whole community, reinsurance is there to help insurers cover the costs of claims. It acts as a guarantee that if something major happens, we can still pay out your claim and get you back on your feet as quickly as possible. The cost of reinsurance can sometimes increase, this is reflected in your insurance premium.
When any part of the roof, floor or external walls of your home are removed to allow additions, alterations, repairs or decoration to be completed to your home. Learn more about when you need contract works cover.
Reparation refers to the act of making amends or providing compensation for harm or damage caused to someone or something. Reparation is often used in the context of legal liability, where a person or organisation may be required to pay reparations to a victim for harm caused by their actions.
For certain policies, you might not be covered for loss that occurs during the first 48 hours of any policy creation. This includes damage caused by storms, floods or landslips, This will only apply to the first policy taken out with us. However, this exclusion does not apply where this policy started immediately following another policy that also insured the same property against the risks of a storm, flood and landslip.
A wall that is not part of the building you live in and is designed to hold back and retain earth or water.
Flats that do not share amenities such as bathrooms, kitchens, lounges etc. an exception is shared laundry facilities, flats can share laundry facilities and still be self-contained.
The funds that an insurance company pays out to the policyholder in the event of an insurance claim.
This is the day you take legal possession of your new home. The exact date is agreed between the buyer and seller and is then specified in the contract of sale.
A form of compensation that is provided when, in our opinion, it is uneconomic to repair the loss to the home or where we settle a claim for contents as a total loss. This benefit can only be claimed on one policy. This payment is intended to provide relief for the stress and inconvenience caused by the loss. More information can be found in our policy wording documents.
Storage units that are provided through Storage Service Providers such as (but not limited to) Kennards or National Storage. Storage units can be self-storage, managed storage or serviced storage and are acceptable when:
When you take out cover for your home, you’ll need to specify a Sum Insured that represents the maximum total amount we’ll pay to repair or rebuild your home. It’s an important part of your insurance policy, so you take your time to get a good estimate. Our ‘Calculate your sum insured’ article has more information
Home Cover:
If we determine that repairing your home is not cost-effective, we’ll offer an additional $15,000 to rebuild your home using sustainable products. This offer applies if:
This amount is in addition to your total sum insured.
Contents Cover:
For your whiteware appliances, we will either:
If there’s a comparable, more energy-efficient model available, we’ll cover the cost of that model. More information can be found in our policy wording documents.
A structure you live in that is not fixed to foundations set into the ground and is not connected to services on the site.
A swimming pool that is not a fixed swimming pool which includes an inflatable or above-ground swimming pool or spa that is mounted on its own accessories or on a temporary site. These pools do NOT require council consent to build.
An act by any person or group, including the use of or threat to use force or violence for political, religious, ideological, ethnic or similar purposes (including the purpose of influencing the government) and/or that is intended to put the public, or any section of the public, in fear.
Tools that are usually used for a business.
A residential building divided into a number of self-contained areas that can be owned by individuals or entities, have separate titles and can be sold individually. Units may be registered under a Body Corporate scheme.
No one has been living in your home for more than 60 days and you did not tell us beforehand that it would be unoccupied for 60 days or longer.
Water that enters your home as a result of it running off or overflowing from any origin or cause.
Initio Insurance Limited, 6 Garden Place, Hamilton, New Zealand. Initio is underwritten by IAG, New Zealand’s largest general insurer.
Any:
In our policy, “you” or “your” refers to the person or entity named as the Insured in the schedule.