Most Used Car Insurance Terms in the UK
22/05/2024
Understanding car insurance terminology is essential for selecting the right policy and ensuring you have adequate coverage. Here’s a list of the most commonly used car insurance terms in the UK:
1. Premium
- The amount you pay for your car insurance policy, usually annually or monthly.
2. Excess
- The amount you must pay out of pocket for each claim before the insurer covers the remaining costs.
3. Third-Party Only (TPO)
- The minimum legal requirement, covering damage to third-party vehicles and property only.
4. Third-Party, Fire, and Theft (TPFT)
- Covers damage to third-party vehicles and property, as well as theft and fire damage to your own vehicle.
5. Comprehensive Cover
- Insurance that covers damage to your own vehicle, third-party vehicles, and property, as well as theft and fire.
6. No Claims Bonus (NCB)
- A discount on your premium for each year you do not make a claim.
7. Named Driver
- A driver specifically named on the policy who is covered to drive the insured vehicle.
8. Any Driver Policy
- A policy that allows any driver to operate the insured vehicle, usually with certain conditions like age and experience.
9. Policyholder
- The individual or entity that owns the insurance policy.
10. Certificate of Insurance
- A document that proves you have the necessary insurance coverage for your vehicle.
11. Policy Schedule
- A document detailing the specifics of your insurance coverage, including the insured vehicle, drivers, and coverage limits.
12. Endorsement
- A modification or addition to your insurance policy that changes the terms or coverage.
13. Cover Note
- A temporary certificate of insurance issued until a permanent policy is provided.
14. Policy Term
- The duration of the insurance policy, typically one year.
15. Claim
- A request made to your insurance company for payment or reimbursement for a covered loss.
16. Exclusions
- Specific conditions or circumstances that are not covered by the policy.
17. Underwriting
- The process by which insurers assess the risk of insuring you and set your premium accordingly.
18. Indemnity
- Compensation for loss or damage, intended to restore you to your financial position prior to the loss.
19. Legal Expenses Cover
- Covers legal costs incurred in defending or pursuing claims related to your vehicle.
20. Breakdown Cover
- Assistance and recovery services if your vehicle breaks down.
21. Personal Accident Cover
- Provides compensation for accidental death or permanent disability resulting from a car accident.
22. Courtesy Car
- A temporary replacement vehicle provided while your car is being repaired after an accident.
23. Telematics
- Technology used to monitor and record driving behavior, often used to help reduce premiums and improve safety.
24. Black Box Insurance
- A type of telematics insurance where a black box device is installed in the car to monitor driving behavior.
25. Fronting
- A form of insurance fraud where a more experienced driver is named as the main driver to reduce premiums for a younger or less experienced driver who is the actual main driver.
26. Breakdown Cover
- Insurance that provides roadside assistance and recovery services if your vehicle breaks down.
27. Agreed Value
- The pre-determined amount that the insurer agrees to pay out if your car is written off.
28. Market Value
- The amount your car is worth at the time of a claim, based on its condition and market prices.
29. Personal Effects Cover
- Covers personal belongings in your car that are lost, stolen, or damaged.
30. Uninsured Driver Promise
- A feature where your no claims bonus and excess are protected if you're hit by an uninsured driver.
31. Windscreen Cover
- Insurance that covers the cost of repairing or replacing a damaged windscreen.
32. Driving Other Cars (DOC)
- An extension that may allow you to drive other cars not owned by you, usually with third-party cover only.
33. Protected No Claims Bonus
- An option that allows you to make a certain number of claims without losing your no claims bonus.
34. Insurance Group
- A rating that helps determine your premium based on the car's make, model, and specifications.
35. Gap Insurance
- Covers the difference between the car's market value and the amount you owe on a loan or lease if the car is written off.
Understanding these terms will help you navigate the complexities of car insurance and ensure you secure the right coverage for your needs.
This article is designed to offer general advice and may not apply to every insurance, broker, insurer, cover or policy. You would need to check the individual policy benefits of each cover with your insurer or broker.
