When insuring your car, it's important that you understand all the different terminology and small print when searching for the policy that best meets your needs. That’s why we've put together this handy car insurance glossary and jargon buster to help you get to grips with car insurance.
An event not caused directly by an individual that causes damage to your vehicle, like flooding or extreme weather. Acts of God are not usually insurable.
The theft of your vehicle by force while either you or your spouse are inside it.
The total number of miles you drive in one year.
A payment you (the insured party) make towards a claim, which will result in the vehicle being worth more than it was previously after any necessary repair work has been carried out.
Help given to drivers in case their vehicle breaks down and leaves them stranded and unable to drive.
An independent, go-between company which organises and sells insurance on behalf of different insurance businesses or banks.
Seems simple, but this can refer to any motor vehicle that we've insured - whether it's a car, truck, van, and so on.
An anti-theft device installed in your car.
Proof of insurance. The certificate of motor insurance shows what car is covered, who is allowed to drive it and what the vehicle can be used for. If your certificate of insurance allows for any driver to drive the vehicle, you need to look at a document known as your schedule (see further down the page) to see if there are any restrictions which could affect this.
An application by you to recover the cost of damages covered by the policy from the insurance company.
The widest ranging type of coverage. This includes third party, fire and theft insurance, and covers your car against any damage caused by an accident or someone else, whether you were at fault or not.
Cover for you and your car, and for third parties and their cars when you're at fault.
Most car insurance companies ask for a compulsory excess payment when setting up your policy. This is the amount you have to pay to your insurer if you're ever in an accident and want to make a claim. If you have a compulsory excess of £250, for instance, then this what you’ll have to pay in the event of a claim.
By becoming familiar with jargon and terms you might find on car insurance documents, you can get a better idea of what your policy involves.
If you make any changes which affect your insurance policy, like changing address, name or vehicle, then you need to tell your insurer straight away. This need is known as duty of disclosure.
This stands for the Driver and Vehicle Licensing Agency, the body responsible for maintaining a database of all drivers in Great Britain, along with a database of vehicles for the whole of the UK. The agency issues driving licenses, sells private number plates and arranges the collection of vehicle excise duty (this is also called the Road Fund Licence).
A section of the insurance document that changes the standard terms offered by the policy. It can remove or add coverage, as well as overwrite anything which is written into the original version of the policy.
The part of a claim you must pay. Excess costs can include compulsory excess and voluntary excess payments.
An event or circumstance in which the insurance company doesn’t have to pay out under the policy.
When you're considered the one to blame for an accident. An example of this could be if you were to hit another driver from behind, or drive into a stationary object.
As the UK's financial watchdog, the FCA regulates financial services companies, including insurance companies.
The areas where your insurance policy is valid.
After you make a claim, indemnity makes sure that you go back to the same financial position you were in before the insured loss.
Tax on nearly all non-life insurance policies (including car insurance policies) that is paid by the policyholder
The total your insurer will pay out for your car if it's damaged beyond repair. This might be how much you told your insurer the car was worth or your car's current market value at the time of the claim
The cost of replacing the car with one of a similar age, type, mileage and condition, immediately before the loss or damage happened.
Remember: if you’re in doubt about any terms that appear on your car insurance paperwork, your provider should be able to clarify their meaning for you.
When you're not considered to be at fault for the accident and your insurer can get back the cost of the claim from the other party.
The length of time that a contract of insurance applies for.
The contract or document between the insurance company and the policyholder
The person shown in the policy details.
The amount the policyholder pays for insurance.
The notice sent by your insurance company inviting you to renew your policy
This forms part of the contract of insurance and states the period in which it’s valid, the parts of the policy which apply to you, your car’s details and any information on your excess and endorsements
The amount your insurer pays out for a claim.
A form showing information that you either gave the insurer or was given on your behalf. The statement of fact forms part of the contract of insurance.
Technology that remotely monitors your driving. Insurers can then use this information to look at potential risks and calculate your premium.
Someone who is involved in the claim but isn't the policyholder or the insurer
The minimum level of cover required to drive on UK roads, third party will cover injury to anyone else involved in an accident and damage to their vehicle or property.
Cover that provides the same level of cover as third party only, as well as protecting you against damage to your vehicle from fire, theft or another vehicle, as long as you're not at fault.
When the insurance company thinks a car is beyond repair, or that it will cost more to repair than to replace.
Any losses which aren’t covered by your insurance policy. This would include the excess, expenses following an accident (like loss or damage of jewellery, for example) or compensation for injury caused by an accident.
Insurance specifically for vans.
Insurers will often offer you a reduction in your premiums if you agree to pay a voluntary excess payment in the event of an accident, along with your compulsory excess. Generally speaking, the higher the voluntary excess, the lower your premium.
The person shown in the policy details.