Car insurance glossary and jargon buster​

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.

    Published:11 July 2023


    Aggravated theft

    The theft of your vehicle by force while either you or your spouse are inside it.

      Annual mileage

      The total number of miles you drive in one year.


        When a vehicle is worth more than it was previously worth after any necessary repair work carried out after an insurance claim.

          Breakdown cover

          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.

                Car insurance groups

                Every make and model of car on UK roads will have been assigned to a car group based on certain criteria. Insurers will use the number of your car group along with other factors to calculate your premium.

                You can find out more in our handy guide to car insurance groups.

                  Car alarm

                  An anti-theft device installed in your car.

                    Certificate of Insurance

                    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 the policy holder to their insurance company for cover following a loss caused by an insured event.

                        Comprehensive cover

                        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.

                          Comprehensive insurance

                          Cover for you and your car, and for third parties and their cars when you're at fault.

                            Compulsory excess

                            A compulsory excess payment is the amount you would contribute towards your claim, the amount of the compulsory excess is usually set by the insurer and is in addition to any voluntary excess that you may choose.

                              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.


                                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.

                                        Fault claim

                                        This could be an incident where you’re considered the one to blame. It could also be for those incidents where the insurance company can’t fully recover the amount that they have paid to settle your claim.

                                          Financial Conduct Authority (FCA)

                                          As the UK's financial watchdog, the FCA regulates financial services companies, including insurance companies.

                                            Geographical limits

                                            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.

                                                Insurance premium tax

                                                Tax on nearly all non-life insurance policies (including car insurance policies) that is paid by the policyholder.

                                                  Insured value

                                                  The total your insurer will pay out for your car if it's damaged beyond repair. This is your car’s current market value immediately prior to the time of the claim.

                                                    Market value

                                                    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.

                                                        Non-fault claim

                                                        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.

                                                          Period of insurance

                                                          The length of time that a contract of insurance applies for.


                                                            The contract or document between the insurance company and the policyholder. This also includes the schedule and statement of fact.


                                                              The person that we have contracted with and shown as the policyholder on the policy documents.


                                                                The amount the policyholder pays for insurance.

                                                                  Renewal notice

                                                                  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.

                                                                        Statement of fact

                                                                        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.

                                                                            Thinking about buying car insurance?

                                                                            Third party

                                                                            Someone who is involved in the claim but isn't the policyholder or the insurer.

                                                                              Third party only

                                                                              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.

                                                                                Third party fire and theft

                                                                                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.

                                                                                  Total loss

                                                                                  When the insurance company thinks a car is beyond repair, or that it will cost more to repair than to replace.

                                                                                    Uninsured losses

                                                                                    Any losses which aren’t covered by your insurance policy. This would include the excess, expenses following an accident (like loss or damage of jeweller. For example). This also includes compensation for injury to the policyholder caused by an accident when they’re at fault.

                                                                                      Van insurance

                                                                                      Insurance specifically for vans.

                                                                                        Voluntary excess

                                                                                        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.

                                                                                          You, your

                                                                                          The person that we have contracted with and shown as the policyholder on the policy documents.

                                                                                            Important information

                                                                                            The content on this page aims to offer an informative introduction to the subject matter but does not constitute expert financial advice specific to your own situation. All facts and figures were correct at time of publication and were compiled using a range of sources.

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