Don’t be left confused by complicated terminology – read our car insurance jargon buster
Certificate of insurance
A document issued by your insurer that proves you have valid car insurance – it also includes who can drive the car and what it can be used for.
Comprehensive car insurance
Comprehensive car insurance, or ‘fully-comprehensive’ insurance, is the highest level of cover available and insures you against the cost of repairing or replacing your car if it’s involved in an accident, regardless of blame.
Compulsory excess
See excess.
Claim
A car insurance claim is the formal application you make to your insurer for payment for a loss that’s covered by your policy.
Cover
Another term for insurance, e.g. “Your cover will start on 21 March”.
Cover note
When you take out car insurance your insurer will issue a cover note as temporary evidence that your car is covered by the insurance policy.
Excess
The amount you’ll have to pay towards the cost of any insurance claim. There are two types of excess – voluntary, which means you can decide whether to include one and its amount, and compulsory, which is set by the insurer.
Exclusion
An event or circumstance in which the insurance company does not have to pay out, e.g. “This policy does not insure…”
Immobiliser
An electronic anti-theft device that’s activated when the ignition key is removed.
Insurance schedule
The document that describes the details of the cover your insurer provides, as well as the information that you’ve given to your insurer.
Insured
The person who is insured, or whose car is insured – they are often referred to as the policyholder or proposer.
Insurer
The company that issues the insurance policy and pays out for any claims.
Market value
The cost of replacing your car with another of the same make and model and of a similar age and condition.
No-claims bonus
For each year you have car insurance and don’t make a claim you’ll build up a ‘no-claims bonus’, which can get you a discount on the following year’s premium.
Protected no-claims bonus or no-claims discount
If you have four or more years no-claims bonus you may be able to pay an extra amount to ‘protect’ it, allowing you to make an insurance claim without it affecting your no-claims bonus.
Policy
The document setting out the legal rights and obligations of you and your insurer.
Policyholder
The person that holds the insurance policy.
Premium
The amount you pay for your insurance – this can be paid monthly or as a full upfront payment.
Proposer
See insured or policyholder.
Renewal notice
When your current insurer lets you know that your cover is coming to an end and invites you to renew your policy.
Sum insured
The maximum amount of money your insurer will have to pay out when you make a claim.
Third party car insurance
Normally the lowest type of insurance cover required by law. It insures you if you’re involved in an accident and injure someone and also covers the cost of repairing or replacing the other person’s car – it doesn’t cover damage to your own car.
Third party, fire and theft car insurance
The same as third party car insurance but provides additional cover if your car is stolen or damaged in a fire.
Underwriter
The underwriter works for the insurer and uses data to assess the risk of potential car insurance policyholders. They decide whether or not to accept the potential policyholder’s risk and provide them with insurance cover.
Voluntary excess
See excess.
