Don’t be left confused by complicated terminology – read our car insurance jargon buster
Black box insurance
This entails having a small device fitted to your car to allow insurers to factor in your acceleration, mileage and other areas of your driving into the cost of your premiums. This type of insurance is often popular among young drivers. See also: telematics insurance and pay as you go car insurance.
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.
A car insurance claim is the formal application you make to your insurer for payment for a loss that’s covered by your policy.
Another term for insurance, e.g. “Your cover will start on 21 March”.
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.
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.
An event or circumstance in which the insurance company does not have to pay out, e.g. “This policy does not insure…”
An electronic anti-theft device that’s activated when the ignition key is removed.
The document that describes the details of the cover your insurer provides, as well as the information that you’ve given to your insurer.
The person who is insured, or whose car is insured – they are often referred to as the policyholder or proposer.
The company that issues the insurance policy and pays out for any claims.
The cost of replacing your car with another of the same make and model and of a similar age and condition.
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.
Pay as you go car insurance
Also known as pas you drive insurance. See black box insurance.
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.
The document setting out the legal rights and obligations of you and your insurer.
The person that holds the insurance policy.
The amount you pay for your insurance – this can be paid monthly or as a full upfront payment.
See insured or policyholder.
When your current insurer lets you know that your cover is coming to an end and invites you to renew your policy.
The maximum amount of money your insurer will have to pay out when you make a claim.
Telematics car insurance
See black box insurance
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.
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.