Car Insurance

The A-Z of Car Insurance Jargon

Aggregator
A company, which puts together information from consumers to enable them to provide car insurance quotes.

Alarm
A car alarm is a theft deterrent, which makes noise and flashes lights when the safety of a locked car is compromised, providing warning to passers by and the owner. Alarmed vehicles can sometimes be cheaper to insure from car insurance companies than those that aren't.

Ancillaries (optional extras) These are products that are related to cars that can be offered, such as breakdown cover, all available from most car insurance companies, which they add onto your premium.

Annual mileage and annual business mileage
The vehicle mileage is important to insurers as the more time the vehicle is on the road, the more chance it had of an accident. Annual mileage is the total number of miles a vehicle does within a year. Annual business mileage is related to the number of miles a vehicle does due to its business needs.

Broker
A broker is person or company acting separately between you and the car insurance company. The reason brokers exist is to negotiate the best deal for the consumer, using their expertise in the field.

Certificate of insurance
This is piece of documentation that states a vehicle is insured within legal requirements.

Conviction code
Conviction codes are 4 digit codes found on the driving licence – they are a mix of letters and numbers.

Cover Note
This is a temporary document that is valid whilst any certification is being prepared by an motor insurer.

Cover types;

Third party only (TPO)
This insurance covers any damage to other vehicles – not your own.

Third party fire and theft (TPFT)
This car insurance covers any damage to other vehicles - as well as any fire damage or theft to your own vehicle.

Comprehensive (Comp)
This car insurance covers any damage to other vehicles – as well as any fire damage or theft to your own vehicle plus any accidental damage to your vehicle.

Driving other cars (DOC)
DOC is used in emergency for driving cars that you are not insured on and appears on your insurance certificate.

DVLA
Driver & Vehicle Licence Agency. www.dvla.gov.uk

Endorsement Any changes to the car insurance policy itself that are made.

Excess
Excess is a contribution to the cost of fixing damages that you must make, not the insurance company. There are two different types of this contribution;

Compulsory
An amount you must pay towards the fixing of damages (it varies on age, car and situation) Voluntary – An amount you agree to pay towards damages once given the quote. This can decrease your premium if you pay the majority of the claim made.

Fault or non-fault claim
Insurance companies need to be able to recover their costs from a third party. However, if there is no third party to claim from then the victim must claim under a fault claim. This occurs even though they are for all means and purposes not responsible for the damage or theft.
A non-fault claim is therefore when an insurance provider can recover costs from a third party.

Green card
If planning to drive abroad then you will need some form of cover from your car insurer. Most car insurance policies offer a level of insurance abroad but these needs to be checked if it exists and to what level before travel.

Hot Hatch
A hot hatch is a hatchback with changed specifications including; Wider tyres, powerful engine, altered suspension and racing features.

Immobiliser
A car immobiliser is a device that will disable the engine of your vehicle if tampered with or the car feels it is not being turned on or opened in an acceptable manor; Such as tampering with the ignition.
Car insurance companies may offer discounts, similar to an alarm with cars that have this feature.

Import or imported vehicle
UK-specification; Cars made to suit the acceptable UK specs.
Non-UK specification; Cars brought into the UK that have different specifications to those in the UK.

Indemnity
Indemnity is a protection against loss and damage through the form of compensation. This generally means that the insured individual is given compensation to make sure they are put back into the same financial state they were in before the loss of money.

Insurable interest
Insurable interest is where a vehicle has to be your own possession. This is due to the fact if it wasn’t and then it was damaged then you would incur no financial loss.

Insurance intermediary
See broker

Knock for knock
Knock for knock is an agreement where each motor insurer pays for the damage made to the policyholder’s car. This payment is only made when the policy covers the damage made respectively.

Kit-Car
A kit-car is a vehicle that is bought in parts which is then put together by the consumer. These cars usually require a specific and specialist car insurance firm.

Legal expenses cover
Legal expenses cover is insurance that would not normally fall within a consumer’s policy. This insurance covers issues such as legal costs and injury costs.

Licence type
There are various driving licences available for the driving of various vehicles in various locations.

Material fact
Material fact is where the major user of a vehicle should be classified as the main driver of the car. An individual’s past actions and information can change the driver’s premiums hugely. Material fact can also be seen as a specific action in the history of a driver such as driving convictions.

Modifications
Modifications are changes to a vehicle carried out independently of the manufacturing floor. The change of the cars specifications could alter the insurance premium offered on a car insurance quote. These modifications include; alloys, sunroof, spoilers and tinted windows.

No claims bonus (NCB)
A no claims bonus is where a driver has secured a policy, which they have not claimed upon for a period of time. Usually based around a years timescale. Therefore the NCB is where drivers are rewarded for not claiming on their insurance.

Optional extras
Please refer to ancillaries

Owner registered keeper
The owner and registered keeper of a vehicle is usually the same and referred to as the proposer. However, this is sometimes not true of company cars where the owner is the company and the keeper is the employee.

Pass Plus
Once a consumer ha passed their test, they are able to take lessons called 'pass plus'. These lessons will reduce the driver’s premium from their car insurance company.

Points
If a driver is convicted of a driving offence then depending on the severity of the crime, they will receive points on their licence. The number of points a driver has will affect the premium they will be quoted by a motor insurer.

Prosper
The person who is granted the car insurance quote is known as the Prosper. Sometimes the Prosper is known as the Policyholder also.

Protected no claims bonus
Once you have accumulated a significant no claims period, some car insurers will let you protect this so if you then claim is noted that you still had a period of time with no claims. However, this cannot always protect your premium rates.

Q-Plate
Some vehicles have Q registration plates; these are usually;
1. Built from unknown parts, unknown ages, or insurance write offs.
2. 2. Stolen/recovered vehicles.
3. Ex-military vehicles (Including Ex-Army, Ex-Navy & Ex-RAF Land Rovers and other forces vehicles.
4. Imported vehicles.

Rating
Motor insurers will provide a 'rating' for their consumers, taking into account factors such as driving history, vehicle, age to determine their offered premium rates. Similar to a credit check on a loan to determine interest rates.

Registered Keeper
Please refer to Owner and registered keeper.

Risk
By looking at the drivers history and 'rating' a car insurer is able to assess the risk in insuring an individual – taking into account various factors from the driver, to location, to vehicle.

Road Traffic Act (RTA)
In 1930 the Road Traffic Act was passed to compensate victims of road traffic accidents.

Satellite navigation
Satellite navigation or 'sat nav' is viewed as a risk for insurers due to its attraction to thieves and its possible qualification as a modification.

Security
Please refer to Alarm, Immobiliser or Tracker

Stripped down policy
This policy is where the bare minimum is offered in terms of cover. A no frills offer excluding items such as windows, interior items etc. This will reduce a premium. This offer is sometimes associated with a higher excess level to further reduce the premium.

Sum insured
This is the full amount that a car insurance firm will pay out if claimed upon.

Third party
The third party is the person involved in any incident that is not the policyholder or the car insurance firm.

TPFT cover
Please refer to cover type

Tracker
Trackers are vehicle-tracking systems. These are small devices that are placed within a car and can be tracked via GPS to locate a lost or stolen car. These gadgets can also decrease a premium.

Use
The various uses of a vehicle can affect the premium. This is due to it could determine the length of time a car is on the road, and therefore more likely to be involved in an incident. These include;
- Social
- Commuting
- Business
- Door to Door

Underwriter
The car insurance employee who calculates a consumer’s premium.

Voluntary excess
Please refer to Excess

Write-off
A vehicle that is in such a damaged state, it would cost more to fix the damage than the real-terms value of the car before the accident.

Yearly premium
This is the amount paid yearly to a car insurance company.