Amendment       

A change to your original policy.

 

Act of God

An ‘act of God’ is a phrase used to describe an event like a natural disaster that wasn’t caused by humans or is out of human control.

 

Annual mileage

Your annual mileage is how many miles you drive your car in a year. Insurance companies will ask for this when you buy a new policy or renew your existing one, as it is used to determine the cost of your premium.

 

Annual premium

Your annual premium is the amount you pay each year for your insurance policy.

 

Approved repairer

A facility approved by your insurer for the repair, damage assessment and/or storage of your vehicle.

 

Black box

A black box is a recording device installed in cars that have telematics car insurance, which is a type of cover that adjusts the price you pay based on where, when, and how safely you drive.

 

Breakdown cover

Breakdown cover is a specific type of insurance that offers help and assistance if your vehicle breaks down somewhere on the road. It helps to cover the cost of any repairs that need to be done or payment required if your car needs to be towed.

 

Broker

A broker is an insurance expert who can provide you specialist advice about what type of cover is right for you. They’re sometimes paid commission by insurance companies, but they should disclose that to you if that’s the case. They may also charge a fee and are regulated by the Financial Conduct Authority (FCA).

 

Cancellation       

Cancelling or ending your insurance policy. You might be charged if you cancel before your policy is due to end – you can find details on this in your policy documents.

 

Claim    

An insurance claim is a formal request that you make to your insurer for coverage or compensation for a loss that is covered by your insurance policy. It is a financial agreement between you and your insurance provider.

 

Car market value

The cost of replacing your vehicle with one of the same make, model, specification, and condition.

 

Certificate of motor insurance

The current document that proves you have motor insurance and is required by the Road Traffic Act so that you can use your vehicle on a road or other public place. It shows who can drive your vehicle, what it can be used for, and if any permitted drivers are allowed to drive other vehicles. The certificate of motor insurance doesn't show the cover provided.

 

CIE (Continuous Insurance Enforcement)

This is a government rule requiring you to have car insurance for your vehicle at all times if you use it on roads or in public places – you’re only exempt if it’s kept off-road and declared as SORN.

 

Classic Cars

A classic car is an older car, usually at least 25 years old, or older.

 

Compulsory excess

This is the amount you have to pay towards any claim, for example the first £100. You agree to this when you take out your car insurance policy.

 

Consumer intelligence

Consumer Intelligence is a company that collects information from car insurance customers. They use this to create a car insurance price index to provide consumers with statistics and figures around insurance.

 

Conviction code

Conviction codes – or endorsement codes - refer to the government’s list of DVLA endorsement codes and how many penalty points you may receive for a driving offence from 1-11. You get more points for more serious offences.

 

Courtesy car

A courtesy car is a vehicle that is loaned to you by your insurance company while yours can’t be driven. This cover supplies a replacement vehicle if your vehicle is being repaired by an approved repairer. It won’t be an exact replacement of your vehicle and we can’t provide it until your claim is accepted. Only people named on the certificate of motor insurance are eligible for a courtesy car.

 

Cover note

This is a temporary document your insurer can issue as proof of insurance until your final documents arrive.

 

Defaqto

Defaqto is an independent researcher of financial products, focused on providing intelligence to support better decision-making.

 

Driving licence

A driving licence is an official government-issued document permitting you to drive. There are different categories of licence that allow you to drive manual or automatic cars, motorcycles, or buses, for example.

 

Dual Insurance

Dual or double car insurance is when the same person or car is insured on more than one occasion at the same time. This usually happens by accident, for example when someone forgets to cancel an auto-renewing policy.

 

Exclusions

Exclusions to your policy are things that your insurer won’t pay for or is not covered in your specific policy. For example, we may not be able to provide any cover for accidents that happen under certain circumstances. Always check your insurance policy documents for what exclusions apply.

 

Fault claim          

A fault claim is any claim made for an accident that is not the driver’s fault, but the cost can’t be claimed from the other party.

 

Financial Conduct Authority (FCA)

The Financial Conduct Authority is a regulatory organisation, independent of the government, that aims to keep financial markets honest, fair, and effective. It oversees financial services firms and markets in the UK.

 

Ghost Broking

Ghost brokers are insurance fraudsters who sell fake car insurance policies, or policies that are quickly cancelled after they’re sold.

 

Immobiliser

An immobiliser is part of a car’s security system. It can stop thieves from starting your car with the incorrect key or hotwiring by stopping the ignition from working.

 

Import or imported vehicle

Imported vehicles are cars bought or transported from another country.

 

Indemnity

Indemnity is when an insurance company promises to cover you for loss.

 

Insurer  

A person or company that insures something or someone against loss or damage.

 

Main driver

The main driver is the person identified on your car insurance policy as the person who most regularly drives the car. It’s important to be honest about this to avoid insurance fraud.

 

Market value     

The cost of replacing the car with another of the same make, specification, model, age, mileage and condition as the car immediately before the loss or damage happened.

 

Named driver

A named driver – or secondary driver - is a person who is added to a car insurance policy and allowed to drive the car but isn’t the main driver of the car.

 

No claim bonus/discount (NCD)

For every year that you don’t make a claim on your car insurance, you could be entitled to a No Claim Discount or bonus, which is essentially a reduction in the price you pay for your insurance. The amount this is worth varies from insurer to insurer. You can choose an add-on that protects your NCD – both the number of years and your discount.

 

Period of insurance

The period of insurance is how long your policy lasts – between your policy’s start and end dates, which you’ll find on your policy documents.

 

Points   

If you commit a motoring offence such as speeding, a number of points will be added to your licence. Your insurer must be made aware of any points on your licence as they usually lead to an increase in the amount you pay for insurance.

 

Pro rata rates

If your car insurance policy entitles you to a pro rata refund after you’ve cancelled mid-term, that means you’ll get a refund for the amount of time you won’t be covered. For example, if you take out a 12-month policy and cancel it after three months, you’ll only be entitled to nine months’ worth of money back.

 

Protected No Claims Discount

This is the name of the add-on cover you can get to protect your No Claims Discount. This cover can be added when you take out your policy, or at renewal.

 

Rating factors

Rating factors are specific things about you and your car that an insurance company takes into consideration when they determine the price of your premium. These include your age, address, job, licence type, if you have any motoring convictions, and your car.

 

Remapping / Chipping (engine management upgrades)

Remapping (chipping) a car is the process of adjusting the microchip in your car to change the factory settings to make it more powerful and fast – it’s a performance enhancement. It can be done quickly and relatively cheaply by a qualified specialist. However, you’ll need to tell your insurer about this – and some insurers may not cover remapped cars.

 

Renewal notice

A renewal notice is usually issued by your insurer about a month before the renewal date to remind you, and basically tells you you’re your premium may change after renewal or any adjustments that may be made to your policy.

 

Risk       

This is the method by which insurance underwriters decide how likely you are to make a claim and how costly this claim is likely to be. The price of your premium will reflect this “risk”.

 

SORN

A Statutory Off Road Notification (SORN) means you’ve formally taken your car off the road by notifying the DVLA, and you don’t have to tax or insure it. To qualify, your car can’t be kept or used on a public road – it must stay in a garage, drive, or on private land. You can make a SORN online, by phone, or by post.

 

SP30

An SP30 is one of the most common speeding offences: exceeding a statutory speed limit on a public road. You can receive 3-6 penalty points for this if convicted, and you need to tell your insurer about any convictions.

 

Telematics car insurance

Telematics car insurance offers you cover based on your driving habits. Your insurer installs a telematics device that monitors your driving and could affect how much you pay based on how safely you’re driving. It’s popular with younger drivers, who tend to have higher premiums.

 

Thatcham device

Thatcham devices are security devices that have been assessed by Thatcham Research and given a Thatcham Security Certification. They include alarms, immobilisers, and other security devices.

 

Third party

Usually, the third party will be the other person besides you who’s involved in an accident, but it can be anyone involved with a claim who isn’t you (the policyholder or driver).

 

Tracker

A tracker is a GPS device that’s fitted to your car so it can be found if it’s stolen. Sometimes, it’s also part of a telematics insurance policy, and tracks your mileage so you pay premiums based on your mileage.

 

TS10

TS10 is the endorsement code for failing to comply with traffic light signals – generally, running a red light. You should always tell your insurer about any convictions.

 

ABI        

Association of British Insurers - is a trade association made up of UK insurance companies.

 

Write off             

A vehicle damaged beyond repair or so badly damaged that it would cost more to repair than the value of the vehicle.