Car insurance mumbo jumbo

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Posted by Holly West-Robinson on 27 July 2016

Buying car insurance for a new driver can be quite daunting when you read through that first batch of policy documents! Often you'll end up scratching your head and sitting there trying to decipher what half of it actually means! Although the lingo is pretty much the same in all types of insurance, we thought we would try and break some of the key jargon phrases down and simplify it into more digestible terms for you

ABI Association of British Insurers - Group of insurers who provide approx. 90% of domestic insurance services in the UK.

BROKER Agents who sell and act on behalf of insurers.

BUSINESS USE When the vehicle will be driven for work related activity.

COMPREHENSIVE Highest level of cover which insures you for everything in TPFT as well as accidental damage to your own vehicle, medical expenses and accidents cause by passengers or named drivers on a policy.

COMMERCIAL TRAVELLING Similar to business use but designed to cover you in every aspect of your job (for example - delivering goods or door-door sales)

CERTIFICATE OF MOTOR INSURANCE A legally required document that proves your car is insured.

DVLA Driving Vehicle & Licence Agency.

EXCESS An amount of money agreed to be paid by the policyholder that will be paid towards the sum of the claim.

ENDORSEMENT A clause which can be added to a policy to increase, restrict or delete certain covers (for example: - Some companies will restrict theft cover if you have declared you have a security alarm and the device wasn't in use at the time the car was stolen.

FCA - Financial Conduct Authority The regulator of financial services in the UK.

IPT - Insurance Premium Tax A tax applied to all general insurance premiums on top of the overall premium.

INSURED VALUE The maximum cost an insurer will pay to replace an insurable asset if it is deemed as a total loss (such as a car)

MODIFICATIONS Alterations made to a car that aren't the manufacturer's original specifications. Find out more about modifications here!

NCB No claims bonus.

NCD No claims discount.

OWNER & REGISTERED KEEPER The person who owns the car and the person who drives it the most.

PREMIUM The overall price you pay in a year for your insurance.

Q PLATE When the vehicle's age is unknown or it is made up of too many different parts to have an identity.

SETTLEMENT The amount of money an insurance company pays to the insured person within the guidelines of the insurance policy

SCHEDULE A document that lists the policyholder's details, the type of insurance cover, the excess amount and sums of cover, i.e. annual mileage, the amount you are covered up to in terms of legal liability, medical expenses etc)

SECURITY DEVICE A device that helps to keep the car safe from being stolen or broken into, i.e. an alarm, an immobiliser, a steering wheel lock or a wheel lock.

THIRD PARTY A type of cover that insures you for injury to someone or damage to someone else's car or property.

THIRD PARTY FIRE & THEFT (TPFT) A type of cover that insures you for injury to someone else and damage to someone else's car or property, this also covers your own vehicle in the event of theft, attempted theft or fire.

TYPES OF USE What the car will be used for i.e. business use (commuting to other work offices or sites), social use (every day driving such as seeing friends & family, road trips and hobbies)

TELEMATICS A small device fitted to a vehicle which monitors the driver's behaviour, also known as a black box!

UNDERWRITER The people who evaluate the risks and determine everyone's insurance premiums.

These are the main phrases and words you would be likely to come across in your insurance documents. We hope this gives you a slightly better understanding of what some of them mean!

About the Author

Holly West-Robinson
Holly West-Robinson

Hi I'm Holly and I'm a young driver based in Peterborough! I love tattoos, food, drawing and anything art related, enjoy hanging out with friends and family and making a fool of myself XD I'm a huge lover of music and also a part time DJ in the underground drum and bass scene. I passed my driving test first time when I was 17 years old have been loving life and my new found freedom ever since! I'm definitely one of the adventurous types who's always up for a good old road trip!