Making Sense of Insurance Jargon

Vehicle Insurance can be complicated. There are so many terms, ideas and specialised pieces of information. Making sense of them all can make it hard to choose the right policy for you. GoShorty is determined to help make sense of insurance for our customers. 

Here is our handy insurance jargon A to Z guide to help you figure out what your insurance coverage really means.

Insurance jargon explained

A –

Accidental Damage Cover

Covering goods where damaged is caused isn’t expected or deliberate.

Annual Mileage:

Your estimate for how many miles you drive in a year. If you drive more miles, there is a higher chance of having an accident, so your car insurance premium may go up.

Annual Policy

A policy paid for by the year rather than by month. 

B – 

Breakdown Cover: 

Some insurance policies include cover for if you break down. This can either include roadside assistance if you are out and about, or home assistance if your car will not start.

Business Use:

You are insured to use the car for work-related driving such as travelling to clients or between different working locations.

C – 

Claim: 

A formal request of payment from the insurer under the policy conditions.

Comprehensive Cover: 

Insurance that covers both third party, fire and theft, as well as the accidental damage to the driver’s vehicle.

Courtesy Car Cover:

An add-on in which you’ll be provided with a replacement car whilst your vehicle is being repaired. 

Cover Type:

The different types of car insurance cover include Third Party Only, Third Party Fire and Theft, and Comprehensive/Fully Comprehensive. 

D – 

Disclosure: 

If you make changes that affect your insurance policy, you must inform your insurer. These include changing address, changing a vehicle, changing a name and more.

DOC Cover:

DOC stands for driving other cars. If this is included on your insurance policy, you are covered to drive cars other than the primary vehicle stated in the policy. 

DVLA:

The Driver and Vehicle Licensing Agency is an executive agency of the Department for Transport and is responsible for the database of vehicles and drivers. They issue driving licenses and vehicle registration documents. 

E – 

Excess:

The amount you will pay towards any claim. This includes compulsory and voluntary excess.

Exclusions: 

An insurance company will not pay out on certain types of risks. If there are exclusions on your insurance policy, they will be spelt out in the policy T&C’s.

F – 

Fault:

If an insurance company is unable to recover their costs against a third party, they label the claim a fault claim. This is not indicative of who caused the incident.

Fronting:

Adding a driver to an insurance policy as a named driver to bring down the premium. This is considered fraud, and you can be subject to legal consequences.

G – 

Green Card: 

A document that proves you are insured to drive your car in most European countries, including all of the EU.

H – 

Handling: 

When you make a claim, it goes through claims handling. This is the process of gathering information on your claim. This can either be handled internally or externally to your insurer.

Highway Code:

This list of rules and legal requirements applies to all drivers, pedestrians, horse riders, cyclists, and motorcyclists. All road users should be familiar with the laws of the road and any highway code changes.

I – 

Immobiliser:

An electronic security device that helps stop the engine from starting and prevents theft. This is usually factory fitted by the manufacturer. 

Indemnity: 

Indemnity exists to ensure that if something is lost or damaged, the owner returns to the same financial position they were in before the loss occurred.

J – 

Job Title: 

Insurance companies are concerned with your job title. Different job titles can affect the price of your car insurance, as they are perceived to have different levels of risk.

K – 

Knock for Knock: 

Sometimes, insurers agree to cover damage costs to their policyholders, regardless of who is considered to blame.

L – 

License: 

There are different types of driving licences. You need to have the appropriate one for your vehicle type.

Legal Expense Cover:

Insurance against legal costs you may incur if you consult a lawyer. This is sometimes included in an insurance policy or may be available as an optional add-on. 

M – 

Main Driver:

Your policy needs to have one person listed as the main driver. This is the person who uses the car the most, and as such is the principal risk on the policy.

MID: 

The Motor Insurance Database contains a list of all insured cars in the UK. Insurers will supply information to the Motor Insurance Database within two weeks for new policies. The police rely on this insurance database and can perform a MID check to assess whether you’re adequately insured.

Modifications:

Any changes made to your vehicle that aren’t supplied as factory standard. This can include alloys, body kits and spoilers. When applying for insurance, you must state any modifications that have been made to your vehicle. 

N – 

No Claims Bonus: 

Insurance companies like to reward policyholders who do not need to make a claim. This is in the hope that they will continue to not need to do so. No claims discount generally reduces your premium for not claiming on your insurance policy. The longer the period you don’t claim, the higher the discount. 

No Claims Bonus Protection:

This is often an optional extra to your car insurance policy. You pay to protect your no claims discount, so you don’t lose the benefit if you do have to claim. 

Non-Fault Claim:

When you have been involved in an accident where the other driver is at fault. 

O – 

Owner: 

Car Insurance policies often refer to the ‘owner and registered keeper’ of a policy. This is the person named on the V5C document (often known as a logbook) as the official owner of the vehicle.

Optional Extra:

Additional policy benefits that you can purchase alongside the main policy.

P – 

Period of Cover: 

Insurance policies last a specific length of time, as described in the policy documents. These range from between a few hours to a year.

Points:

If you’ve been convicted of a motoring offence, points will be added to your driving license. You must make your insurer aware of any points on your license.

Premium:

This is the amount you pay to insure your vehicle.

Q – 

Quote: 

Insurers do not have a set list of prices. Because every insured person and object represents a different type of risk for an insurance company, insurers need to produce a tailored quote for each customer.

R – 

Registered Keeper:

The person who uses the vehicle the most. It is their legal liability to license the vehicle and declare it as off the public road (SORN). They are the contactable person if charged with any motoring or parking offences. This registered keeper doesn’t have to be the owner of the vehicle.

Risk: 

Insurance is based on the principle of risk. Insurers don’t want to have to pay out, so they try to determine how likely it is that they will need to. If they determine that something is a higher risk of needing to make a claim, they will usually charge higher insurance premiums to make up for the increased risk.

Renewal Date:

The date that your policy ends unless you have renewed your policy.

S – 

SORN: 

If you don’t use or keep your vehicle on public roads, you need to complete a Statutory Off Road Notification (SORN). This is particularly relevant if you only keep a vehicle in a garage, on private land or in a garage.

T – 

Third-Party: 

Third-Party insurance covers damage to other vehicles and people in an accident deemed your fault. It does not cover your own vehicle, however.

Third-Party, Fire and Theft:

Provides fire and theft cover as well as third party cover.

Tracking Device:

A security feature that can help police locate your car if it has been stolen.

U – 

Underwriter: 

An insurance policy is said to be ‘underwritten’ by an underwriter. This is the company that provides the insurance cover for your policy.

Uninsured Losses:

These are items which are not covered by the insurance policy.

V – 

Voluntary Excess: 

When you agree to an insurance policy, you agree to take on a voluntary excess. This is the cost of a claim that you will have to pay yourself. The insurer pays the cost above this claim.

W – 

Windscreen Cover: 

Some car insurance policies cover you for the cost of damage to your windscreen, while others do not. This is sometimes an additional extra, but should be laid out in your policy terms and conditions either way.

Write off:

A vehicle that is not repairable, is unsafe to repair or would cost more to repair than it would replace. 

X –

Y –

Z –

Temporary insurance from GoShorty

Making sense of insurance jargon can be hard. There might always be terms and ideas that you might not have heard before. At GoShorty, we strive to make our temporary car insurance policies as simple and understandable as possible. 

If you are uncertain of what a term means in our short term car insurance, learner driver insurance or temporary van insurance policies, don’t hesitate to get in touch, and we will be happy to explain it to you.

Get a temporary insurance quote for your vehicle today.