Making Sense of Insurance Jargon
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 are 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 really means.
Insurance Jargon A-Z
A – Annual Mileage: Your estimate for how many miles you drive in a year. If you drive more miles, there is a higher chance of you having an accident, so your insurance premium may go up.
B – Breakdown Cover: Some insurance policies include cover for if you break down. This can either include roadside assistance for if you are out and about, or home assistance for if your car will not start.
C – Comprehensive: Insurance that covers both third party, fire and theft, as well as the accidental damage to the driver’s vehicle.
D – Disclosure: If you make changes that affect your insurance policy, you need to inform your insurer. These include changing address, changing a vehicle, changing a name and more.
E – Exclusions: There are certain types of risks that insurance companies will not pay out on. If there are exclusions on your policy, they will be spelled 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.
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.
I – 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 insurance, as they are perceived to have different levels of risk.
K – Knock for Knock: Sometimes, insurers agree to cover damage costs to their policy holders, regardless of who is considered to blame.
L – License: There are different types of driving licences. You need to have the appropriate one for the type of vehicle you drive.
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 principle risk on the policy.
N – No Claims Bonus: Insurance companies like to reward policy holders who do not need to make a claim. This is in the hope that they will continue to not need to do so. A no claims bonus generally gives you a discount on your insurance premiums.
O – Owner: 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.
P – Period of Cover: Insurance policies last a specific length of time, as described in the policy documents you receive. These range from between a few hours to a year.
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 – Risk: Insurance is based on the principle of risk. Insurers want 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 premiums to make up for the increased risk.
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 that is deemed to be your fault. It does not cover your own property, however.
U – Underwriter: An insurance policy is said to be ‘underwritten’ by an underwriter. This is the company who provides the insurance cover for your policy.
V – Voluntary Excess: When you agree to an insurance policy, you agree to take on a voluntary excess. This is the amount of the cost of a claim that you will have to pay yourself. The insurer pays the cost above this claim.
W – Windscreen: Some 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.
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 insurance policies as simple and understandable as possible. If you are uncertain of what a term in our insurance policies means, don’t hesitate to get in touch, and we will be happy to explain it for you.