Sometimes it might seem that all the jargon you read regarding car insurance is designed to confuse you. If that’s the case, then we’ve listed most of the common phrases you’ll find in the insurance market place and what they all mean.
Additional Driving Qualifications
Having some of these is a good way of lowering your premium. There are two main ones to consider. Pass Plus is a training scheme for new drivers designed by the Driving Standards Agency (DSA) in consultation with insurers and driving instructors.
Approved Repairer
A garage that meets Zurich’s high standard of repairs. We have a nationwide list of repairers who have a special relationship with Zurich.
Breakdown Cover
This is the assistance that Zurich gives you in the event of your car breaking down. Obviously the levels of cover will differ from depending on your needs. Full details of what we offer are right here.
Certificate of Motor Insurance
This is your legal document proving that your car is fully insured.
Compulsory Excess
In any claim, your insurer will insist that you pay an amount first before they cover the rest of your costs. Most insurers have a standard figure for compulsory excess. Be mindful though that it might be more for young and inexperienced drivers and for cars that belong to higher insurance groups.
Compulsory Insurance
Insurance is legally required for all vehicles on the roads in the UK. Third Party Only cover is the minimum compulsory level of insurance under the Road Traffic Act.
Condition
A clause in your policy which determines the payment of your claim. The “small print”, in other words.
Cosmetic Modification
Alterations made to your vehicle which alter its appearance, such as customised paintwork. This doesn’t refer to things that alter its performance such as engine modifications.
Cover Note
A document that provides temporary proof that your vehicle is properly insured. It is a stop-gap issued while your official documents are being prepared.
Direct Debit
This is a way of collecting payment directly out of your bank account. It enables payments to be spread out over a period of months.
Driver’s Legal Expenses Cover
Legal expenses will cover, for example, the costs of taking an uninsured a third party to court following an accident that wasn’t your fault.
DVLA
Driver and Vehicle Licensing Agency. They issue driving licences and maintain records on vehicle registration.
EU Licence
Local driving licence allowing drivers from the EU to drive in the UK.
Excess
This is the amount you agree to pay upfront if your car is lost, stolen or damaged, irrespective of fault. Your excess is made up of your voluntary and compulsory excess.
Exclusions
Circumstances which aren’t covered by your insurance policy.
First Party, Second Party, Third Party
The first party is you. The second party is your insurer, and the third party is the person or object you’ve had the incident with.
Fully Comprehensive or Comprehensive Cover
This means that you’re covered even if an accident was your fault.
Grey Import
This is a vehicle designed and built outside the EU and imported into the UK. It may not be manufactured to European specifications and may have to undergo tests to make sure it fits all legal requirements.
Gross Vehicle Weight (GVW)
The maximum laden weight of a vehicle, as recommended by its manufacturer.
Guaranteed No Claims Discount
This extra option is an addition to the Protected No Claims Discount, meaning that you can keep your bonus no matter how many claims you submit. This is generally only available for drivers with a very good record.
Immobiliser
An electronic anti-theft device that prevents the car from starting. These are generally standard fittings now in most new cars.
Inexperienced Driver
A person who has only held a full UK or EU driving licence within the last 12 months.
Insurance Broker
An individual or firm who sources insurance for his customers from a panel of insurers.
Insurance Premium Tax (IPT)
A government tax (currently 5% for cars) on all premiums. It is collected by the Insurer.
Insurance Schedule
The document that shows any endorsements on your policy, the vehicle, the drivers etc.
Insured
The person who has taken out the policy.
Insurer
The company who supplies the insurance, who receives the premiums and who will pay out on any eligible claims.
International Driving Permit
This is required in some countries alongside your driving licence. It can be issued by the AA, RAC, RSAC and Green Flag.
Kerbweight
How much your car weighs when empty.
Load Index
A number marked on the sidewall of your tyre. It is an indicator of your maximum load carrying capacity.
Medical Examiner’s Report (MER)
Written proof from a doctor or other medical professional. Such things are often required by your insurance company when it’s considering the validity of your claim.
MOT
An annual test that all vehicles over three years old are legally required to undergo to determine their roadworthiness.
Motoring Convictions
Offences such as speeding that will be detailed on your driving licence. These will affect your insurance premiums.
Motor Insurance Groups
Cars are rated into different groups from 1 to 50. These relate to engine size, age and how attractive the car may appear to potential thieves. The higher up the scale you go, the more expensive the insurance becomes.
Named Drivers
The other people named on your insurance policy who are insured to drive your car.
Negligence
A person is found to be negligent once they have been proven to be at fault of an accident.
No Claims Discount
A reduction in your insurance premium offered to you as a reward for the time you’ve gone without making a claim on your car insurance up to a maximum of 5 years with Zurich.
Personal Possessions
This refers to any personal items that you may keep in your car
Policy
Your legal documentation that explains exactly what your insurance is comprised of. It is a legally binding contract between you and your insurance company.
Policyholder
See Insured
Summary of Cover
An outline of all the major points on your policy.
Pre-Delivery Inspection (PDI)
The checks that car dealers make before delivering a new vehicle to their customer.
Premium
The amount you pay for your car insurance.
Protected No Claims Discount
For extra premium, and subject to meeting Zurich’s criteria, you may be able to keep your No Claims Discount even if you have to make up to 2 claims in 5 years.
Provisional Driving Licence
Issued by the DVLA to people who are learning to drive. They are only allowed to drive provided that they are accompanied suitable person. They must be a fully qualified driver who is over 21 as well as other criteria.
Renewal
Most insurance policies run for a year and need to be renewed at that end of each year.
Responsible Party
The person who is responsible for causing any losses or damage.
Road Tax
This tax has to be paid for all vehicles before they’re allowed on the road and displayed in the vehicle.
Road Traffic Act
The law that stipulates that anyone using the UK’s roads must be fully insured to do so.
Second Party
See First Party Second Party Third Party
Statement of Fact
When you apply for insurance, the details you provide form the basis of your insurance contract. They can be viewed at the end of the quote just before you buy so you can check to make sure all the details are correct.
Third Party
See First Party Second Party Third Party
Third Party Only Cover
The bare minimum cover allowed in the UK. Details here.
Third Party, Fire & Theft
A slightly extended version of the above, it covers you if your vehicle is stolen or has been destroyed by fire. You can read more about it here.
Tracker Device
This device means your vehicle can be tracked and traced if it gets stolen. If your tracker is monitored 24 hours a day then you may receive a discount on your premium.
Uninsured Loss Recovery (ULR)
A type of insurance that protects drivers from potential expenses (such as recovering their excess) when they’ve been involved in an incident that wasn’t their fault with someone who doesn’t have insurance. You may also get cover for other loss recovery, pleasecheck your policy.
Vehicle Identification Number (VIN)
The unique serial number on every vehicle.
Voluntary Excess
An additional amount you may care to pay on top of your Compulsory Excess in return for a lower premium. You can decide how much when you take out your policy.
Write-Off
When an insurer writes off your car, they have decided that it will cost too much to repair it, ie, more than 60% of the car’s worth.
