When you are looking for the best UK car insurance, it can be
difficult, especially dealing with all the insurance jargon you find
in your search. This guide is designed to help you understand car
insurance so you can find the best possible coverage. In order to
help you avoid confusion, here is your own car insurance jargon
buster, alphabetically arranged with all the car insurance
vocabulary you need to know.
Annual Mileage/Annual Business Mileage Usually before a company
will offer you a free quote on car insurance, they usually want to
know if your vehicle is used for work purposes. If it is, then they
will also want to know the average distance you drive for business.
The more you drive each year, the more likely you are to have a
claim. In the event that your car is never used for wok, this number
will be a zero.
Broker Many of the UK insurance companies sell car insurance
through brokers, also known as intermediaries. Usually a broker will
be able to access a variety of different companies and can help you
compare car insurance quotes. Some brokers may even be able to
negotiate you a better rate on your cover.
Certificate of Insurance When you pay for your insurance, whether
online, on the phone, or by direct debit, then you will get a
Certificate of Insurance. This proves that you have valid insurance.
Cover Note If you have not paid for your insurance yet, but you
have already promised that you will pay it, you will get a temporary
certificate of insurance. Many companies that allow you to purchase
insurance online allow you to print a cover note until you receive
your certificate of insurance.
Cover Types When you purchase car insurance, you want to get the
right type of cover. The wrong cover may result in your claim being
denied. There are three types of insurance that are quite common.
(Fully Comp) Comprehensive This covers third
parties, fire, theft, and any damage to your car too.
(TPO) Third Party This type of insurance does
not cover your car, but it does cover any claims that are made
by a third party.
Driving Other Cars This will only to apply to the person who
actually holds the insurance policy and allows them to drive a car
that they do not own. However, only TPO insurance is provided in
this case. Vans and Lorries are not covered, and you cannot use it
abroad either. This type of insurance should only be used in an
emergency. To see whether you have this coverage, check your
certificate of insurance.
DVLA Codes These are conviction codes that you can find on your
drivers license. Usually these codes include four figures and have
both numbers and letters. For example, TS10 is a code that shows
traffic signal offences and SP30 is the code that shows that you
were speeding in an area that was built up.
Excess The excess is the amount of money that you will have to pay
if you make a claim. Amounts of excess may vary between insurers. In
some cases you may be able to lower the cost of your cover if you
choose a higher excess. See Voluntary Excess for more information on
this topic.
Fault/Non-Fault Claim These terms can be quite confusing. A claim
that is non-fault is a type of claim that allows you to recover your
costs from another person. If you cannot recover these costs, then
it is a fault claim, even if the claim was not your fault. Theft is
a type of fault claim even though you are not to blame for the
problem. However, since there is no one else to pay, it is
considered to be a fault claim.
Foreign Extension See information on Green Card
Here
Green Card A green card is something that usually will be needed
if you are driving overseas. It proves that you do have car
insurance. This car is actually free and it shows that you have at
least some type of cover for the car you are driving. Usually you
only get third party cover while you are abroad; however, at least
this provides some insurance. Most of the time you will have to pay
for this type of coverage, and it is usually hard to get online as
well.
Hazard When it comes to car insurance, a hazard is something that
may affect loss, injury, or even damage. Usually a TVR that is high
performance is considered to be a great hazard than a Ford Fiesta.
Also, a young driver will be considered a great hazard than a driver
with more experience. If the hazard is greater, then your premium
will be higher to.
Immobiliser Many people use an immobiliser to keep their car
secure. It is a special electronic device that keeps a car from
being started until the device is deactivated. Someone may still
break into your car, but it will be difficult for someone to drive
away in the car. Many newer cars now come with an immobiliser and
having one can lower your insurance costs.
Import If you have an imported vehicle, it can be hard to find
coverage. Some companies offer no coverage for imports and others
have a surcharge for them. There are two different types of imported
cars:
UK Specification Cars these cars are imported
into the UK, but they match all of the UK specifications. There
are some companies that will insure these cars.
Non-UK Specification Cars These cars are also
imported; however, they do not match UK specifications. They can
be harder to insurance since it is hard to find parts for these
cars.
Indemnity Basically this is the main principle
when it comes to insurance. Indemnity basically seeks to make sure
the insured is restored to their previous financial condition before
the loss.
Institute of Advanced Motoring The Institute of Advanced Motoring,
or IAM, allow drivers to take another more advanced test. Taking and
passing this test can help you to receive discounts on your UK car
insurance.
Insurable Interest This term deal with ownership of property that
is insured. One example of this is a financial institution. If they
helped to pay for a vehicle, then they will have an insurable
interest in it.
Car insurance can be bought online if you have a provisional
license. Once you pass, you must let your insurance company know so
that your insurance remains valid. If you take a Pass Plus test or
an IAM test, you may be able to get a discount.
Main Driver The person who uses a vehicle the most is the main
driver. You should always be honest when naming the main driver or
your insurance company may reject a claim.
Material Fact This refers to any factor that may affect the
companys decision to provide you with car insurance. According to
UK law, you are required to let your insurance company know about
any material facts, including car modifications and license points.
Your company can refuse to pay on a claim if new facts come to light
that you have hidden.
Modifications A modification is any type of change to your car
that has occurred since it was originally produced. These can
include spoilers, engine modifications, and even alloy wheels.
Motor Insurance Bureau The Motor Insurance Bureau (MIB) is funded
by the insurance industry and has been set up to help people who
have to pay out of pocket for accidents that involve a driver that
is uninsured. This fund helps those who cannot recover all the money
from their insurer; however, a ₤300 excess will be required. Not
only does it help to recover costs, but also allows victims the
opportunity to claim more than the level of personal injury
compensation offered by car insurance companies.
No Claims Bonus Many insurance companies will give a discount to
drivers depending on how many years they have been without claims.
For every insured car, you must ear a separate no claims bonus.
There are some companies that will give you credit or a discount on
a second car if your record shows that you have been claims free.
Owner and Registered Keeper In some cases, the owner and
registered keeper may be a different person. You may keep a company
car at home that is actually owned by your company. In this case,
you are the registered keeper of the car. Other situations may
include a parent owning a car that is kept by a child. This is
important to be aware of, since come companies may not insure cars
online if the registered keeper and the owner are two different
people.
Off Screen Rates See information on Screen Rates
Points If you commit any type of driving offence, such as
speeding, points will be added to your license. The more points you
have, the higher your premium will be, since you are considered to
be a higher risk.
Pro Rata Rates If you cancel a policy, some times you may only get
charged for the time you were covered, instead of the whole policy.
Protected No Claims Bonus There are some companies that may allow
you to protect your no claims bonus discount. This allows you to
have a specific number of claims in a certain period of time without
changing your discount. This will not keep your premium from rising
when you make a claim; however, you will still get the bonus
discount.
Rating Factors These are factors that underwriters use to decide
what the price of your UK car insurance will be.
Registered Keeper See information on Owner and Registered Keeper
Risk When UK insurance is offered, the risk of a driver is
assessed. The insurers look closely at the details of the driver and
decide how likely they are to make a claim. Usually much of this is
based on how many claims they have had in the past.
Road Traffic Act The Road Traffic Act (RTA) actually governs all
of UK car insurance. It first came into effect in 1930 to make sure
that victims or car accidents were compensated. Later it was amended
in 1972 to cover passengers in the vehicle, and once again in 1988
to cover the property of third parties too. Having RTA cover is the
minimum coverage that you can have in the UK and it covers injuries
and death to third parties, third party property damage, and also
emergency medical costs.
Screen Rate A screen rate is offered as a part of a free quote.
Usually these details come when you enter your details in a brokers
computer; however, in some cases these prices may be negotiated with
the insurer. The negotiated price would be known as the off screen
rate.
Short Period Rates If your policy is cancelled, you may get charged
a short period rate. This includes the amount for the period of
cover as well as an additional charge, which is usually based on a
percentage.
Tracker This is an electronic device which allows law enforcement
to locate a car anywhere in the UK. This is a great way to protect
your car against thieves and you can have one installed on your car
after purchase.
Uninsured Loss Recovery - Uninsured Loss Recovery or ULR is how
drivers can protect themselves against hit and run accidents and
drivers that are uninsured. Some companies offer this coverage as
standard cover; however, if it is not offered standard, for a small
additional price you can usually add it. Before you purchase car
insurance, be sure to check the small print to see if ULR is
included with your car insurance cover.
Use Types When you are trying to get car insurance, you must give
them the proper use type for your vehicle. If you give them the
wrong one, the company may not pay out later if you have a claim.
The following are the different types of uses that are recognized in
the UK:
Commercial Travelling This covers cars that
are used for selling from door to door
Commuting If you drive back and forth to work
or even to a railway station to park and go to work, then this
is classified as commuting.
Business Use If you use your car for your job,
to drive to other places other than where you work, this is
called business use.
Social, Domestic, Pleasure This use covers
normal driving for pleasure, such as going shopping, going to
visit your family, or driving to the park.
Voluntary Excess Voluntary excess is the amount of money that you
choose to pay over top of the compulsory excess that is required if
you ever make a claim. Deciding on an additional voluntary excess
can reduce the amount of your premium.
The insurers, editorials and
evaluations on this site are offered purely for information
purposes and do not in any way amount to advice about, or a
recommendation of, any product or provider. If you choose to
make use of the aforementioned insurers, we do not accept any
liability and we provide no assurances, guarantees or
representations, inferred or otherwise, for the substance or
precision of these intermediary sites or businesses. If you have
any uncertainties you should check with an authorised
independent financial expert for guidance in association with
your individual situation and particular requirements. A list of
advisers in your local area can be found at www.unbiased.co.uk.
