Insurance terminology can be very, very confusing, so we have devised a list of the A-Z of insurance jargon; in a simple manner so everybody can understand it.
Accessories: The parts of your car which are not directly related to how it works as a vehicle – these include in-car entertainment, such as radios. Modifying your vehicle could increase the cost of your insurance, or even make it invalid – namely because it appeals to thieves more, or changes your car’s performance – so make sure to check with your insurer before making any changes.
Black box insurance: Otherwise coined telematics insurance, is a method of monitoring driving behaviour – used particularly by younger drivers, or new drivers, as a potential way to decrease their insurance premium. insurethebox is one of the first telematics insurance providers in the UK and rewards customers who drive safely.
Claims: Insurance is essential, and a legal requirement, to protect yourself and others in the case of an accident – it can help cover expenses incurred and provide financial support for victims of accidents. A claim is a formal request to an insurer, to be compensated for any losses covered by the policy. Simply put, if you have an incident (even a small one), you need to inform your insurer as a claim may be made against your policy. For more information about how you should make a claim, click here.
DVLA: This refers to the government body responsible for maintaining the database for drivers and their vehicles in the UK (Driver & Vehicle Licensing Agency); they are also responsible for issuing your driver’s licence and road tax alike.
Excess: This is a monetary amount specified when you take out your policy – essentially, this is the amount you will have to pay if you make a claim, before you are able to receive compensation or a payout from your insurer. The excess is usually a combination of a compulsory amount that is set, and a voluntary amount you have chosen.
Fault: When accidents occur, there is a clear need to determine who was at fault for the incident. You do not have to stand at the roadside shouting and taunting the other driver; your insurance provider will determine who is to blame. According to AA: ‘[A fault is an] accident or loss where you are considered to be to blame or where you or your insurance company cannot recover costs from somebody else’. Having a black box in your car can help determine who is at fault based on the data received.
Green Cards: There is much confusion surrounding Brexit, which has asked the question around whether you will be able to drive around the European Union. For now, nothing has changed but after the transition period from 1st January 2021, you might require a Green Card from your insurer to drive to EU countries. Drivers will also have to purchase an international driving permit. Each country has its own required documentation, so check out what you will need to purchase for each country here.
Handbag cover: There are insurers in the marketplace who offer a unique service, which protects their ‘handbag’ in the result of an accident. This will allow the policyholder to claim against the expense of the handbag, if damaged or stolen, to purchase another one. Insurers like ‘Drive Like A Girl’ are just one of the companies’ who offered this tailored service.
Insurance: Hopefully this should be an obvious term to explain – insurance is a form of risk management, whereby you are financially protected from experiencing loss in the majority of cases. This is usually an optional add-on in the vast majority of products (i.e. insuring your mobile phone) but is legally required to drive a car on any UK road.
Journeys: Taking a long journey can dramatically increase your chances of being in an accident due to driver fatigue, with research indicating that it is a contributing factor for around 20% of road accidents, according to ROSPA – therefore frequent breaks are advised.
Knocks: Every knock you experience in your vehicle should be reported to your insurance company, whether you were to blame or not. Claiming on your insurance is the only method you should use if you experience an accident with another vehicle/ person – do not try to settle using other methods (i.e. exchanging money). For more information about how you should make a claim, click here.
Loss: This is a generic term for insurers, and can be the basis of a claim. If you have experienced loss, damage or theft of your vehicle, your insurer will make the choice regarding what remuneration you will receive. There are specific grounds you need to fulfil to be eligible to claim back on your insurance, so check your policy carefully and see whether you are eligible to recover a loss.
Mileage: At insurethebox we offer the ability to purchase mileage packages with your policy; designed for customers who do not need unlimited mileage, and potentially want to save money by specifying their maximum mileage each year. There are three-tiers to our policies; 6,000, 8,000, or 10,000 miles, with opportunities to top up miles throughout your policy.
No Claim Discount: Also called No Claim Bonus, this scheme is created to reward drivers for making no-claims for the duration of their policy. This can be accumulated over a number of years and can help decrease insurance premiums upon renewals.
Optional add-ons: These are discretionary additional options an insurer might offer to policyholders or prospective customers (i.e. breakdown cover, overseas travel) which usually come with a supplementary cost, and function as a policy in their own rights.
Penalty Points: Issued by the DVLA, drivers will gain points and possibly a fine for breaking the Highway Code – whether that be excessive speed or driving without care or attention or other motoring offences. Each driving offence carries its own unique points, conviction code, fine system and potentially a driving ban to deal with convicted drivers effectively.
Quote: Every single person who purchases car insurance will receive a quote, based on a number of factors: location, age, gender, etc. These quotes will differ for every driver, and are likely to be proportionally much more expensive for younger drivers. Taking a black box insurance policy can help safe drivers bring down their premium at renewal.
Renewal: Once your current period of insurance ends, you are highly likely to be offered to renew your policy with the insurer, if they choose to do so. You can choose to renew with your current provider, or shop around for the best deals – but there are benefits of staying with the same insurer, especially if you have a black box and you’re a safe driver. Most of our customers renewing after their first year receive an average discount of 37%.1
Speeding: This is fairly obvious – speeding is essentially travelling in excess of the legal speed limit assigned to a certain road. This can come with some major repercussions, and has the ability to affect your work – with some jobs requiring a full ‘clean’ driving licence to simply apply.
Third-party: This refers to anybody outside of the policyholder or insurer who makes a claim. For instance, if you crashed into another car, then the owner of that car would be referred to as the ‘third party’.
Underwriting: According to the Economic Times: ‘In the insurance world, underwriters determine whether an insurance agency should undertake the risk of insuring a client’. Basically, they are the team in the insurance company who decide if you’re going to get insurance or not. Many insurers have underwriting systems that automatically evaluate risks but the job can also be carried out by underwriting individuals.
Vehicle tax: This is a legal requirement for all drivers to tax their vehicle prior to driving to avoid fines up to £1000. Each and every vehicle on the road needs to be taxed, even if you are not currently using it. There are certain requirements needed before a vehicle can receive its certification of being taxed – check out what you need here.
Write-off: If you are unfortunate enough to experience an accident which damages your vehicle, and your vehicle is deemed to be unfit to drive, it will be awarded a ‘write-off’ status. Not an award you want to win! From this point onwards, your vehicle is either ready to leave you for the scrap yard or kept by your insurer because the repair of it is seen as uneconomical. You can take the payout of the ‘market value’, or you might be able to buy the car back from your insurer if there’s still a chance to repair it.
Xpiry date: Okay so we cheated slightly! Your driving licence is valid for a certain period of time, and will, therefore, have to be renewed at some point in your driving life. This is readily available on the front of your pink or green licence, and will need to be renewed prior to this shown date.
Without a valid driver’s licence, you are legally unable to drive your car and will invalidate your insurance policy – meaning additional charges are placed on top of the initial offence.
Your policy: Okay, so we cheated again.
Each policy an insurance provider creates is unique to your own scenario, and as such, you can tailor your insurance to meet your needs; if you feel that telematics is the way forward then choose that option, but you are by no means limited to which option you choose. The decision will obviously be based on a number of factors (price, excess, type of cover, reputation). Your policy will then be paid annually or in monthly instalments with the ability to renew or cancel based on the terms and conditions of your provider.
Zero tolerance: There is a zero-tolerance policy by authorities to tackle drink-driving related offences. These types of incidents are often met with severe punishments for the drivers charged for these offences, and can even lead to a criminal charge.
1 Customers with a policy start date between 1st Jan 2017 – 31st Dec 2018. 55% of these customers earned 60+ monthly Bonus Miles. Discounts on invited renewals.