Car Insurance Glossary
Betterment
A charge that may be made by your insurer if repairs covered by your policy result in your vehicle ending up in a considerably better state than it was before.
Certificate of Insurance
Evidence of the existence of insurance as required by law e.g. Motor.
Claim
Formal request for payment, usually requiring completion of a claim form.
Comprehensive Insurance
Comprehensive insurance usually relates to Motor insurance and provides cover for accidental loss or damage to the vehicle.
Compulsory Insurance
The law requires certain risks to be insured. These include Private Motor, Third Party and Employers' Liability.
Conditions
The precise description of an insured risk in the insurance contract that determines those losses or occurrences in the event of which insurance benefits are due.
Cover
The precise description of an insured risk in the insurance contract that determines those losses or occurrences in the event of which insurance benefits are due.
Current Market Value
The amount required for re-purchase of an item or rebuilding of a building, minus depreciation due to wear and tear or other causes (material value). As a rule, however, the replacement value is used as the sum insured for Property insurance.
Due Diligence
You are obliged to exercise due diligence. The infringement of self-evident loss prevention measures may result in a reduction in insurance benefits.
Duty to Minimise Loss
In the event of a claim you must do everything possible to restrict the damage as far as possible, and in particular to avoid any consequential damage.
Endorsement
A written alteration or addition to the standard printed policy wording.
Excess
An amount paid by you towards a claim.
Exclusion
Any event or circumstance or item not insured.
Expiry Date
The time and date on which cover ceases.
General Conditions
The general conditions (GC) set out the rights and obligations of both you and the insurer with regard to all contracts for a specific type of insurance.
Green Card
A document confirming you have at least the minimum compulsory Motor Insurance necessary to drive in the countries named on the Green Card. This document is not availabe from insuredaily.co.uk
Gross Negligence
A serious violation of the obligation to exercise due care. This can result in the payment for a liability claim being substantially reduced.
Inception Date
The time and date on which cover starts.
Indemnity
Putting you in the same financial position after the loss as you were in before the loss.
Insurance Agreement
An insurance agreement is an agreement between the policyholder and the insurer to pay regular or single premiums and provide insurance benefits in the event of a loss respectively.
Insurance Certificate
In several lines, the insurer issues a confirmation of the insurance contract to the policyholder as proof that insurance cover exists e.g. Employers' Liability, Motor.
Insurance Premium Tax (IPT)
A Government tax on your insurance premium.
Insurer
The insurance company
Keyfacts
An easy-to-read summary of insurance covers.
Legal Expenses Insurance
Legal Expenses insurance protects your interests in the event of legal disputes and provides cover for the costs of attorneys, experts and court proceedings as well as any amount paid to the claimant.
Loss Adjuster
Independent professional appointed by the insurer to negotiate claims payment.
Loss Assessor
Independent professional appointed by the Policyholder to negotiate claims payment with the Insurer.
Motor Insurance
The law requires the liability of the owner of a motor vehicle to be insured. This liability arises when a person is killed or injured or damage to property is caused by the use of the motor vehicle.
Motor Insurance Groups
Cars and Vans carry a group rating that is used by insurers on a scale of 1 to 50; 50 being the highest. The allocated group relates to the engine size, it's age and the car's desirability to thieves and the dafety factor.
No Claims Bonus
A premium discount where no claims have been made in previous years.
Obligation to Notify
You must provide all information necessary for the insurer to analyse the risk and issue an insurance contract.
Peril
A term describing an event for which insurance cover is provided e.g. fire and theft.
Policy
The document describing the cover provided by the insurer.
Policyholder
The customer. A person or company who has bought an insurance policy. Also known as the Insured.
Premium
The amount paid by the policyholder to the insurer as a consideration for covering the risk.
Proposal Form
A form used to gather information. This can also include electronic submission via the Internet
Prospectus
An easy-to-read summary of insurance covers.
Public Liability Insurance
Liability insurance protects you from loss or damage resulting from a claim for damages by a third party arising from negligence on your part.
Reinsurance
As the primary or direct insurer the insurance company is often unable to carry the entire risk assumed under an insurance contract itself. It must pass on part of the risk to a reinsurance company (or another direct insurer); this does not affect its relationship with the policyholder. The reinsurer can also pass on risks to other insurers.
Riot Insurance
Riot will usually be covered in conjunction with civil commotion and malicious damage subject to the policy's general and special conditions.
Risk
The likelihood of incurring misfortune or loss.
Schedule
A document describing who is insured, what is insured, and the cover provided.
Social Domestic & Pleasure
Motor insurance cover that is restricted to non-business use. If you use the car in connection with your work you may invalidate your policy.
Special Conditions
In addition to the general conditions (GC), any individual conditions applying to the sections of a policy are set out in the special conditions (SC).
Subrogation
The insurance company that makes the initial payments (e.g. in the case of Motor Liability insurance) has recourse to the person responsible for the loss, or to the policyholder if the loss was due to a tortuous act (such as gross negligence) or if the insurance cover does not suffice.
Third Party Fire & Theft
Covers you to the level of Third Party Only. It will pay if your vehicle is stolen and/or set on fire.
Third Party Only
This is the basic requirement by law. It covers your responsibility to any other person or property involved in an accident with your vehicle.
