Car Insurance Glossary

It can be somewhat confusing to choose the right kind of car insurance based on your needs, so, listed below are some of the auto insurance terms that can help you understand it in a better manner:

Accessory

Accessory is any extra item that you add in your vehicle like a music player, air conditioner or portable television.

Accident

Accident is any fortuitous occurrence that neither planner now expected by the vehicle owner. It can even consist of a series of occurrences that can arise from one single event.

Choice of repairer

Usually when a car needs repair after an accident or any kind of damage, the insurer suggests one of their nominated repairer for this work but in many cases few quotes are requested by them of which, one can be a repairer of your choice.

Agreed value

This is the amount agreed by the insurer for insuring your car or any other vehicle. Your current insurance certificate will have this amount and in case you include any accessory to your vehicle, which is not standard supplied equipment, you are requested to inform the insurer about it.

Driver restriction

There are many insurance companies that place restrictions on the drivers or kind of vehicle they will or will not cover. For instance, some insurers don’t cover specific high performance vehicles, especially when the driver is under a certain age group.

Comprehensive insurance

This type of car insurance policy covers the damage of a vehicle in an accident. The liability section of comprehensive insurance covers damage that is caused by your vehicle to the property or vehicle of a third party.

Emergency transport

If you have met with an accident while you were away from home and not able to drive your vehicle then emergency transport will be provided to you. But in order to qualify for this service you need to be within a specified distance away from home.

Emergency repairs

This includes any minor but essential repair that needs to be made before you drive your car safely from the event or spot of accident.

Financier

A financier is a licensed provider of credit, building society, credit union or bank.

Faultless no-claim bonus

In most of the cases, you can be allowed by the insurer, to maintain your no-claim bonus, if you have met with an accident which was not your fault and you can identify the driver ‘at fault’ by providing the address, registration details and name.

Legal liability-car insurance

Legal liability for car insurance is for any damage that is caused by your vehicle to someone else’s property when you are found to be guilty. This liability will also cover you for any legal cost that you will have to pay for the accident.

Free car hire after loss

There are many comprehensive insurance policies that cover the cost of a hired car for approximately 14 days in case your vehicle got stolen.

Limit of cover

This is the amount of insurance cover that you will be buying for your car.

Lifetime no-claim bonus

No-claim bonus schemes are offered by almost every insurance company but very few allow this scheme to be retained for life. The criteria regarding the duration you need to have held a maximum no-claim bonus for will be established by the insurer before you are entitled to it for lifetime. There will be no effects on your premium if you manage to get this lifetime no-claim bonus.

Market value

Market value is the value of your vehicle that is assessed by the insurer at the time of an incident you have claimed for. In this assessment, market rates in accordance with your vehicle’s condition and your age is used. Normally, accessories are excluded in this assessment unless they are noted on your insurance policy.

Malicious damage

This is the damage caused to your property by some other person without your consent and with intent.

Monthly installment

This is the amount you need to pay on a monthly basis when you have chosen installments for paying your premium.

Modification

Modification is any sort of alteration made to the engine, standard body, wheel, paintwork or suspension of the vehicle. This alteration will not only affect the safety and value but the performance of the vehicle as well.

No claim bonus

It is a discount that customers are granted as a reward for not making any claims. This bonus increases every year till it reaches the maximum discount allowed in a no-claim bonus.

New vehicle after total loss

If you purchase a new vehicle and it is in its first year of registration, many insurance companies will provide you a vehicle of the same model as a replacement in case you suffer total loss. There are few insurers who will replace your vehicle in case of total loss with the same model even if it is up to two years old. In case you have suffered total loss on an old car you will be paid just the agreed amount/market value.

Period of insurance

This is the period you are covered for under the insurance policy. Your policy schedule will show the starting and end date of this period.

Occurrence

An event whether it is a repeated or continuous exposure in similar general conditions, resulting in damage of property or any type of personal injury that was neither expected nor intended by the vehicle owner or any third party.

Certificate of insurance/policy schedule

This is the document that sets out your insurance cover details. It includes the covered amount, premium, endorsements or any excesses applicable to the policy.

Personal items cover

There are few comprehensive policies that offer coverage for any personal item that was held in your car when it suffered damage due to fire, accident, bad weather conditions of any other event. The coverage for these reasons is limited and restricted to any accident caused damages.

Private use

This means that your car can be used for leisure, domestic or social purposes.

Premium

This is the amount that is paid from your side for your insurance. Premium is shown on your current insurance certificate.

Standard equipment

These are equipment fitted originally to your vehicle when it was manufactured. No modifications, accessories and options are included in this.

Third party fire and theft insuranceh4

This type of insurance covers damage caused by your insured vehicle to the property or vehicle of a third party. It also covers the damage or loss to the insured vehicle due to theft or fire.

Substitute vehicle

This is the vehicle you will be driving if your own vehicle is not in a condition to be driven because of damage.

Total loss

This relates to any uneconomical reasons for not getting your car repaired.

Third party property damage insurance

This insurance covers the damage caused by an insured vehicle to the vehicle or property of a third party.

Uninsured motorist cover

This is a limited coverage that is usually provided under a third part property damage policy or third party theft and fire policy. If the accident is found to be the responsibility of the other driver, the other drive is not insured and you can provide the identification details of the driver, this policy will provide coverage to you.

Towing cost

This is the cost of having your car or any other vehicle towed to a repairer in case it is not possible to drive it safely away from the scene of accident.

Vehicle

A motor vehicle registered for use on the public street or is presently in a condition complying with requirements of registration.