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Car Insurance Jargon Explained

• ABI - Association of British Insurers, a trade body for the insurance industry.
• Breakdown cover - this type of cover will protect you from any trouble you might have if your vehicle breaks down on the road. It is available for driving both at home and abroad and offers help such as roadside assistance.
• Certificate of insurance - this is evidence of your motor insurance as required by law.
• Comprehensive - this type of car insurance is the fullest level of cover available.
• Cover note - a cover note acts as temporary evidence of car insurance whilst the official documents are being prepared.
• Excess - this is the term used to refer to the amount of a claim you must pay before your insurance company will pay the remainder. Policies usually come with a minimum level of excess.
• Exclusions - exclusions are instances for which you will not be covered by your insurance policy. An exclusion might be other people's medical bills, but it depends on your policy and the level of cover that you have chosen. Refer to your policy to see what exclusions you might have.
• First party, second party, third party - these are legal terms often used in matters of claims. The phrase 'first party' refers to you, 'second party' to your insurer and 'third party' to the person or object with which you have had an incident.
• Fleet insurance - when more than one car is insured by the same company it is called 'fleet insurance'. This type of insurance often comes with discounts.
• Fully comprehensive - see comprehensive.
• Insurance premium tax - a government tax levied on almost all insurance products sold in the UK.
• Named drivers - people named on your policy who are permitted to drive under your insurance cover.
• No claims bonus - a no claims bonus is earned, year-by-year, by insured drivers with a claim-free record. The no claims bonus is a valuable way of obtaining discounts on your car insurance premiums.
• Policy document - the policy document describes, in full, the terms and conditions of your insurance contract.
• Premium - your premium is the money you pay in order to obtain insurance.
• Road Traffic Act - law stipulating that all motorists on UK roads must be insured against their liability for injuries to people and damage to property.
• Third party - the minimum level of car insurance required in the UK.
• Third party, fire and theft - this policy offers a slightly more extended level of cover than basic third party insurance.
• Tracker - a security device which can be fitted to a car so that it can be traced in case of theft.
• Uninsured loss recovery - also referred to as ULR, this is a type of insurance available in order to protect drivers from the potential expenses that could arrive from an accident with an uninsured party.