Car Insurance Jargon Buster (Part 1)Comments Off on Car Insurance Jargon Buster (Part 1)
To the non-initiated, understanding all the ins and outs of car insurance can seem like learning a whole other language. As well as the array of specific terminology there are a lot of important acronyms that it really pays to understand.
To help you make sense of this confusing array of terminology we’ve put together this insurance jargon buster. This is part 1, with part 2 to follow in January.
ABI: The Association of British Insurers is a trade body comprised of 250 leading insurance companies and accounts for over 90% of the UK insurance market.
Act of God: An event which is not the fault of any individual and is unpredictable such as a lightning or meteor strike. Acts of God may not be covered in your policy and are often separate from extreme weather events like flooding or falling trees.
Betterment: A payment made by an insured party that recognises the fact that their vehicle will be worth more as the result of repairs relating to an insurance claim.
Certificate of insurance: This is a document that is required by law and shows the car being insured, who is allowed to use the car and the classes of use (see below).
Class of Use: A term used by insurance companies to determine what you use your car for and how often. There are three classes of use: Social, domestic and pleasure; Commuting; Business use The class of use you select will often have a big bearing on your insurance premium. It’s very important you are certain what class you fall into as supplying inaccurate information could invalidate your policy.
Comprehensive cover (or fully comprehensive): This will cover you and your vehicle as well as the vehicles of third parties if you are at fault.
Compulsory excess: This is a set amount you need to pay to your insurer when making a claim. The level of your compulsory excess will depend on how much of a risk you are judged by the insurer.
Conviction Code: If you commit a motoring offence the DVLA (see below) will add a four digit conviction code to your licence.
Cover note: A document that shows you have temporary car insurance while your insurer is preparing your policy documents and certificate of insurance. Some insurance companies don’t issue cover notes and will instead issue you with a certificate on the day you accept the insurance.
Duty of disclosure: When you take out a car insurance policy you have a duty to inform your insurer of any changes in your circumstances, such as change of address or a modification to your car.
DOC: Drive Other Cars (DOC) is a type of cover that some insurance policies will include and means you are insured to drive another person’s car, with their permission. This will usually only be third party cover and cannot be for day to day use.
DVLA: The Driving and Vehicle Licensing Agency is the body responsible for issuing licences and collecting car tax for all drivers in Great Britain.
by David Hambridge