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8 minute read Guides

Car Insurance Jargon Buster!

Don’t know your telematics from your TPO? Check out our guide to car insurance terms and wrap your head around your policy.

by Louise Thomas

The car insurance industry seems to use a language of its own, filled with more acronyms than your group chat (IDK OK?!). It’s difficult to understand even for experienced drivers. We’re here to help you wrap your head around the terms you’ll come across in your search for insurance.

A | B | C | D | E | F | G| H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y  | Z

 


Annual Mileage

This is the number of miles you expect you will drive over the course of the year. For new drivers with no history to base it on, this can be hard to calculate. Remember to include your daily commute, trips to the shops or friends houses and a little extra for those spontaneous, miscellaneous trips!


Black Box


This is a device that monitors your driving to let you know how well you drive, helping you to become safer on the roads. It usually measures how you accelerate, brake and take corners. Your insurer will normally send an engineer to install the device for you, but some policies have special devices you can plug in yourself.

Black box or telematics policies aim to reward safe drivers. You can usually get a discount for driving well, making them a good choice for young drivers who often face high premiums!

Breakdown Cover

Many people purchase breakdown cover separately to their car insurance, however most insurers offer it as an optional extra for an additional fee.

With this cover, if your car breaks down you will receive roadside assistance. A mechanic will either try and repair your vehicle at the roadside or tow you home or to a nearby garage. There are usually several levels of breakdown cover available so be sure to ask your insurer for details.


Comprehensive cover

Fully Comprehensive is the highest level of cover offered by most insurers and covers your vehicle in addition to third parties.

Common features exclusive to comprehensive cover include:

  • Accidental damage to your own car
  • Windscreen cover
  • Courtesy car while your car is repaired
  • Fire damage and theft
  • Personal injury cover (limited)

The exact policy features will always vary between insurance companies so always check the details before buying!


Driving other cars (DOC)

DOC allows the policyholder to drive with the consent of the owner a private motor car not belonging to him/her or their spouse/partner.  Contrary to popular belief, this cover is not automatically included on all fully comprehensive policies. You usually need to be at least 25 and meet other criteria which will depend on your insurance provider.


Excess

The excess is the amount of money that you pay in the event of a claim. This is usually made up of two parts, the compulsory excess and the voluntary excess.

Compulsory excess

The compulsory excess is set by your insurer. It can vary depending on your age, the car, and how long you have been driving. Some policies will not have a compulsory excess.

Voluntary excess

This is the amount that you tell your insurer you are willing to pay towards a claim and is added to the compulsory excess to give you your total. Setting a higher voluntary excess will often result in a lower premium, however you have to pay more if you are involved in a claim so bear that in mind before you set your voluntary excess at £1000.


Fault or non-fault claim

Fault or non fault claims do not necessarily depend on who is actually to blame for the incident.

A non-fault claim is a claim where your insurer is not able to recover all the costs from the third party.  This means that even if you did not cause the accident, if your insurer can’t recover the costs it will count as a fault claim. This can also happen when fault can’t be determined.

If an accident is not your fault and your insurer is able to recover all costs, the claim will be determined as non fault.

Fronting

This is where an older driver, usually a parent or guardian, is named as the main user of a car which is actually mostly driven by a younger driver. This is usually done as a way of cutting costs, it is often considerable more expensive to insure a new, young driver than than a parent who has decades of driving experience.

However, fronting is actually illegal and could invalidate your insurance if you need to make a claim. Additionally, you could face prosecution for fraud and end up with a criminal conviction.

Check out our tips on cutting costs as a new driver here instead!


Insurance Premium Tax (IPT)

IPT is a compulsory tax on insurance premiums levied by the government. It works similar to VAT and is included in the price you are quoted.

As of 1st June 2017 IPT is set at 12% for most car insurance.


Modifications

Modifications are anything that changes the way your car looks, performs or behaves e.g. tinted windows or lowered suspension. You need to tell your insurer about any modifications that have been made to your car. Most insurers will ask you to notify them before any changes are made, if you wish to modify your car during your policy term.


No Claims Bonus (NCB)

No Claims Bonus, sometimes called No Claims Discount, is a discount given by your insurance company as a thank you to the policyholder for completing a full policy term without making a claim.

You can build up your NCB with each successive year of claim free driving, with most insurers giving you a greater discount for up to 5-12 years’ worth of NCB.

When you make a claim it is common for you to lose some NCB as a result.


Pass Plus

Pass Plus is a course you can take to help you improve your skills and drive more safely. It is most commonly taken by new drivers as it can help build confidence on the road; however, it can be taken at any time as a “top-up” course.  Pass Plus covers driving:

  • In town
  • In all weathers
  • On rural roads
  • At night
  • On dual carriageways
  • On motorways

Premium

The insurance premium is the total amount of money you must pay for your insurance policy, or simply the price of your insurance. This can usually be paid in one lump sum or by direct debit over the course of the policy term.


Registered Keeper

The registered keeper is the person who uses the car day to day and drives it most often. The registered keeper is different to the legal owner who is simply the person who paid for the car.

For example, if your dad buys you a car to use every day, you are the registered keeper, but he is the legal owner.


Social, Domestic and Pleasure

See use types


Telematics

See Black Box

Third part, fire and theft (TPFT)

This type of policy covers any third party and their property in the event of an accident for which you are liable; however accidental damage to your own car is not covered, and neither are any injuries you suffer. Your vehicle is only covered in the case of fire damage, theft or attempted theft.

Third party only (TPO)

This is the most basic level of cover offered by most insurers. This type of cover only provides protection for third parties involved in an incident for which you are deemed liable. Any damage to your property or injuries you suffer is not covered.


Use Types


When you purchase car insurance, the insurer will ask you what the car will be used for. These are the most common class of use definitions you will come across:

Social, Domestic and Pleasure

This covers you for day to day social driving, such as visiting friends or family or heading to the shops.

Social and Commuting

This class of use covers everything included in social, domestic and pleasure, with the addition of commuting. In this case, commuting means driving to and from a permanent place of work, this includes driving to a train or bus station where the car is parked, and driving to school, college or uni.

Business Use

This covers social, domestic, pleasure and commuting, with the addition of using your car in connection with this job. This includes anything that involves driving to different sites away from your main place of work e.g. an area manager who drives to different stores or somebody who regularly drives to meetings in different offices.

Commercial

This covers the above but is more suited for those for whom driving is a permanent part of their job e.g. door-to-door sales people, taxi drivers or driving instructors. You may need to seek specialist insurance providers for this level of cover.

Louise Thomas

Hi I'm Louise and I'm a Marketing Executive at Veygo. I've been driving for nearly two years after several "practice" tests! I love the freedom that comes with finally having a driving licence. Road trips with my friends are the best - especially when we've got an awesome playlist going! (check out our Spotify for road trip playlists!)

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