When you first get involved in a new persuit, be it fishing, dancing or car insurance, you get many new terms flung at you as though they are the norm.
To help clear the confusion a bit we have compiled some common terms used in the field below.
Association of British Insurers (ABI) - This is the industry association for British insurance companies. Most insurance companies are members of this association, but membership is not compulsory.
The ABI database is useful to find a recommended insurance group for the car you are interested in.
Financial Services Authority (FSA) - This company surveys the UK’s finance, regulating financial services companies, including insurance companies. Contact the FSA if you need to make a complaint against an insurance company.
Thatcham - This is The Motor Insurance Repair Research Centre. They research the motor insurance industry, keeping track of the cost of car repairs and vehicle security.
Approved repairer - This describes the garage recommended by your insurance company for car repairs, specifically the one that is covered by your policy.
Comprehensive cover - Car insurance cover of the highest protection, covering things like injuries or damage to other people or their property, accidents resulting from passengers or a driver named on your policy, trailer usage, fire damage/theft, medical expenses and the loss of or damage to personal effects in the car.
Driving other cars (DOC) - A policy feature covering your usage of other people’s vehicles, though many insurers will not offer this.
Insurance Premium Tax (IPT) - A tax on general insurance premiums, including premiums for car insurance. The tax is included in the price of your car insurance premium.
Fault claim - This describes a cases whereby either you are thought to be to blame for the accident or loss, or where you cannot recover cost from another party.
Non-fault claim - On the other hand, a non-fault claim is where your insurer is able to recover the cost of the claim from another party.
Indemnity - When you end up put back in the same financial position as you were before the car was damaged, e.g. the insurance company pays to repair your vehicle.
Material fact - Describes any information influencing the insurer's decision to offer you cover or the premium they charge for it. Your policy may be invalidated if you leave out important material fact.
No-claims bonus (NCB)/no-claims discount (NCD) - Every year you drive without making a claim on your insurance results in a years ‘no-claims bonus’ although there is a maximum to which this can occur. This bonus reduces the cost of your insurance premium for the following year.
For each year you drive without making a claim on your insurance you get a year's no-claims bonus, subject to a maximum. This bonus reduces the cost of your car insurance premium for the following year.
Settlement - The amount paid out by your insurer for your claim.
Third party only (TPO) - This is the minimum level of car insurance required by law, containing no cover for damages to your vehicle, instead covering injuries to other people and their property, or by your own passengers as named on you policy.
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