The world of insurance doesn’t have to be confusing. Take a look at our A to Z of car insurance terms that you’ll want to get familiar with.
The total number of miles you expect to drive in your car during the year you’re insured. You may be asked for your annual business mileage separately if you use your car for business purposes.
Black box insurance
Black box insurance, also known as telematics car insurance, is a car insurance policy where the future premium is determined by the way you drive during a given period. A black box (the size of a smart phone) is installed in your car and feeds information about your driving habits back to your insurer.
Breakdown cover is often offered as an additional cover alongside car insurance. A variety of levels of cover are available, usually for an additional charge. The most common types of cover offered are roadside assistance, vehicle recovery, breakdown at home, onward travel and European breakdown cover. It can also be purchased as standalone cover direct from breakdown companies.
Certificate of insurance
This document shows the vehicle insured, the drivers who are insured to drive the vehicle, the class of use and the period of insurance.
Comprehensive car insurance
This type of policy provides the third party cover for damage and injury that you are required to have by law, as well as cover for damage to or theft of your own vehicle. It covers you for damage to third party property, injury to others (including passengers), liability whilst towing, theft, fire damage, loss, or another form of damage to your vehicle.
Some insurers include a courtesy car in their policies so that, if you’re involved in an accident, you will be given a car to drive until yours is fixed. Other insurance companies will give you the option to add courtesy car cover to your policy for an extra cost.
When you’re learning to drive, you need a provisional driving licence. This allows you to drive with a qualified driving instructor in their car, or with an experienced driver. To drive your own car, you will need car insurance. While some insurance companies offer specific learner driver insurance policies, others will accommodate learner drivers on a standard policy, so it’s worth doing some research before getting your insurance. As a learner driver, you must always be accompanied by a driver over 21 who has held a full licence to drive that type of vehicle for at least 3 years.
Once you have passed your theory and practical driving tests, you will have to apply to the DVLA for a Full licence. You will need to advise your insurer so that they can provide cover for you as an unaccompanied driver. You will be able to drive on your own once you have received your pass certificate, have informed your insurer and have a valid insurance policy (comprehensive, third party, or third party fire and theft).
Driving other cars (DOC)
Your car insurance policy may provide you with cover to drive other vehicles with the permission of the owner. If this cover is provided, it will only be Third Party cover and only if the other vehicle is already insured - you will need to check your certificate of insurance to make sure this is included. Not all insurers allow this and there may be restrictions in place.
When you make a claim on your car insurance, there will normally be a compulsory excess that is the amount you will have to pay towards the cost of the claim. You may have also chosen a higher (voluntary) excess in order to reduce your premium. Before agreeing to a voluntary excess, you must be confident that you’d be able to pay it in addition to the compulsory excess, if you needed to make a claim in the future.
A fault claim is a claim where the insurer is unable to recover all their costs from the other party/insurer. Usually this is where you have caused the accident or damage, but it may also be where the other driver is uninsured or a person who has caused damage to the vehicle is untraceable. This would be considered a fault claim, even if the accident wasn’t your fault.
If your car is fitted with an immobiliser, it can’t be started until you deactivate it with your car key or fob. This reduces the chances of it being stolen.
A car that was manufactured abroad and brought into the UK. Imports can be parallel imports or grey imports. If it is a parallel import, it will be EU-approved and will match the UK specifications. Grey imports are likely to require a specialist insurer, as they are not built to UK specifications.
This is the driver who does the majority of the driving in a car.
Anything that changes the way your car looks, its performance or the way it behaves. It can cost you more to insure a car that has been modified, depending on the type of modification, but, if you don’t disclose modifications, this could invalidate your policy.
No claims discount
For every year you have a car insurance policy and don’t make a claim, you build up a no claims discount. Insurers look favourably on drivers who have built up a no claims discount, as this indicates that they’re a safer driver and are less likely to make a claim. If you change insurers, you will often be asked to provide evidence of the no claims discount you have built up.
The person who owns the car and is usually its registered keeper. Registered keeper is the person who is responsible for the vehicle in terms of official communications from the police and the DVLA, while the owner is the person who has paid for the car or was given it as a present.
If you get a motoring conviction, you will get points on your licence. How many and how long they will stay on your licence will depend on the offence. You must disclose any such convictions to your insurer which may result in the risk being unacceptable to some insurers or you being charged a higher premium. If you do not disclose convictions it could invalidate your policy. Take a look at our guide to learn everything you need to know about driving penalty points.
This is how long your insurance policy will last. Most car insurance policies are valid for 12 months.
Protected no claims discount
This can prevent you from losing your no claims discount if you make a claim. There will be a limit to how many claims you can make within a set number of years, so you should always check your policy.
3 – 4 weeks before your policy is due to expire, you’ll get a renewal notice from your insurer advising the premium and terms for the coming year. Most policies will auto-renew on these terms, unless you advise your insurer that you do not want this to happen. Shopping around and finding a cheaper quote for the same level of cover could save you money.
Insurers consider a number of factors when deciding how much to charge you for your car insurance policy. The higher risk you are, the higher your premium is likely to be. For example, young and inexperienced drivers will usually be deemed a higher risk than older, experienced drivers.
Third party insurance is the minimum required by UK law and covers damage to other people's vehicles or property, and any injuries to your passengers or other people.
Third party fire and theft
This type of insurance includes fire or theft damage to or theft of your own vehicle in addition to the minimum Third Party insurance. If you want to cover accidental damage to your own car, you may choose to opt for Comprehensive insurance instead, which may not be any more expensive.
Some cars come with trackers as standard, but you can choose to add one to improve security, if your vehicle doesn't have one. Some insurers will insist vehicles over certain values have a tracker fitted. A tracker will help to locate your vehicle if it is stolen. Some are monitored 24/7 and others require a theft to be reported in order to be activated.
Uninsured loss recovery (ULR)
This covers any expenses that you incur as a result of an accident that wasn't your fault. Usually these will be settled by the insurer of the at-fault driver as part of the claim, but, if there is an uninsured or untraceable driver, then you may need to claim this yourself. Some policies include this as standard and some require you to purchase Legal Expenses insurance as an add-on.