It’s important to understand the terms that are used within a car insurance policy so that you know exactly what to expect if you need to place a claim. Many of the most commonly used terms are explained here.

The following list of terms explains many of the facets that relate to car insurance. Understanding each of these terms is important to understanding your car insurance policy.

Accessories - Accessories are the parts of a car that have nothing to do with its functioning. Normally, these accessories are added onto the car after it has been manufactured including supplementary parts that are fitted onto your car such as luggage carriers, top boxes, and tank bags. Radios that have been fitted to the car after manufacture are included as well.

Approved Repairers - Approved repairers are those who have been given approval by a specific insurer to make the repairs to damaged cars. The processing of a claim should be quickened if you use one of these repairers.

Cancellation of the Insurance Policy - In the insured decides to cancel or terminate a car policy, he will most likely have to pay cancellation fees.

Certificate of Car Insurance - The Certificate of Insurance details a summary of the car insurance cover. It is a permanent document that is typically required when an owner decides to “tax” the car.

Claims - Claims are formal requests to recover any and all damages incurred by the insured car driver. They must be presented to the insurer for processing along with any required documentation.

Commission - With a commission, an intermediary puts together a sale of insurance for the primary insurer. When this scenario occurs, the intermediary is paid a commission by the insurer for services rendered.

Comprehensive Cover - Comprehensive Cover is designed to protect your loss in a variety of situations. This is the maximum cover available for cars. It provides insurance cover on a car for damage, loss, theft, and liability to third parties. It includes some of the benefits that are available for a fee to individuals without comprehensive cover such as personal injury cover, medical expenses cover, and damages to personal belongings located on a car.

Condition of Car - The driver is required by most insurers to maintain the condition of his car to a road worthy or reasonable standard. A reasonable standard is typically one that places a car in a better condition than a road worthy standard.

Cover for Legal Expenses - Legal Expenses Cover, a special addition, can be used to obtain benefits to cover the cost of losses that have been incurred but are not covered by the basic insurance cover policy. A variety of losses are included under legal expenses cover. However, the exact terms are set by the particular insurer and the policy specifications. 

Cover Note - The cover note is the document that the insured receives at the time the insurance policy is taken out. The policy document, which is more comprehensive in detail, replaces the cover note shortly thereafter.

Customs and Classics - Customised and classic cars are more difficult to value than standard cars. Typically, the owner does not receive the full value that he values his car to have.

Endorsements - Endorsements, also referred to as amendments, are the modifications that are made to the initial insurance policy.

Estimated Car Value - The estimated car value is one that is given to a car at the onset of the insurance policy’s underwriting.

European Breakdown Recovery - European Breakdown Recovery Cover is used when the car driver is riding in a different locale than his home town. It refers to the service cover that is provided for accident and breakdown emergencies that occur out of town. If necessary, assistance is sent to that location when certain types of accidents occur. These include: break down, stolen car, accident, or the car is damaged by fire.

Excess - Excess is the term used to refer to the fees the insured must pay if the car becomes damaged, lost, or stolen.

Exclusions - Exclusions include the events for which the insurance company is not required to pay out due to the terms and conditions of the insurance policy cover.

Fault Claim - A fault claim is a claim in which the policy holder can not recoup the policy excess. He is not able to recoup the no claims discount either.

Foreign Use - Foreign use covers those riders who frequently travel to another country that falls under the membership of the European Union. One of the restrictions of this type of cover is a maximum number of days that can be included in use. The car must also be resident in the UK for a period of at least 6 months out of the year.

Hire Car - A hire car is one that is used during the interval before the damaged, lost, or stolen car is repaired or replaced. The cost of hiring a car is covered by the insurance policy cover.

Insured - The policyholder is known as the insured. The name of the insured is clearly defined in the policy schedule in clear and specific terms.

Insured Value - The insured value is the maximum amount the insured can receive under the terms and conditions of your policy. It is the largest sum of money that could be given out for a claim, but not necessarily the amount that is given out.

Insurer - The insurer refers to the person that the insured deals with in order to apply for and receive insurance cover.

Market Value - Market value is the precise value of a car prior to any accident or damage that occurs. It is the amount of money the insured will get when a claim is processed, goes through the proper channels, and is approved. Typically, this value is what it would cost to replace the car with another one in the exact same condition.

No Claims Discount - The no claims discount is usually a discount that is reflected in the insured’s insurance policy premium. While the exact length of time that must pass without a claim varies, the average is five years.

Period of Insurance - The period of insurance is listed in each policy schedule. This is the length of time that the insured will be covered by that particular policy.

Policy - The policy refers to the set of documentation that is included with the insurance cover. It includes the proposal form, the policy booklet, the policy schedule, as well as the certificate of motor insurance.

Policy Schedule - The policy schedule lists the details for what types of damage are covered and what is not covered.

Policy Terms and Conditions - The Policy Terms and Conditions refer to the general terms and conditions that apply to the insurance policy.

Premiums - Premiums are the initial fees that the policyholders pay in exchange for the insurance cover.

Proposal Form - The proposal form includes the information that the insured must provide to the insurer during the application for the insurance cover.

Renewal Notice - The renewal notice is the document that is sent to the insured when it is time to renew the insurance policy.

Replacement Value - The replacement value refers to the amount that the insured would need to pay in order to replace the car. Replacement value is only available under a higher premium that covers “new for old.”

Secure Carpark - A manned barrier, a monitoring system, or an intercom system are all terms that can be used to indicate a secure car park. It refers to a place that is “Safe” to park the car. 

Social, Domestic, and Pleasure only (SD&P) - Social, Domestic, and Pleasure only cover refers to personal use of a car that is related to social, domestic, and pleasure activities.

Social, Domestic, Pleasure, and Commuting Only (SDP&C) - This particular type of cover refers to the personal use of a car related to social, domestic, and pleasure and traveling activities to and from work.

Third Party - Third Party refers to an individual who is involved in a claim but who is not the insured or the insurer.

Third Party, Fire, & Theft Cover - Third Party, Fire, & Theft Cover is designed to protect the insured when accidents involving a third party occur. This cover also protects the insured against damages that have occurred due to fire or the theft of the car.

Write Off - The term “write off” refers to a car that has been damaged beyond repair as determined by the insurance company.