Just as other financial products have their own unique terms and confusing jargon that sound like nonsense to those who don’t deal with it every day, so does the car insurance world. When you are trying to find the best car insurance deals, it is important to know what insurance companies and their agents are talking about. For this reason, we have created a jargon glossary to help you to decipher these terms.
ABI Group – All vehicles are classified into groups that are arranged by the Association of British Insurers. There are 50 of these groups in all. The ABI group that your car falls into will determine how much your insurance will cost. For example, if your car is in group 5, it probably has a smaller engine and quite a few safety features. However, a powerful, high performance sports car might fall into group 50.
Approved Repairer – Most insurance providers would rather any repairs done on a car that they insure is performed by a garage that they are familiar with and trust to do the work. These garages and repairmen are known as approved repairers.
Comprehensive – Often known as ‘fully comprehensive’, this is the most complete variety of insurance on the market. Keep in mind that every insurance company has their own opinion of what this means, so don’t neglect checking out the coverage simply because it is called comprehensive.
DOC Cover – DOC stands for Driving Other Cars. This does precisely what it sounds like. It covers you when you drive vehicles other than the car that is on your policy.
Fault Claims – Fault claims refer to situations in which the insurance company cannot regain its expenses, such as an accident involving someone who was driving while not insured.
No-Fault Claims – This refers to situations in which you were not at fault. In these, your insurance provider can claim their expenses back from third parties involved in an accident.
Indemnity – The payment that is given to the policy holder, which guarantees that the person is in the same condition financially after an accident as they were before it occurred.
IPT – This stands for Insurance Premium Tax, which is a tax that is paid on your insurance premium payments. This typically begins at 5%, but can go up to higher rates, up to 17.5% for some varieties of car insurance.
Loss Adjuster – Loss adjusters investigate claims made on insurance policies. They make sure that the claims are genuine and the insurance provider that they work for does not pay over the odds.
Material Fact – This is the failure to reveal information that might invalidate an insurance policy, such as significant car modifications or driving convictions.
S, D&P – This stands for Social, Domestic, and Pleasure. This is the variety of coverage that you need if you will be using your vehicle strictly for purposes that do not relate to your work. A car that will be driven back and forth to work or that is used often in connection with your job will need commuting or other provisions added to their policy.
Settlement – The money that you are paid by your insurance company on a claim is called the settlement. This also refers to your claim being completed by payment.
TPFT – This stands for Third Party, Fire and Theft, a variety of insurance coverage that insures your car against damages to the property of a third party, as well as for fire or theft to your own car.
TPO – This stands for Third Party Only, and is a variety of cheap car insurance that is the base minimum that is legal to cover you and your car. It provides insurance solely against damages to property belonging to other people and their injury claims.
Underwriter – Underwriters work inside insurance companies. These are the people who decide if the company will accept the risk that an applicant represents. If they are willing to do so, the underwriter will decide how much the customer will be charged.
Under-insured – If your vehicle is insured for less than it is worth, it is under-insured. When you make a claim, even if it is not for the full value of the vehicle, the insurance company can refuse to pay a percentage difference. For instance, if your vehicle is valued at £15,000 but you have it insured for £5,000, the company can refuse to pay the full amount of any claim that you make, refusing up to 33% of it. This percentage would differ depending on how severely the vehicle is under-insured.
ULR Cover – This stands for Uninsured Loss Recovery and is also known as Legal Expenses Coverage. It means that you can recover any finances that are spent on legal expenses in the event that your accident ends up in court.
Uninsured Loss – Items that are not covered by your insurance policy are uninsured losses, which could include things such as legal expenses or personal belongings inside the car.