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It is easy to get confused by jargon and vague terms when trying to understand
exactly what a policy entails and when reading through policy details. Below we
have listed some important terms used in insurance dealings.
| Breakdown cover |
breakdown cover will protect you for
costs of your vehicle breaking down unexpectedly. You can get breakdown cover
for both home and abroad, refer to your policy for details. |
| Excess |
excess is the amount of money that you
pay before your insurance company has to shell out. Younger drivers usually have
to pay higher excess because they are considered high-risk cases. |
| Exclusions |
exclusions are particular situations
in which you and your vehicle will not be covered by your UK car insurance policy.
These might include medical expenses for another driver in an accident or loss
or damage to property belonging to anyone other than the insured driver. Read
your policy details thoroughly to discover what your exclusions might be. |
| First party, second party, third
party |
these are legal terms. The first party
refers to you, the second party to your insurance company and the third party
to the person or thing with which you have an accident. |
| Fleet insurance |
this is a term used to refer to more
than one car being insured by the same company for the same policyholder. Fleet
insurance often comes with discounted premiums. |
| Insurance premium tax |
also referred to as IPT is the tax imposed
by the Government on almost all insurance products sold in the UK. This works
out at about 5% on motor insurance policies. |
| International Driving Permit IDP |
see more
detail on driving abroad. |
| Liability |
this term refers to your financial responsibility
to a third party or parties incurred during an accident. |
| Motor schedule |
a document detailing your policy, excesses,
premiums and endorsements. |
| Named Drivers |
these are the people named on your policy
who are included in the cover for your vehicle whilst driving. |
| No claims bonus |
this refers to the discount the consumer
has earned on a previous insurance policy. Discount is allocated according to
the number of claim-free years that the driver has had. You will be asked about
this when you take up a new UK car insurance policy and will need proof for your
new insurer. |
| Premium |
refers to the cost of your car insurance
policy. Usually this is paid off in gradual increments or instalments. |
| Tracker |
an accessory fitted to your car which
will enable it to be traced if it is stolen in the UK. |
| Uninsured loss recovery |
this is also referred to as ULR and
is an additional insurance protection. Your UK car insurance company will cover
you for losses in case of accidents caused by a third party. |
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