Car Insurance Terms

A Glossary of Important Car Insurance Terms

An Act of God
Events not caused directly by an individual that causes damage to your vehicle. An example would be lightening.

Aggravated theft
The violent theft of your vehicle while you or your partner is inside the car.

Betterment
The payment by the insured party (you) towards a claim in recognition of the fact that the vehicle will be worth more following repairs pursuant to an insurance claim than it was before.

Car
The insured vehicle but also accessories such as spare parts, car audio equipment and navigation equipment permanently fitted to the vehicle.

Certificate of Insurance
The actual certificate that evidences the fact that you have taken out vehicle insurance.

Claim
A formal application by the insured person/persons to recover damage from the insurance company under the policy.

Commission
Fees paid to an intermediary by an insurance company for promoting the sale by that intermediary of its insurance products.

Comprehensive Vehicle Insurance
Insurance giving the policy holder the maximum cover that is available.

Endorsement
An amendment to an insurance policy. Do not confuse this with an endorsement on your license.

Excess
The amount that the policy holder has to pay before the insurance company will make a contribution towards an insurance claim.

Exclusion
A circumstance in which the insurance company is not obliged to pay out under the vehicles insurance policy.

Insurance Premium Tax
This is a tax levied on nearly all non life insurance policies including car insurance policies payable by the policy holder.

Market value
The actual market value of a vehicle of similar age and similar condition at the time of the accident or loss.

Physical assault
This is an intentional violent act committed by another person that causes death or serious bodily injury.

Policy
The actual contract or document between the insurance company and the policy holder that sets out the legal rights and obligations of each party.

Premium
The agreed amount paid by the policy holder for insurance.

Renewal notice
A notice sent by the insurance company to the policy holder inviting them to renew the policy.

Sum insured
The total amount for which the vehicle is insured for.

Third party
A person or persons involved in the claim who is neither the policy holder nor the insurance company.

Underinsurance
The amount by which a vehicle is underinsured. Unusual in the context of car insurance.

Utmost good Faith
The principle that requires the policy holder to provide all relevant information to the insurance company in good faith.

Write Off
A vehicle which is in the view of the insurance company, not capable of being repaired or which would cost more to repair than to replace.