Car Insurance Glossary

Car Insurance Glossary

by David Redmond on 10 Jan, 2011

Accident

Usually referring to a fatality or injury, an accident is an unexpected event. It is possible to prevent some accidents and the financial damage that could be incurred by an accident can be limited by taking out accident insurance.

Accident insurance
Insurance that covers certain injuries that could not have been expected, such as loss of a limb or vision.

Act of God
An accident that occurs in extraordinary circumstances that couldn’t possibly have been foreseen. An example of an Act of God would be any damage caused by a storm.

ADD
Accidental Death and Dismemberment

Agent
Within insurance, an agent is someone who acts on behalf of another person, as an insurance salesman acts on behalf of the insurance company.

Arbitration
A process by which two disputing parties come to a suitable conclusion.

Arrears fee
Charges for any payments that are not made on time.

Beneficiary
The recipient of a benefit.

Benefits
The money an insurance company pays out to a claimant.

Broker
An agent who, for a fee, brings together two parties to enable them to enter a contract.

Broker’s Fee
The fee paid to a broker for their services.

Cancellation Clause
A condition of the contract that enables either the insurer or the insured to cancel a policy before its expiration date.

Caveats
When an insurance quote is made, caveats are the conditions made within it.

CII
The Chartered Insurance Institute; the Governing body for the Insurance Industry.

Claim
A notification made to an insurance company that a payment is due.

Co-insurance
When two or more insurers cover a risk together.

Conditions
The details of the duties and rights of both the insurer and insured.

Contract
A legal agreement between two parties.

Cooling Off Period
The time period in which a person may cancel an agreement without incurring any penalty.

Cover
The risk that your insurance policy protects you against is described in the cover.

Excess
The first part of any insurance claim that must be covered by the insured.

Exclusions
Instances that are not covered by an insurance policy.

Insurance Group
Insurance groups assess the risk of particular vehicles. Numbered from 1-20 with higher risk vehicles, such as Ferrari’s, belonging to Group 20.

No Claims Group
A discount given by insurers if the insured have not made a claim in the previous insurance periods.

Premium
The payment made to keep a policy in place.

Repayment plan
A plan made to arrange repayment of money owed to an insurer.

Quotation
A detailed documentation of itemised costs and fees that would be incurred in an insurance deal.

About the Author

David Redmond


David Redmond is a Partner of Don Gilliard Finance Group. He is a fee-only, independent financial advisor and financial planner. For over 15 years, he has been helping individual investors and their families realize their investment goals.