Glossary
- Act of God
An event outside of human control, such as sudden floods or other natural disasters,
for which no one can be held responsible.
- Assured
Another name for insured.
- Breakdown cover
Provides car owners with assistance in the event of their car breaking down, with a
mechanic either attempting to fix the car at the roadside or taking it to a garage.
- Buildings insurance
Pays the cost of repairing or rebuilding your home if damaged by unforeseen events
(as detailed in the insurance policy).
- Car insurance
Car insurance is a policy that protects the car owner and other road users from monetary
loss if their vehicles are damaged.
- Comprehensive car insurance
Covers you for claims made by other people for bodily injury or damage to their property,
cover if your car is stolen or fire damaged, and accidental damage to your car.
- Contents insurance
Covers the cost of replacing possessions lost or damaged due to unforeseen events
(as detailed in the insurance policy).
- Cooling off period
A period of time (usually 14 days) in which you can cancel the policy.
- Critical illness cover
A financial product that, in return for a regular payment, pays out money if the
policyholder contracts one of the illnesses the policy specifically covers.
- Cover
Cover describes exactly what risks you are insured against in your insurance contract.
- Excess
The amount a policyholder will have to pay as a result of making a claim on an insurance policy.
If for example, the bill to fix your car was £500 and the excess was £100, the insurance
company would pay £400 and you would pay £100.
- Insurance premium
A payment made to a company in return for financial protection for a given period of time.
- Insurance premium tax
A tax taken by the government which comes as a percentage of the insurance premium.
- New or Old
The insurer will replace the item you are claiming for with one of the same make and specification.
- No claims bonus
A reduction in the cost of an insurance policy granted to the policy holder for not making a
claim in the previous period of cover, usually a number of years.
- Payment protection insurance
Provides cover for people taking on debt if their circumstances change and they are unable
to meet repayment requirements.
- Pet insurance
Insurance that is intended to pay the veterinary costs if one's pet becomes ill or is injured in an
accident. Some policies will also pay out when the pet dies, or if is lost or stolen.
- Policy
A document which gives all the details of the insurance cover that the insurer is contracted
to provide you with.
- Premium
The amount you will have to pay insurers, either every month or every year for your insurance.
- Protected No Claims Bonus
After you have made no claims against your policy for a certain number of years, insurers will allow you
to protect your no claims bonus. If you subsequently make a claim against the policy the number of years of
no claims bonus will remain the same.
- Third Party Car Insurance
Covers you for claims made by other people for bodily injury or damage to their property.
- Third Party, Fire and Theft Car Insurance
Covers you for claims made by other people for bodily injury or damage to their property,
plus your car is covered if stolen or fire damaged.
- Travel insurance
Insurance that is intended to cover medical expenses, financial, and other losses incurred while
traveling.
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