Here are a few common terms you’ll want to be familiar with while you’re shopping around at car insurance comparison sites.
Accident: An unexpected event, usually referring to an injury or fatality. Although some accidents are easier to prevent than others, the financial damage can be limited by taking out accident and sickness insurance.
ABI: Association of British Insurers
Access To Medical Records Act 1988: Terms that insurance companies must follow before approaching a medical practitioner for medical information.
Accident insurance: Insurance that covers you if you suffer certain injuries, such as loss of a limb or vision.
Accident, sickness and unemployment insurance: Insurance cover arranged by the borrower to protect against inability to meet mortgage payments. Unemployment cover is restricted to cover certain events only. Exclusions to this insurance include dismissal due to professional misconduct or taking voluntary redundancy. The accident and sickness cover does not cover any act of self-injury or any injury related to the use of alcohol or drugs.
Act of God: An accident or event that happens in extraordinary circumstances that could not have been foreseen. For example any damage caused by a storm would fall under the Act of God umbrella.
ADD: Accidental Death and Dismemberment
Agent: An agent is someone who acts on behalf of another person. For example and Insurance salesman could be called an Agent as he is acting on behalf of the Insurance Company.
Amortisation: The depreciations in the value of assets, which a company owns. For example, if the company has a fleet of cars worth £1 million, they may set aside £300,000 per year to allow for depreciation in their value.
AMRA: Access To Medical Records Act 1988.
Applicant: Someone who applies for a credit, or other financial product.
Applied or nominal Interest rate: Rate used to calculate interest due.
Arbitration: A process by which two disputing parties come to a suitable conclusion.
Arrears: A late payment, or a payment after the event, for example most salaries are paid “monthly in arrears” – I.e. the first payment is one month after commencement of work.
Arrears fee: Charges for any late payments. See late payment fee.
Association of British Insurers: Association made up of 95% of UK insurance companies. Method by which the insurance companies liase with Government Departments.
Beneficiary: The main recipient of a benefit.
Benefits: The money paid out to a claimant by the Insurance company.
Broker: An agent who brings together two parties enabling them to enter a contract for which he receives a set fee.
Broker’s Fee: The fee paid to the Broker for their services.
Cancellation Clause: A condition of the contract whereby the Insurer or the Insured can cancel a policy before the expiration date.
Caveats: Conditions of an insurance quote.
Claim: Notification to an insurance company that a payment is due.
Conditions: Details of rights and duties of insurer and insured.
Contract: A legal agreement between two parties.
Cooling Off Period: The time period in which a personal may cancel the agreement without incurring any penalty.
Cover: Describes the risk that your insurance policy protects you against.
Direct debits: A payment method that once sets up to pay bills automatically.
Excess: Applies to an insurance claim. Simply the first part of any claim that must be covered by yourself.
Exclusions: Instances and possessions that are not covered by your insurance policy.
Insurance excess: Applies to an insurance claim. Simply the first part of any claim that must be covered by yourself.
Insurance Group: Insurance groups are a method used by Insurers to assess the risk of a particular vehicle. This numbers from 1-20 with the higher risk vehicles such as a Ferrari belonging to Group 20.
Other income: This is income in addition to basic annual salary or, in the case of self-employed, annual net profits.
Period: The length of time for which, or end date until, the initial interest rate applies.
Policy exclusions: This is when you are not covered by your normal insurance policy.
Postcode area: The first one or two letters of the first part of the postcode. E.g. B for Birmingham.
Premium: This is the payment you make to keep your policy in place. See: term assurance.
Professional: A person who is a member of a recognised profession, such as a doctor or solicitor. The definition of a professional can vary substantially from lender to lender with occupations such as banker being accepted as a profession by some but rejected by others. Many professions are disqualified from practising if they become bankrupt.
We hope you found this information useful. Thank you.