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glossary OF TERMS

Car insurance glossary

Car insurance terminology got you in a tizz? Our handy guide will explain all

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A

Accident
An accident is an unexpected, undesirable and possibly violent event that results in damage and harm to someone and/or something.
Accidental damage
Accidental damage is damage caused suddenly, by external means, that isn't expected and isn't deliberate.
Additional drivers
Additional drivers are drivers you name on your car insurance policy in addition to you, the policyholder.
Advanced driving qualification
An advanced driving qualification is a way of improving your road skills, helping you to be a better driver. The Institute of Advanced Motorists (IAM) offers Advanced Driving Tests.
Aggravated theft (car-jacking)
Aggravated theft, also known as car-jacking, is where you or your spouse are physically assaulted as a result of your car being subjected to a theft or attempted theft.
Approved repairer
An approved repairer is one we've approved and authorised to repair your vehicle following a claim.

B

Breakdown
A 'breakdown' is when the vehicle is incapable of operation as a whole because of mechanical or electrical failure, theft or attempted theft, vandalism, accidental damage, a flat tyre, a lack of fuel or incorrect fuelling during the period of cover. Failure of any parts of the vehicle to function e.g. an indicator, headlight, windscreen wiper or convertible roof does not constitute a breakdown, unless the failure causes the vehicle to be incapable of operating as a whole, or is likely to result in the driver being prosecuted for using a defective vehicle.
Business use
Business use is when you use the insured car for business purposes, travelling to more than one place of work and between places of work.

C

Cancellation
Cancellation is the ending of a policy before it's due to expire. There may be a cancellation clause in a policy setting out the conditions under which the policy may be cancelled by notice. Cancellation may mean you get back some of your premiums, but in many cases you won't get anything back. Please check the LV= car insurance document to find out our cancellation policy.
Certificate of motor insurance
A certificate of motor insurance is proof that your car is insured, and is required by law if your car is used or kept on a public highway.
Claim
You make a claim when you ask your insurer to pay you the sum of money that is owed to you under the terms of your insurance policy.
Comprehensive car insurance
Comprehensive car insurance covers damage and vandalism caused to your car as well as damage and/or injury you cause to another vehicle or its driver in an accident. It also covers your car if it's damaged by fire or stolen and not recovered.
Cooling-off period
A cooling off period is the time you have to change your mind when buying insurance or other financial products or services. The actual time varies, so check your policy details.

D

Document of car Insurance
A document of car insurance is the policy booklet that we send with your other car insurance documents.
Driver and Vehicle Standards Agency (DVSA)

The Driver and Vehicle Standards Agency is part of the UK Department for Transport (DfT) with responsibility for setting the standards and conducting theory and practical driving tests. The DVSA is also responsible for the:

  • statutory regulation of driving instructors and trainers
  • promotion of voluntary registers and non-statutory activities to improve driving standards

Visit www.dvsa.gov.uk for more information.

DVLA Driver and Vehicle Licensing Agency
The Driver and Vehicle Licensing Agency is an executive agency of the Department for Transport (DfT), responsible for, among other things, issuing driving licences and vehicle registration documents. www.dft.gov.uk/dvla

E

European insurance cover
European insurance cover is cover if you take your car to Europe. All LV= car insurance policies give you the same level of cover as you have in the UK to drive in any of the EU countries for up to 180 days.
Excess
An excess is the amount that you have to pay towards a claim. A compulsory excess is an excess applied by your insurer and could vary depending on your circumstances. A voluntary excess is a figure agreed with your insurer, usually where you agree to pay a higher part of each claim in return for a lower premium. Excesses vary between different types of cover (car, home, pet and travel). Refer to your schedule and document of insurance for more information.

F

Foreign use
See European insurance cover.
Fronting
Fronting is when a driver is added to a car insurance policy as a named driver when in reality he or she is the main driver. If you do this, any subsequent claim could be rejected because you've supplied false information when applying for your car insurance.

G

Grey import
A grey import is a vehicle designed and built for sale outside the EU, and imported into the UK. Grey imports might not meet European specifications or pass European approval.

H

Highway Code
The Highway Code is a list of rules, many of which are legal requirements, that applies to all road users. The Highway Code is essential reading for everyone who uses the roads. Its rules apply to all road users: pedestrians, horse riders and cyclists, as well as motorcyclists and drivers. You can get a copy of the Highway Code online at www.direct.gov.uk/highwaycode.
Hire car
A hire car is a rental car that may be paid for by an insurance company whilst your car's off the road or stolen and not recovered.

I

Immobiliser

An immobiliser is either:

  • an electronic anti-theft device that helps stop the engine being started. Usually activated when you remove the ignition key or ignition device from the vehicle. Usually factory-fitted by the manufacturer but may be retro-fitted and supplied with certificate of installation; or,
  • a manual or mechanical immobiliser. Usually fitted to the steering wheel or manual gear stick
In-car equipment (ICE)
In-car equipment means audio equipment, a permanently fitted car telephone, dashboard or windscreen mounted camera, DVD player, television and satellite navigation equipment

K

Kit car
A kit car is a car assembled from a collection of parts sold in kit form, usually needing specialist insurance. A kit car usually has a number plate with a 'Q' prefix.

L

Legal expenses cover
Legal expenses cover is insurance against any fees you might have to pay if you consult or hire a lawyer, or if you're involved in other legal proceedings. Legal expenses cover is sometimes included with a policy or may be available as an optional extra. Legal expenses cover is often offered with home or motor insurance.

M

Main driver
The main driver is the person who uses the car the most; whether for social purposes or for travel to and from a place of business, duty or study.
Modified car
A modified car is one that's been altered from its manufactured specification and can relate to performance or look of the vehicle but can also include modifications related to disabled driving equipment.
MOT
MOT is the Ministry of Transport test. It's an annual safety and roadworthiness test that applies to all UK-registered cars over three years' old.
Motor Insurance Groups
Cars used to be rated by insurance companies on a scale of 1 to 20. On 1 January 2010, a scale of 1 to 50 was introduced. The rating is based on the engine size, repair costs, risk of theft, 0-60 and top speed. Cars with a lower rating are usually cheaper to insure.
Motor Insurers' Bureau (MIB)
The Motor Insurers' Bureau is an organisation established in 1946 to compensate the victims of negligent uninsured and untraced motorists. www.mib.org.uk
Multi car insurance
Multi car insurance means different things to different insurance companies; some companies put more than one car on the same policy, some offer a discount for a second, or subsequent, car insurance policy. LV= goes one stage further than that and actually offers a multi-insurance discount if you take out any combination of LV= insurance policies, not just multi-car insurance.

N

New Drivers Act
Under the New Drivers Act, if you get six or more penalty points on your licence within two years of passing your driving test, the DVLA will revoke your driving licence and you'll need to reapply for a driving licence as a learner driver and re-sit your driving test.
No claim discount
No claim discount or no claim bonus gives you a reduced premium for not making a claim on your car insurance policy. The longer the period of no claim, the higher the discount. Note: it's a no claim bonus, not a no blame bonus. Also see guaranteed no claim discount or bonus.

O

Optional extra
An optional extra is an additional feature that you may wish to buy when you take out a policy.

P

Pass Plus
Pass Plus is a training course aimed at new drivers that aims to build on your driving skills and make you a safer driver.
Personal accident benefit
Personal accident benefit is a policy or a feature of a policy that pays a specified sum if you're injured in an accident. The payout may be weekly, for a set period, or a lump sum.
Policy
Your policy is a formal, legally-binding contract of insurance that includes the terms of your cover.
Premium
A premium is the amount you pay for your plan or policy. The frequency depends on the type of cover that you have, and could be a single 'one-off' payment, monthly Direct Debit, or a yearly payment.
Protected no claim discount or bonus
Your no claim discount (NCD) or bonus gives you a reduced premium for not making a claim on your car insurance policy. The longer the period of no claim, the higher the discount. If you have a minimum of four years NCD then you can guarantee it, meaning that it will be protected for the life of your car insurance policy, no matter how many claims you make. Having protected no claim discount doesn't mean your premium won't increase in price.

R

Registered keeper
The registered keeper of a vehicle is the person recorded by the DVLA as being liable for the licensing of the vehicle and declaring it off the public road (SORN) and the person the police would contact about motoring and parking offences. The registered keeper is not necessarily the legal owner of the vehicle.
Renewal date
A renewal date is the date that your policy will end unless you renew your policy and pay the appropriate premium to continue with the cover.
Renewal notice
A renewal notice is a letter we send to you at least 21 days before your annual policy is up for renewal and due to expire.

S

SORN (Statutory Off Road Notification)
A Statutory Off Road Notification is a declaration by the registered keeper that a vehicle isn't taxed because it's kept off the road.

T

Tracking device
A tracking device is a security feature that can help the police find your car if it's stolen.

U

Uninsured Loss Recovery (ULR)
If a motor accident was the fault of a third party, we'll try to recover your uninsured losses such as repair costs, policy excess, loss of use, hire costs of alternative vehicle, transport costs, etc.

V

Voluntary excess
You may be able to specify a higher excess, known as a voluntary excess, in order to reduce your premium. The excess is the amount of an insurance claim that will be paid by you and is normally collected by the repairer or deducted from the total loss amount if your car is written off.

W

Windscreen cover
Windscreen cover is breakage or damage insurance cover for your car's windscreen and windows.
Write-off
A vehicle may be written off because it's either not repairable or would cost more to repair than to replace or is unsafe to repair.