Obtaining car insurance can be intimidating for first time buyers. You should arm yourself with a basic knowledge of car insurance terms. Many of these words are widely used but there are several technical terms that can fly over your head so you need to be familiar with them when you are planning on purchasing car insurance.
Accidents - Any unintentional event leading to some form of loss such as collision or injury.
Act of God - Any kind of happening, occurrence or event that transpires due to natural causes. Such acts may include earthquakes, storms, hurricanes, and cyclones. An Act of God in the English court may be claimed against a liability.
Adverse Credit - A poor credit history which can comprise of irregular mortgage arrears, constant payment defaults and insolvency.
Agents - An individual car insurance provider or a car insurance firm that functions on behalf of the insured person. The functions can constitute soliciting, marketing, negotiating and servicing. Agents are also known as brokers and intermediaries.
Certificate of Insurance - A document issued by the insurance provider and given to the insured or to an intermediary. It verifies the fact that the car insurance policy is effective and contains critical details like type of coverage, names of those insured, expiry dates and agreed sums.
Collision Damage Waiver - An agreement with a car rental company where company gives up its right (under this waiver) to collect any accident damages from the vehicle renter.
Constructive Total Loss - When the cost of repair is more than the price of the vehicle. This usually occurs when the car is involved in a serious head-on collision or is a complete wreck.
Contributory Negligence - A legal phrase which means the injured has to bear some responsibility of the injury. Thus they cannot claim full damages from the other party.
Depreciation - The decrease in the worth of a car over a time period. A depreciation of a vehicle is conditional on the model and the brand of your car.
Deductible - The portion of money which you agree to pay for every claim or for every accident, towards the total of insured damages.
Effective Date - The date on which your car insurance policy, with its compulsory terms and conditions, comes into effect.
Excess - The amount of money that the insured has to pay towards the price of a claim. This is done to discourage the claimants from claiming on minor damages including scratches or dents.
Exclusions - Certain conditions, situations or circumstances that your car insurance policy will not cover.
Fire and Theft - An agreement in which the car renter is solely responsible for the loss or damage to the rented car; the loss or damage is due to fire breakout or theft.
Fleet Policy - A car insurance policy applicable for three or more vehicles used by commercial car businesses such as car rentals, car dealers and garages.
Insurable Interest - If a substantial loss occurs to a fleet of cars, such as destruction and vandalism, leading to severe financial ruin, the policy holder has insurable interest.
Knock for Knock Agreement - A time saving and cost effective agreement whereby more than one insurance company shares the responsibility of paying claims for its insured client following a collision or an accident.
Premium - A regular payment of money towards a car insurance policy. Premiums are different for each type of coverage.
Waiver - A written relinquishment of something such as a right by a passenger. A waiver tends to be a voluntary gesture.
Windscreen Insurance - Coverage provided to the windscreen of your car. This insurance usually comes under fully comprehensive car insurance policy.
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