Things to consider before buying car insurance
You may want cheaper car insurance but it is important to know what you are getting for your money. The cover offered by different car insurers can vary, so before making a decision based only on price it's best to look and compare what the policy is actually giving you. The guide below explains some common car insurance terms used by insurers.
Car insurance terms
ABI group or Car insurance group – All vehicles have an insurance group rating, this is dependent on a number of factors and will effect the price of your premium.
Approved repairer – These are garages that car insurers have approved to do repair work on vehicles.
Comprehensive cover – Comprehensive cover is the most complete type of car insurance you can buy.
DOC cover – This stands for Driving Other Cars. If included in your policy terms and conditions you are able to drive other cars with the owner's permission.
Fault/No-fault claim – This is where you are not at fault for the claim. Your insurer will be able to claim back the costs from a third party. A fault claim is where your insurer is unable to claim back the costs from the party at fault, normally due to the fact they were not insured.
Indemnity – An indemnity payment puts the policyholder back into the same financial situation after an accident as they were beforehand.
Insurance premium tax (IPT) – This is a tax that is paid on all insurance policies.
Loss adjuster – This is a person employed by the insurer who is responsible for investigating claims. They make sure that they are legitimate and that the insurer isn't paying out too much to settle the claim.
Quote – The price that the insurer gives you on offering cover.
SD&P – Social Domestic and Pleasure. This term refers to what the car will be used for on a daily basis. If the car is going to be driven to work, then commuting must also be added onto the insurance.
Settlement – This is the payment that you will receive from your insurer once your claim has been resolved.
TPFT – Third party, fire and theft a type of car insurance.
TPO – Third party only a type of car insurance.
Underwriter – A person employed by the insurance company and they decide if you're a good enough risk to be offered a quote and how much it should be.
Under insurance – This is when your car is insured for less than it's worth. This could mean that if you made a claim the settlement may not cover the actual value of the vehicle.
Uninsured loss recovery cover (ULR) or Legal expenses cover – means you can claim back for money spent on legal representation should your accident go to court.
Uninsured losses – These are items that are not covered by your car insurance, normally car hire and other charges.