Have you ever felt frustrated and confused by the amount of jargon used in car insurance policies? Whether you’re buying a policy for the first time or looking to renew your insurance cover, understanding the terminology used by insurance companies can be a complicated business.
To help you cut through the jargon, the guys from motor insurance comparison site Tiger.co.uk have put together a useful ‘jargon buster’ infographic with complicated terms translated into plain-old English.
Compulsory excess vs. voluntary excess
All car insurance policies carry an excess, which is the amount you have to pay towards any claims. The excess usually comes in two parts: the compulsory excess, and the voluntary excess.
A typical compulsory excess might be £300, so if you make a claim for £700, the insurer would pay only £400. It’s worth bearing the excess in mind before you put in a claim. Policies for young drivers will often have a higher compulsory excess due to a lack of driving experience.
Voluntary excess is the amount of money a driver chooses to pay in the event of a claim, usually starting at £50 or £100. If you are prepared to agree to a higher voluntary excess, you might be able to negotiate a lower premium, but it’s a good idea to check if any compulsory excesses already apply to the policy, as voluntary excess is paid in addition to any compulsory excess.
Fault vs. non-fault claim
The terms fault and non-fault can be confusing. A non-fault claim is simply a claim where the insurer is able to recover all their costs from someone else. If they are not able to recover all their costs, then it is a fault claim – even if the insured party didn’t cause the claim to happen.
For example, a theft is typically classed as a fault claim. This is because even though the driver is not to blame for the theft, there is no third party to pay the costs so the insurance company treats it as a fault claim.
The registered keeper is not necessarily the legal owner of the vehicle. For example, you may drive a company car that is owned by your employer or rental company, in which case, you would be the registered keeper.
The registered keeper will be responsible for the vehicle’s day-today use on the road and liable for licensing the vehicle. Some companies won’t arrange car insurance online if the owner and registered keeper are different people.
For more information on other confusing car terms, check out the ‘jargon buster’ infographic below: