Glossary

A

ABI

An acronym for the Association of British Insurers - An association representing some 450 insurance companies which account for over 95% of the business transacted by UK insurance companies. It is also the forum through which UK insurance companies collectively liaise with Government Departments and other bodies and come together to set industry standards and codes of practice.

Accidental damage (buildings)

This extends the basic cover to full accidental damage cover. An example of this would be putting your foot through the ceiling while in the attic.

Accidental damage (contents)

This extends the basic contents cover to protect all of the contents against accidental damage caused by the client or their family, e.g. paint spilled on the carpet.

Act of God

An accident or event which happens independently of human intervention, usually due to natural causes such as storm or earthquake, which no human foresight can provide against. Suggesting that an event was an "act of God" may be a defence in English law against a claim for liability since it may be held that it could not have been foreseen or safeguarded against. One of the reasons why it can be inadvisable to drive your vehicle in adverse or dangerous weather condtions.

Actuary

Professional person trained in the technical aspects of insurance and related fields who specialises in the mathematics and the calculation of premiums and reserves.

Addendum

An addition or change to a contract.

Agent

Someone who acts on behalf of another. Traditionally, insurance company salesmen have often been called agents. This has led to a certain amount of confusion since in some situations they are acting on behalf of the client and at other times they are acting on behalf of the insurance company.

Agent recommendation

A product or service provider recommended by estate agents, mortgage brokers or building societies with whom they have often negotiated favourable terms and so can offer a special deal as part of the package. It should never be a mandatory requirement that you must use their selected firm or product, and if they do insist, then it might be worth complaining. Companies often receive financial incentives to recommend one particular firm, product or service - whilst this is perfectly legal, it means they don't necessarily have your best interests at heart.

Agreed valuation

In certain circumstances an insurer may agree to insure a vehicle for a declared value from the outset, as opposed to paying the market value following a claim. This will usually relate to classic cars and Endsleigh do not offer any agreed valuation policies.

All risks

An insurance policy that covers all risks - except those not listed under its exclusions.

Annual policy

As it sounds, an insurance policy that applies for a full year rather than another specified period of time such as a holiday insurance policy.

Approved repairer

A team of insurer approved repairers who operate across the country.

Approved tradesmen

As it sounds, tradesmen may be selected by your Insurer who they may insist that any repair work on your home is carried out. It might be that favourable rates have been negotiated by the Insurance Company or that the tradesman may have been approved due to meeting a certain standard of workmanship.

Arbitration

This is a method employed to arrive at an acceptable agreement for two parties that are in dispute. An independent person or body, often a member of the Institute of Arbitrators, listens to the situations of both parties and comes to a decision that will end up being binding for all concerned.

B

Beneficiary

The ultimate recipient of a benefit an example being an insurance payout.

Blanket insurance policy

A policy that is designed to covers more than one person or more than one property.

Breach of contract

This would be when someone fails to conduct a provision of a contract.

Breakdown cover

A policy that provides recovery and repair services for vehicles/motorists for when they break down.

Broker

An agent who brings two parties together, enabling them to enter into a contract to which he is not a principal. His remuneration is usually calculated as a percentage of the sum involved in the contract but may be fixed according to a tariff. Brokers are used because they have specialized knowledge of certain markets or to conceal the identity of a principal, in addition to introducing buyers to sellers.

C

Cancellation

A policy may be cancelled at the request of either party - usually the client.

Cancellation and curtailment

This is the costs incurred if the Client is forced to cancel their trip, or end it suddenly, due to circumstances out of their control.

Carport

This is effectively a roof that covers a driveway or other parking area, which does not have a door like a garage.

Cash surrender value

This is the amount of money that is received by a policyholder when they surrender an insurance policy.

Certificate

A legal document, recognised in law, which proves that insurance cover is in place.

CII

An acronym for the Chartered Insurance Institute, a body that controls professional, eithical and educational standards in the insurance industry.

Claim

A request from an insured person for payment from the insurer.

Co-insurance

An arrangement by which a number of insurance companies cover a particular risk.

Collision damage waiver

An optional insurance premium that you may be able to take out which removes your liability to pay an insurance excess, should your vehicle be involved in an accident a vehicle such as a hire car.

Commercial vehicle insurance

Any vehicle used exclusively for business - mainly vans. Endsleigh do not specialise in this form of insurance.

Commission

The percentage of the premium cost that an introducer will receive.

Comprehensive cover

Usually the most expensive cover for car insurance. As per its name it offers the most comprehensive cover. It not only covers damage to third parties vehicles by also your own as well as losses incurred by fire and theft.

Conditions

These are provisions in an insurance contract that state the rights and duties of the insured and of the insurer.

Contract

A legally enforceable agreement between two parties.

Contractual liability

If you sign a contract you will end up being bound by the contracts specific terms and conditions - failure to do may incur financial or, in some circumstances, even criminal penalties.

Cooling off period

This is a period in which a customer has the right to cancel a contract of insurance without incurring any penalty.

Cover

When an insurance company agrees to insure a client they are said to be 'covering' them.

Cover note

A temporary certificate of insurance. This will be issued for the short period of time that it takes for the certificate to be prepared.

D

Declination/Decline

This is when an insurance applications is rejected by an Insurance Company.

Default

A default is where for some reason the monthly payment from a client's bank account. A Bank can refuse a payment for any of these 'default' reasons:
Refer to Payer
Account Closed
Mandate Cancelled
No Account
No Mandate
Account Transferred
Instruction Cancelled
Payer Deceased

Deposit premium

The premium deposit paid when an application is made for an insurance policy.

Direct debit

A procedure under which an organisation to whom a payment is due claims the amount directly from the bank account of its debtor. Many insurance companies will require premiums to be paid by direct debit.

Disclosure

This is the duty of any person when they are making an application for an insurance policy to disclose all relevant details that may affect the risk.

Double indemnity

Payment of twice the policy normal benefit for specific kinds of losses under certain conditions.

Driving abroad extension

A policy of UK insurance provides cover within England, Wales, Scotland, Northern Ireland, the Isle of Mann and the Channel Islands. The client will have to inform Endsleigh before travelling outside of these boundaries. The document that acknowledges this is known as a driving abroad extension.

Driving other cars (doc)

In some circumstances a policy will cover a client to drive vehicles other than the one named on the insurance schedule. The cover will only ever be the most basic and is intended for emergency use only. This is given free of charge but may not be included in policies for the disabled, young drivers or people involved in the motor trade.

DVLA

'Driver and vehicle licensing authority'. The government department where details are kept of all of the vehicles on the road, and all of the people with driving licences.

E

Effective date

This is the date on which insurance an insurance policy begins.

Endorsement

These are items or events that are not covered by an Insurance policy - an example would be allowing a driver not covered on the policy to drive the car covered by that policy.

Excess

The excess on a policy is the first part of any claim that the client has to pay.

Exclusions

Events not covered by an insurance policy. Typical exclusions include running a taxi service (for motor insurance), overloading your car, or allowing drivers other than those specified in the policy to take control of the vehicle.

F

Fault claim

A fault claim is one where your insurance company will be unable to recover all of the costs from a claim, e.g. a break in to your car.

Financial adviser

The two categories that these come in are: Independent Financial Advisers (IFA's) who work on behalf of a client and are able to choose from any product or service in the market, or a Tied Agent who work on behalf of a single company and only recommend their products.

Fully comprehensive

For car insurance, this is a policy that covers damage to the owner's vehicle as well as to that of Third Parties (see Comprehensive Insurance).

G

Grace period

The specified period after which a premium payment is due, in which the policyholder may make such payment, and during which the protection of the policy continues.

Green card

This is a recognised document that is issued by an Insurance Company to policyholders who are motoring abroad as evidence that they have the legal minimum insurance cover required.

H

High-risk occupation

This is a job or profession that means that a person may be more likely to have an accident.

Hire and Reward

The insurance required by taxi drivers.

I

Indemnity

The principle by which insurance policyholders are put in the same financial position after a loss as they were immediately before it.

Insurance

An agreement under which individuals, businesses, and other organisations, in exchange for payment of an insurance premium, are guaranteed indemnity for losses resulting from certain events specified within the contract of the policy.

Insurance Premium Tax (IPT)

This is a Government tax charged as a percentage of insurance premiums.

Insured car

The insured car as specified by its registration mark on your current certificate of motor insurance. Some motor insurance policies insure the vehicle, and some insure the driver.

Insured Value

This is the amount of money that a client will insure their vehicle for.

Insurer

The party to the insurance contract who promises to pay losses or benefits, usually an insurance company.

Introducer

These can be either Individuals, companies or websites that contain information regarding specific products or services and 'effectively, as the name suggests, introduce clients to the lender. Introducers usually receive a commission for the of the business that results from them.

J

Judgment

This a decision made either by a court or law.

K

Knock for knock

A term used to describe an agreement between two insurers whereby each will meet the cost of repairing their own insured's vehicle rather than go to the cost of swapping cheques. Because insurer A will meet many claims during the course of a year from insurer B and vice versa this is a sensible saving of administration by each of them that does not affect the client's interest in any way.

L

Lapse

This is when an insurance policy is terminated due to non-payment of the associated premium.

Lapsed policy

A policy terminated for non-payment of the associated premium.

Legal liability

This is the cover we include in our Possessions, Household and Travel policies free of charge which protects the Client if someone should want to take legal action against them.

Loading

There can be deemed a standard or average rate for a persons insurance, the loading is effectively what an individual will be charged in excess of this for their insurance. An example of this could be gender in respect of car insurance as women are generally charged less than a man with the same risk details.

Loss

Insurance terminology to mean being robbed, burgled, injured or in a car accident. A loss gives rise to a potential claim.

Loss adjuster

An independent third party usually used by an insurance company to assess the value of a claim, usually if there is a disagreement between the insurer and the insured.

M

Main driver

The person who uses a vehicle the most.

Market value

This is the cost of replacing a car based on the market price at the time of the loss.

Material fact

A material fact is information that would affect what an insurance company's attitude may be to insuring something, or the premium it would charge. Failing to disclose a material fact could invalidate a policy and is the responsibility of the client.

Motor schedule

This is a document which contains the details of your policy including any excesses and endorsements that is specific to your insurance. It should be read in conjunction with a policy document.

N

Named driver

A driver has been named on an insurance policy but who is not the owner of the vehicle.

New for old (motor)

Rather than pay the market value of a new car involved in a total loss, some insurers will replace it with an identical new car. If it is a brand new vehicle the market value of this vehicle will have depreciated so much in the first year, that it would leave the policy holder unable to replace the car.

New for old (property or possessions)

This means that in the event of a claim, the Client is paid the money needed to buy the items in the shops at today's prices, regardless of the age or original purchase price of the item.

No claims bonus

A no claims bonus (or NCB) is the discount that you have earned on a previous insurance policy for not making a claim. These discounts are determined by the number of years that you have not made a claim for.

Non-fault claim

This is a claim whereby the insurance company is able to recover all the costs from another party.

O

Over insured

This is the trem employed to describe a situation whereby a person has taken out an insurance policy over and above the level of cover thata they actually need and will therefore be paying a higher premium level than actually required. An example of this could be if you over value the worth of you car.

Outbuildings

This means garages (detached or integral) sheds, greenhouses and other outbuildings which are situated within the boundaries of the land belonging to the home.

Owner

The legal owner of a vehicle This does not necessarily mean the person who runs, maintains or actually uses it.

P

Payment Protection Insurance (PPI)

Payments can be 'protected' by paying a small additional premium which means that your monthly installments will be paid for you if you cannot work through illness or redundancy.

Personal lines

Insurance policies that are designed for individuals rather than businesses or organisations.

Personal possessions cover

Insurance for personal items such as money, jewellery and luggage.

Policy

This is the document that gives details of the insurance that the client has purchased.

Policy booklet

This piece of documentation will contain a full list of the terms, conditions and exceptions of your insurance policy.

Policy excess

This is a level of money that you will have to contribute in the event of a claim.

Policy exclusions

These are events or instances which are not covered by your insurance policy.

Policy schedule

A document that details the sum insured, any discounts you may qualify for and the actual premiums you have to pay for your policy.

Policy term

The period of time for which an insurance policy provides cover.

Policyholder

Person to whom the insurer issues a policy.

Premium

The actual amount of money paid in respect of an insurance policy.

Proposal form

The document that a client may complete to request insurance cover and detail what it is that they would like insured.

Protected No Claims Bonus

A client may pay an additional premium to his insurer so that his NCB is not stepped back in the event of a "fault" claim. This benefit is variable but only applies to the existing insurer, and is usually available only when maximum NCB has been accrued.

Public liability policy

This covers legal liability for injury or damage caused to others. Normally part of car insurance.

Q

Quotation

Quotations are provided to demonstrate the actual costs of insurance cover and the documentation forms the basis of a new contract or the renewal of an existing one.

Quote

This is an amount an insurer in this example estimates to be the cost of providing their service based on the information that has been disclosed to them.

R

Registered keeper

This is the person who looks after the vehicle on a day to day basis but does not actually own it.

Renewal

This is an agreement to continue insurance beyond the original term it was determined for. As an example, for a Car insurance policy, a renewal is likely to be made on an annual basis.

Replacement car

If a client's vehicle is off the road undergoing repair, in certain circumstances a replacement car may be provided free of charge.

Rider policy

Some policies offer the facility to ride any bike up to a certain CC. This is known as a rider policy.

Risk

Literally that which is being insured against - e.g. theft, accidental damage.

Risk address

The address that is actually being insured.

Roadside Recovery

A policy that provides recovery and repair services for vehicles/motorists for when they break down.

Road Traffic Act

The first Road Traffic Act (or 'RTA') was passed in 1930, the most recent in 1989-90. This is the legislation which, amongst other things, requires every vehicle on the road to be insured.

S

Schedule or Statement of Insurance

This is a document, fixed to a policy, which gives details of the property and persons insured.

Security

Theft of certain models of car is a major risk for the insurer. If a security device is fitted that has the approval of the insurer, they will often reduce their premium.

Self Contained Accommodation

This means that all parts of a client's home, including kitchens and bathrooms, are only available to, and used by, the client or members of their family.

Settlement

This is when an insurer pays a claim.

Specified Items (property)

Also know as All Risks or SPE (specified personal effects). This is cover outside the property for any item. As the name implies, the client is usually asked to describe the item to be insured and state how much it is worth.

Subsidence

Subsidence is the downward movement of the ground below a building. This may result in cracked walls, movement of walls and foundations and general instability of the building. If a potential client's house shows signs of subsidence, Insurers may be unable to quote.

Sum Insured (Buildings)

The sum insured should be the full rebuilding cost of the property, not its market value.

Sum Insured (Contents)

The sum insured should be the total cost of replacing all contents as new, including furniture, clothes, jewellery, kitchen utensils etc.

Surrender

Where you cancel a policy and usually receive a reduced payout, due to the impact of charges that have been incurred.

Surrender value

The amount that you will actually receive when converting a policy into cash, this is often nothing.

Suspension (motor)

A temporary 'freeze' on insurance cover while, say, a client is abroad and the car is kept in a garage. In order to do this the policy holder must return their certificate of insurance and continue to pay for the policy (if paid monthly or they will not receive a refund if paid in full). When the policy is due to renew the policy holder will then receive a credit for the time they have suspended the policy (if they renew with the same insurer) and they will still accrue their NCB. This helps policy holders who do not have maximum NCB and are keen to reach this level.

T

Term

The period of time for which a policy is issued to cover.

Third party

Any person who:
Becomes involved in a claim against an insurer and their client or
Who is claimed against by an insurer and their client
If you crash your car into someone you are the first party, your insurer the second party, and the person that you collide with is the third party. If they crash into you, the same applies.

Third party, fire and theft

A relatively cheap form of car insurance. Like third party coverage, but with cover against fire or theft as well.

Total loss

This is a decision made by an insurance company that it is uneconomical to repair your car.

U

ULR

The 'Uninsured loss recovery service'. This means that if a client is involved in an accident that is not their fault, the Insurers solicitors will act for them at no cost in order to recover their uninsured losses, e.g. their excess repair costs etc.

Under-insurance

This is the situation when a customer takes out too little insurance, paying smaller premiums than they should. Obviously the insurance company would be well within its rights to only pay out exactly what was covered under the policy which could mean that a similar car would not be able to be bought.

Underwriter

Someone who assesses an insurance risk and decides the correct premium to charge for insuring that risk.

Underwriting

Where an insurance company takes into account known facts like your age, sex and health, in order to assess the likelihood of you making a claim on the policy. Your insurance premiums are calculated on these factors.

Uninsured loss

Anything which arises from an accident that you are not insured for.

V

Voluntary excess

This is the amount of money that you have to pay in the event of needing to make a claim.

Valuables

Valuables include jewellery, photographic equipment, musical instruments and stamp and coin collections. Cover for valuables will be limited on all contents policies and will vary with the amount of cover sought and the value of the valuables.

Voluntary Driving Restriction

In return for restricting the driving of the car to certain people, insurers will reduce the premium charged.

W

Waiver of premium

A provision that sets certain conditions under which an insurance policy will be kept in full force by the company without the payment of premiums.

Written off

The term used to describe a vehicle which is a total loss i.e. beyond economic repair.

X

Y

Z