Insurance terminology can be very confusing. Like all industries insurance has its own language and ordinary people often find it difficult to follow. Set out below are some of the more common pieces of car insurance jargon together with an explanation of what they mean.    

Act of God
  An event not caused directly by an individual that causes damage to your vehicle. An example (albeit an unlikely one) would be a meteor strike. More often than not acts of God are uninsurable  

Agent
  A person or company which acts as an intermediary between an insurance provider and the consumer or end user      

Aggravated theft
  The forcible and violent theft or attempted theft of your vehicle while you or your spouse are inside it  

Average
  The term applied in circumstances where an item is insured for less than its market value and the insurance company scales down any payout in an amount proportionate to the difference between the sum insured and the market value. Unusual in the context of car insurance  

Betterment
  The payment by the insured party (ie you) towards a claim in recognition of the fact that the vehicle will be worth more following repairs pursuant to an insurance claim than it was beforehand  

Broker
  A company authorised to solicit insurance business from consumers and act as agent on their behalf in obtaining insurance cover from an insurance company.   

Car
  The insured vehicle but also, usually, accessories such as child car seats, spare parts, in car audio equipment and electronic navigation equipment permanently fitted to the vehicle      

Certificate of Insurance
  The certificate that evidences the fact that you have taken out insurance on your vehicle  

Claim
  A formal application by the insured party to recover damage from the insurance company under the policy  

Commission
  A fee paid to an intermediary by an insurance company for promoting the sale by that intermediary of its insurance products. In most instances you - the consumer - have a legal right to know what commissions have been paid to an intermediary if you purchase cover through one. Some intermediaries, however, go to considerable lengths to hide what they have been paid  

Comprehensive Insurance
  Insurance giving the policy holder the maximum cover available  

Cover note
  The document sent to the policy holder while the certificate of insurance is being finalised. Thus a temporary (but legal) document evidencing the fact that you have taken out insurance on your vehicle  

Endorsement
  An amendment to the insurance policy. Not to be confused with an endorsement on your license  

Excess 
  The amount that you - the policy holder - have to pay before the insurance company will make a contribution towards a claim  

Exclusion
  An event or circumstance in which the insurance company is not obliged to pay out under the policy  

Ex gratia payment
  A payment made by an insurance company to a policy holder that it is not obliged to make under the terms of the policy. Therefore a gesture of goodwill. You are unlikely to come across too many of these!  

Green card
    The document that evidences the fact that you have the minimum acceptable level of insurance cover while driving in a foreign country. Not normally required in the EU but essential outside the EU. In any event always consult your insurance company before driving abroad to be on the safe side  

Insurable interest
  One of the most important concepts of insurance. The principle which states that you can only insure something if you can demonstrate that you will suffer financial loss if it is damaged, stolen or destroyed  

Insurance company
  A company whose business it is to take on insurance risk. In the UK all insurance companies are now regulated by the Financial Services Authority  

Insurance Premium Tax
  A tax levied on nearly all non life insurance policies including car insurance policies payable by the policy holder  

Intermediary
  A person or company which acts as an agent between the insurance company and the consumer in return for a commission  

Loss adjustor
  An individual or company  - notionally independent of the insurance company - who assesses the amount of a claim and intermediates between the policy holder and the insurance company. We say 'notionally' because the loss adjustor's fees tend to be paid by the insurance company........from which you can draw your own conclusions  

Loss assessor
  Similar to a loss adjustor except paid for by the policy holder not the insurance company  

Market value
  The market value of a vehicle of similar age and in similar condition at the time of  accident or loss   

Mutual
  An insurance company owned by its members. Becoming rarer and rarer.  

No claims discount (or bonus)
  The discount from 'standard' rates applied to the renewal premium for a policy holder who has not made a claim within a specified period of time  

Physical assault
  An intentional violent act committed by another person that causes death or serious bodily injury  

Policy 
  The contract or document between the insurance company and the policy holder that sets out the legal rights and obligations of each party  

Premium
  The amount paid by the policy holder for insurance  

Renewal notice
  The notice sent by the insurance company to the policy holder inviting him/her to renew the policy  

Sum insured
  The total amount for which the vehicle is insured  

Third party
  A party involved in the claim who is neither the policy holder nor the insurance company  

Underinsurance
  The amount by which the vehicle is underinsured. Unusual in the context of car insurance  

Utmost good Faith
  The insurance principle that requires the policy holder to provide all relevant information to the insurance company in good faith  

Write Off
  A vehicle which is either, in the view of the insurance company, not capable of being repaired or which would cost more to repair than to replace