Car Insurance top tips

A

Additional drivers - These are other people (such as family members) who are listed on an insurance policy in addition to the policy holder. This enables them to be insured to drive the car that is on the policy.

Back to top

B

Business use - This provides cover for commuting to an alternative location with your current employer on a pre-arranged basis.

Back to top

C

Comprehensive cover - This is the highest level of insurance cover for your car. It covers damage caused to your vehicle in an accident (whether it's your fault or not), damage caused by fire, theft or a break-in. It also covers damage to other vehicles or property which may have been involved in an accident with you.

Back to top

D

Disabilities or medical conditions - Car insurance companies need to know if you suffer from any disabilities or medical conditions that may restrict or impact your driving. The law states that any disabilities or medical conditions must be disclosed to the Driver and Vehicle Licensing Agency (DVLA) (opens in new window) e.g. epilepsy or diabetes. This is so that appropriate licensing restrictions can be imposed.

Driving other cars - Some Insurers, including Equity Red Star, the provider of first direct's Car Insurance, may automatically allow the policy holder to drive another car (a car not listed on your insurance policy, but which you have the owners permission to drive) on a Third Party Only basis subject to Terms and Conditions. Insurers may limit availability on this cover depending on factors such as driver age and occupation so please check the Terms of your policy carefully.

DVLA - The Driver and Vehicle Licensing Agency(opens in new window) is an executive agency of the Department of Transport. They oversee aspects of driving such as licences and road fund licence.

Back to top

E

Excess - This is the amount payable to your insurer in the event that you make a claim. The total excess you pay is comprised of compulsory excess (the amount of excess your insurer insists on based on your circumstances) and voluntary excess (any excess you agree to pay in addition to the compulsory). Typically, increasing your excess will reduce your premium. In the event your vehicle is fixed by an approved repairer after an accident, you will pay your excess to the repairer when you collect your vehicle.

Back to top

F

Foreign use - If, like first direct's Car Insurance policy, your policy includes 'Foreign use' it means you will be able to use the vehicle within the European Union and selected other countries. Check the details though as conditions and exclusions can apply depending on your insurer.

Back to top

G

Glass damage - This is where the windscreen or any other windows on your vehicle are smashed, cracked or chipped. Most insurers will have a separate excess for glass damage which is usually lower than when you claim for accidental damage.

Back to top

H

Hiring - Hiring refers to when you let your vehicle out in return for payment. Most private car insurance policies, including first direct's Car Insurance policy will not allow hiring. If you plan to do this you may require a specialist policy so ensure you speak to your insurer before doing so.

Back to top

I

Insurer - The Company who underwrite/provide the insurance cover and accept the risk. An insurer would pay out in the event of a successful claim. When you apply for a quote many companies act as introducers or intermediaries that may search through the best quotes from a panel of insurers. first direct use only one insurer, Equity Red Star and they underwrite all first direct Car Insurance policies.

Immobiliser - This is an electronic or mechanical device that prevents the engine from being started. In an attempt to increase security on their vehicles, most car manufacturers fit an immobiliser to new cars. If you're unsure whether your car has a device or not, always refer to the vehicle handbook.

Insurance group - This is one of the main factors that determine how much you pay for your policy. When a car is launched, the ABI (Association of British Insurers) allocate it an Insurance group, which takes into account things such as the value, performance and the level of security it has. Typically, the more expensive and desirable the vehicle, the higher the group.

Insurance Premium Tax (IPT) - This is a tax levied by the Government on insurance premiums (what you pay to insure your car). Insurers will automatically include IPT in the total price being offered when you obtain a quotation or if you make a change to your policy that requires an additional payment.

Back to top

J

Jargon - The insurance Terms listed on this page that sound complicated but should be easier to understand now!

Back to top

K

Key Facts Document - This is a document that all insurers will provide when you buy a car insurance policy. It summarises some of the important facts about your policy so you know exactly what it covers you for. You should still refer to your insurance policy documentation for full Terms of your policy.

Back to top

L

Liability - This means you're legally responsible for causing loss to someone either because you've damaged something that belongs to them, or because you've injured them.

Back to top

M

Modifications - A modification will normally alter a car's appearance or performance over and above the standard specification it had from new. This may include larger alloy wheels, upgraded stereo system or tinted windows. This could lead to an increase in your premium.

Back to top

N

No claims bonus - Insurers will usually provide a discount for drivers who haven't made a claim during a full year of insurance. The more years you haven't made a claim, the higher the no claims bonus you build and the bigger the discounts insurers will provide. A no claims bonus can only be used on one vehicle at a time.

Back to top

O

Optional extras - Usually for an additional cost per product, most insurers will offer optional extras which are enhancements to their standard insurance cover. Visit our optional extras section to find out which extras are available with first direct Car Insurance e.g legal expenses, breakdown cover.

Back to top

P

Protected no claims bonus - If you have a no claims bonus but then make a claim you will lose some, or all of your, no claims bonus. For an additional charge most insurers offer you the chance to protect your no claims bonus so if you make a claim you won't lose the no claims bonus you have built up. Some insurers will allow only a certain numbers of claims under the protection so check the details carefully. first direct's Car Insurance policy allows one fault claim in every policy year.

Back to top

Q

Quote - This is the process of establishing the amount an insurer intends to charge you for your policy. This will be based on the information you've provided so always ensure the details used are correct for your circumstances.

Back to top

R

Rating factors - These are used by Underwriters to work out the price you pay for your car insurance. They will typically look at your age, vehicle type, vehicle value, post code, claims history and convictions, amongst other things, to determine the likelihood of you making a claim.

Back to top

S

Social, Domestic and Pleasure (SDP) - This is a term used to describe the way in which you intend to use the car that is being insured. Social, domestic and pleasure is the basic 'day-to-day' use like driving to the shops or visiting friends. It doesn't cover journeys such as travelling to your place of work, business or study.

Social, Domestic and Pleasure including Commuting (SDP+C) - This is for social, domestic and pleasure purposes with travel to and from a single place of employment or study. It does not cover business use. You will need this cover if you drive to and from work.

Back to top

T

Third Party only - This is the lowest insurance cover and the minimal legal requirement. It only covers the 'other person'. So in the event of an accident involving another car, that was your fault, your policy would cover the repairs to their car, but not to your car. It doesn't cover your car against fire, theft or vandalism either.

Third Party Fire and Theft - The same as Third Party except that it also covers your car against fire and theft.

Tracking device - This is a security device that can trace and monitor the position of your car using GPS technology. In the event a car is stolen a tracking device significantly increases the chances of finding it again. For cars which are more desirable to thieves (higher value, high performance cars), some insurers will insist it has a tracking device fitted as a condition of the premium being offered. To find out if your car would need a tracking device as part of a first direct Car Insurance policy, call 0800 032 9401.

Back to top

U

Underwriters - An underwriter calculates your premium on behalf of an insurer and decides whether or not to accept the associated risk.

Use - All insurers will ask you how you will be using your vehicle. The basic use for your car is likely to be social, domestic and pleasure but you can extend the use to include commuting to and from a single place of work / study or to include full business use.

Back to top

V

Vehicle value - Insurers will normally ask you the current value of your car when providing a quote. We would recommend using a car valuation web site to help you determine your vehicle value. As market values are subject to change, the valuation provided is not necessarily an indication of what may be paid out in the event of a claim.

Back to top

W

Written renewal notice - This is the written invitation from your current insurer to renew your policy with them for another year.

Back to top

X

It's extremely difficult to think of a car insurance related term beginning with X. We'll keep thinking....

Back to top

Y

Young driver excess - Some Insurers, including Equity Red Star, the provider of first direct's Car Insurance, will insist on a higher excess for younger drivers as they could be seen as a higher risk. Always check your insurance documents carefully to ensure you can afford to pay the total excess that would be due in the event of a claim.

Back to top

Z

Zero no claims bonus - This is where you haven't managed to build any no claims bonus – it may be the first policy in your own name for example. However, don't be disheartened as some insurers may offer introductory discounts for a clean driving history even if you have zero no claims bonus.

Back to top