Motor Insurance Jargon Made Easy


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To help you understand the jargon associated with motor insurance we have compiled a list of commonly used Motor Insurance Terms with an explanation of what they mean.

These are general explanations only and if you have any question relating to your own policy please refer to your policy for full details of the specific Cover, Definitions, Terms & Conditions which relate to that policy.

Simply click on the relevant letter above and you will be taken to the section dealing with Terms beginning with this letter.

If you have a query please Contact Us

Act of God

The expression Act of God refers to a natural event that cannot be foreseen or predicted. Typically motor insurance policies include cover for such “Acts of God” as Lightning, Earthquake, Storm and Flood.

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Accident

An unlooked-for mishap, or an untoward event that is neither expected or designed.

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Accident Emergency Service

Provides Accident Emergency services to an insured driver involved in an accident. Services provided vary with the insurer but usually include towing of your car to a garage & provision of a courtesy car (usually Class A) for a specified period.

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Annual Premium

Is a premium due at the inception or renewal date of a policy for the next year of insurance.

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Approved Repairer

A garage or tradesman approved by an insurer  to carry out repairs to a high standard on their behalf and on behalf of their customers.

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Authorised Advisor

A Category of Intermediary authorised by the Central Bank of Ireland who recommends the most suitable product on the market for their clients irrespective of the appointments or agencies they hold.

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Bail Bond

In Spain the police are legally entitled to impound your car following an accident. A Bail Bond issued by your Insurer will enable you to secure the immediate release of your car.

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Betterment

Betterment is where you are in a better position after the claim is settled than you were in before the loss occurred. Insurers may make a deduction from the amount of the claim where such betterment occurs.

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Breakdown Assistance Services

Provides Breakdown Assistance services to an insured driver following an electrical or mechanical breakdown of your car. Services vary with each Insurer but can include on-site repair, provision of a courtesy car (usually Class A), a contribution towards the costs of onward transportation using public transport or the costs of overnight accommodation.

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Business Use

This is an option available to cover you where you are using your car in connection with your business.

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Central Bank of Ireland

The Central Bank of Ireland is the regulator in the Republic Of Ireland for Financial and Insurance services.

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Certificate of Insurance

A document which provides evidence of the existence of motor insurance as required by law.

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Claim

A claim is made when a policyholder seeks payment or reimbursement for loss or damage and cover for their liability for injury or damage to others under the Terms of a policy.

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Comprehensive Insurance

Comprehensive insurance provides cover for accidental loss or damage to your car in addition to Third Party liability. Additional benefits are also usually provided such as Breakdown Assistance or the provision of a courtesy car. Check your policy for full details.

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Condition

All policies contain conditions which must be complied with by the policyholder such as the the duty to take reasonable care to protect the insured property, or to report claims promptly to your insurer. You should familiarise yourself and comply with all the conditions of your policy.

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Consequential Loss

Monetary loss following an occurrence of material damage.

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Damage

Physical harm directly caused by a peril insured by your policy such as an accident, Fire or Theft.

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Driving Other Cars

Usually provides Third Party cover only for the policyholder only while driving other cars not owned by or hired to the policyholder or their employer under a hire purchase agreement. This cover varies from Insurer to Insurer so check your policy. Some Insurers do not provide this cover and other Insurers offer comprehensive cover in limited circumstances.

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Endorsement

An endorsement is a document that legally records an alteration to a policy.

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Exception or Exclusion

All policies contain exceptions or exclusions.  Familiarise yourself with the exceptions or exclusions on your policy as it is possible to delete some exceptions or exclusions for an additional charge.

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Excess

An excess on a motor insurance policy is the amount of money that your insurer will deduct from any claim which you make under the policy.  The amount of such excesses vary from insurer to insurer.

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Financial Services Ombudsman

The Ombudsman is a statutory body set up to deal with complaints from consumers relating to businesses providing financial services.  The Financial Services Ombudsman is located on the Third Floor, Lincoln House, Lincoln Place, Dublin 2 and can be contacted at 1890 88 20 90.

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Fire Brigade Charges

Covers you for Local Authority fire brigade charges for a fixed amount which will vary with each Insurer for extinguishing a fire in your car or removing occupants following an accident using cutting equipment.

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Geographical Limits

The Georgraphical area is the area in which you are insured to drive your car and usually includes the Republic of Ireland, Northern Ireland and UK including cover for driving in certain European countries. This cover varies from Insurer to Insurer so check your policy. Some Insurance Companies may also stipulate that you must contact them in advance if you are planning to travel in a country outside the territorial limits of the policy to ensure the levels of protection provided are maintained whilst you are abroad.

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Government levy

An Irish Government tax and levy imposed on most non life insurance premiums.

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Indemnity

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

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Insured

The person covered by an insurance policy, also known as the policyholder

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Insured Car

This is the motor vehicle insured by the policy details of which have been provided to the Insurer who have issued a Certificate of Motor Insurance for the period of insurance.

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Insurable Interest

A person has an insurable interest in something when loss-of or damage-to that thing would cause the person to suffer a financial or other kind of loss. Typically, insurable interest is established by ownership, possession, or direct relationship. For example, people have insurable interests in their own homes and vehicles, but not in their neighbors homes and vehicles.

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Insurance Broker

Is an independent intermediary who seeks the best value for their clients and arranges policies with several insurance companies.

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Legal Fees

Usually Insurers cover solicitors’ fees and other costs of defending claims from Third Parties arising out of the use of an insured car and incurred with their written agreement. Check your policy for full details.

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Liability

Legal responsibility for causing loss, damage or injury to someone else.

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Loss Assessor

An independent professional appointed by the Insurer to negotiate settlement of a claim on their behalf. The Loss Adjustors Fees are paid by the Insurer.

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Market Value

The amount you would get for the sale of your car in the open market.

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Material fact

Information that would influence an insurer on whether to accept the insurance or the level of premium they would charge. Failure to disclose a material fact such as a claim could invalidate a policy.

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Medical Expenses

Usually covers the policyholder and any occupant of the car for medical expenses for a fixed amount which will vary with each Insurer and incurred in respect of bodily injury directly as a result of an accident involving an insured car.

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No claims bonus

An annual discount allowed when there are no claims on the policy.

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No claims bonus protection

Most insurance companies have two levels of bonus protection Step Back and Protected.

In the case of a Step Back Bonus where you make a claim on your policy your no claims bonus will be reduced in part only.

In the case of a Protected Bonus where you make a claim on your policy your no claims bonus will not be affected.

Both types of bonus protection will vary from policy to policy so check your policy for full details.

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Open Driving Option

An Open driving option in a policy covers any driver to drive the insured vehicle usually limited to certain age groups and licence types.

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Peril

A named event that can cause loss or damage such as a Fire, Theft or an Accident.

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Period of Insurance

The period shown on Your Schedule and any subsequent period for which your Insurer accepts a renewal premium.

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Personal accident

Covers fixed benefits payable if the insured person is injured as a result of an accident. Policies usually provide lump sum payments for death or permanent injury and a weekly income for temporary incapacity.

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Personal effects

This covers loss or damage to personal effects such as clothing and cameras while in the insured car up to a fixed limit which will vary from Insurer to Insurer. Usually such property must be locked in the boot or glove compartment for cover to apply. Check your policy for full details.

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Policy

The document that contains the contract between an insurer and a policyholder.

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Policyholder

The person to whom an Insurer issues a policy and who is normally the beneficiary.

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Premium

The amount a customer has to pay in return for insurance cover.

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Proposer

A person making a proposal to an insurer to arrange an insurance policy.

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Proximate Cause

The immediate or effective cause of loss or damage though not necessarily closest in time.

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Renewal Notice

Notices sent to policyholders inviting them to renew their policies for a further period at a stated premium.

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Replacement as New

Where your car is written off or stolen and not recovered some Insurers replace your car with a new one, with no deduction for wear and tear usually only when the car is less than a year old and with a mileage of not more than 15,000 kilometres. Check your policy for details.

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Replacement locks cover

Some Insurers cover the cost of replacing car locks, car keys, key cards and lock transmitters or similar devices following theft of keys from your home or temporary residence for a fixed amount. Check your policy for full details.

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Schedule

A typed section inserted in a policy containing the policyholder’s unique details including cover options chosen and other terms and conditions.

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Social, Domestic and Pleasure Use

Most motor policies restrict driving of the vehicle to use for social, domestic and pleasure purposes or private use. If you use your car in connection with your business you must arrange business use cover. Commuting to and from work is usually regarded as private use. Check your policy for full details.

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Sum Insured

The sum insured on your car should usually be based on the current market value which is usually the most your insurer will pay under a policy. See Replacement as New above.

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Third Party

A Third Party usually refers to the other person or party involved in an accident or claim.

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Third Party Only Insurance

This level of cover insures the policyholder only for their liability for injury to other people including passengers or damage to their property.

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Total Loss

A loss of the subject matter of an insurance policy to the extent that it is totally destroyed or damaged beyond economic repair.

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Trailer Cover

All Insurers provide third party cover only for any attached trailer.  Some Insurers include third party cover for detached trailers subject to limitations usually related to carrying capacity and type of trailer. Some Insurers will offer an option to cover trailers for the same cover as provided by the policy e.g. comprehensive for an additional premium. Check your policy for full details.

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Utmost Good Faith

When taking out a car insurance policy the duty of Utmost Good Faith requires the Proposer you to tell an Insurer about any fact that could affect an Insurers decision to provide insurance cover or the level of premium to be charged.

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Warranty

A policy condition, which, if not complied with, invalidates the policy cover.

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Windscreen Cover 

Covers the cost of replacing or repairing broken or cracked windscreens including glass in windows or roofs and usully consequent damage to the bodywork of the car. Check your policy for full details.

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