A jargon-busting guide to car insurance terms
When you're taking on the world of car insurance for the first time, it can seem like everyone’s speaking a different language. Here’s our jargon-busting guide to some insurance terms.
Black box insurance, or telematics, can help young and newly qualified drivers to reduce their insurance costs. A black box is a handy device that records your driving behaviour and sends data to your insurers. If you drive carefully, it could lead to lower premiums when you renew your insurance. This might benefit new drivers, because they can be assessed on their own abilities rather than statistics based on their age and experience.
Unlike insurance, breakdown cover isn’t compulsory. But lots of drivers see it as an essential. It's really a kind of insurance. You pay a monthly or annual premium and, if you break down, a mechanic will come out and either fix your car or tow you to a garage. Some policies include breakdown cover as standard, and others offer it as an optional extra.
If you're involved in an accident, some insurance policies will pay for you to have a courtesy car so you’re not stranded without wheels while your car is repaired. It’s the type of extra cover that can bump up your premiums. But if your everyday life depends on having your own transport, the cost might be a small price to pay to avoid major disruption.
Driving Other Cars (DOC)
This is exactly as it sounds – insurance cover for driving other cars. In the past, many policies offered third party cover, which insured you to drive other people's cars. These days, DOC cover is far from standard. If you think you’ll need to get into a friend’s driving seat, speak with your insurer first.
This is the cost you’ll need to pay if you make a claim. There are two types of excess – compulsory and voluntary. The insurer sets your compulsory excess, but your voluntary excess is up to you. Remember to watch out for compulsory excesses when you compare quotes, as it can skew your comparison. And if you set a voluntary excess, be careful. A higher excess can bring monthly premiums down, but you could face a large bill if things go wrong.
This covers the cost of losing your car keys, which is all too easy to do. Replacements can be expensive, especially if it’s a high tech key and the new one needs reprogramming. O2 Drive offers key cover as standard, but other insurers might only offer it as an add-on.
This covers the costs of legal fees if you’ve had an accident that wasn’t your fault. It usually covers uninsured losses such as medical bills, taxi costs, loss of earnings and the excess payout too. It’s sometimes included with a comprehensive policy, or can be added on.
If you haven’t made an insurance claim within a certain period, normally five years or more, you might get a reduction in your insurance premiums. This is called a no-claims bonus or no-claims discount. This varies between insurers, so check what your policy offers.
Protected no-claims bonus
A protected no-claims bonus is an optional extra that means you won’t lose your no-claims bonus if you do make a claim. So you’ll pay an annual fee to avoid the risk of a bigger price hike when you renew.
O2 Drive Box on Board is our telematics cover, designed to make insurance more affordable for young drivers. It involves fitting a device that sends us data about your driving, which could get you a discount on your car insurance on renewal. Plus it gives you hints and tips to help increase your confidence.