The temporary cover provider InsureDaily has shared the meanings behind three of the most confusing terms used by insurance companies.
With the cost of car insurance rising over recent months, many drivers are looking into making changes to help save money, meaning some will be encountering words they may not understand.
Paul Daly, Director of InsureDaily, urged drivers not to be detered by any terms that confuse them, recommending they reach out to their insurer for explanations.
He explained: “The complex terminology surrounding motor insurance often acts as a roadblock for many policyholders. However, understanding these terms is crucial for knowing your rights, responsibilities, and the extent of your coverage.
“But remember, you’re not alone on this journey. If you find yourself struggling to navigate the maze of motor insurance jargon, don’t hesitate to contact your provider so that they can help you understand your policy in further detail.”
According to InsureDaily, one of the most confusing car insurance terms for many is ‘excess’, which is often a necessary part of a policy.
An excess is the amount of money the driver agrees to pay to the insurer for them to make a claim. For example, if a motorist wishes to make a claim of £1,000 and they have a £200 excess, they would receive £800 from their insurer.
In the majority of cases, insurers will have a mandatory excess that cannot be changed, and a voluntary excess, which is a figure the driver can set themselves.
The company also highlighted the meaning behind underwriter, a member of staff at an insurance firm who could help to determine how much motorists pay for cover.
An underwriter assesses how much of a risk it would be to insure a certain motorist based on their no claims bonus, driving history and profession.
They will also look in the type of vehicle the driver will use, taking factors like the mileage they will cover, power and durability.
Finally, InsureDaily also shared the meaning behind indemnity, a term that motorists may encounter when they are trying to make a claim.
Having indemnity means that insurance companies promise to put drivers back into the same financial position that they were previously in after they make a claim.
This could mean that the company would pay for any repairs that need to be made to the vehicle or, if any damage is too severe or expensive to fix, replace it with a like-for-like model.
