What words mean: Your guide to insurance jargon

Written by Zego

Published on

The insurance industry has a reputation for using complicated language. From unusual acronyms to technical terms, these complex words can easily confuse customers.

We think it’s time to make things a little clearer. So, in alphabetical order, here’s a list of the most common insurance jargon words and what they mean.

Accessories (or accessory)

Any additional spares or parts designed specifically for your vehicle, including things like electrical cables.


An incident involving your vehicle. The legal defitinion is a single, unexpected, unforeseen and unintentional event involving a vehicle, that results either in bodily injury to the driver and/or a third party, or damage to property.

Approved repairer

A repairer approved by us and authorised to repair your vehicle following a claim.

Audio, communication, navigation and telematics equipment

Your vehicle’s original audio and visual equipment and components, fitted by the manufacturer, including taxi meters and two-way radios (excluding mobile phones, cassettes, tapes, discs, MP3  players, or iPads and tablets), plus any telematics hardware fitted within the vehicle.

Certificate of motor insurance

A legal document showing evidence of your insurance. It shows the vehicles that are insured, who can drive them, and what they may be used for.

Commercial use

To use a vehicle for your trade, business, craft or profession. This does not include commuting between your home and place of work.

Credit hire

If you’re involved in an accident and the other driver’s car is damaged, this is the amount needed to pay for their replacement vehicle.


Any extra or alternative wording that changes the terms of the policy (which we’ll always tell you about). Any endorsements which may apply will be shown in the policy schedule.


The amount you’ll need to pay towards the first part of your claim.


This is a measure of the potential risk faced by an insurance company. For example, an insured vehicle is an exposure.


The windscreen or windows of a vehicle, but excluding sunroofs, panoramic windows, folding windscreens, glass roofs, or lights and reflectors.

Hazardous goods

Any goods which are defined within the International Carriage of Dangerous goods by Road (ADR) agreement.

Hire and reward

Using a vehicle to legally carry passengers or goods in return for payment. The payment can be received directly or indirectly (for example, through a ride-hailing or delivery app), and the work can take place on a full-time, part-time, self-employed, or contractor basis.


In insurance terms, this is an agreement between you and your insurer. It usually states that you’ll be compensated if you suffer any damages or losses in an incident.


The legal process of investigating a disputed insurance or liability claim. Insurance litigation is dealt with in the civil claims court.

Market value

The cost of replacing a vehicle with one of the same make and model, taking into account its age, mileage and condition at the time of loss or damage.

Named driver

Another person who you've allowed to drive your vehicle. Any named drivers will appear on your policy schedule and certificate of motor insurance.

Period of insurance

The period of time covered by your insurance policy.

Policy booklet

The document you'll receive when you take out an insurance policy, which sets out in detail the terms, conditions and limitations of your cover.

Policy schedule

Another document you'll receive when you take out insurance, which explains the cover, excess and any endorsements that apply to your policy. It will also state the vehicles being insured, how much the premium is, and the period of your insurance cover.


The person insured by an insurance provider, and named on the policy schedule and certificate of motor insurance.


This is the amount you pay for your policy, including any taxes.

Private hire

The use of a vehicle for carrying passengers in return for payment, where the  vehicle is pre-booked for a specific journey or duration.

Public hire

The use of a vehicle for carrying passengers in return for payment, however the vehicle can be hailed at any time, without any pre-booking arrangements.


An insurer who covers the risk of exposure for another insurer. For example, an insurance provider might cover its own claims up to £1m. The reinsurer will cover anything above £1m. There will usually be a cap on the exposure, which could also be shared by other insurers.

Road Traffic Act

The acts, laws and regulations that cover driving or the use of vehicles in the UK.

Social, domestic and pleasure

Using a vehicle for personal and social driving only, not for any kind of business use. These types of policies can also include commuting to or from a place of work.

Third party

Any other person (driver, passenger or pedestrian) directly involved in an accident with your vehicle.