Insurance jargon explained
Drive a car and you have to have insurance to be legal, but understanding some of the terminology isn’t always easy. Before you buy an insurance policy it’s essential that you get to grips with what’s on offer; here’s how to decipher the code. Types of cover Legally, you need only Third Party insurance which covers claims by someone if you cause an accident that damages them or their property. The next level up is Third Party, Fire and Theft (TPFT) which adds protection against fire and theft to your Third Party cover. Fully comprehensive insurance covers you for everything, even if the accident is your fault. It’s not always the most expensive, but even if it is, it’s worth the extra because of the added protection. For more on the different types of car insurance check out our recent blog. No-claims discount For each 12 months that you insure a car without making a claim, you’ll earn a year’s no-claims bonus (NCB) or no-claims discount (NCD), usually up to a maximum of five years. How much this is worth depends on the insurer, but it’s not unusual for a five-year NCD to cut your premium by 60% or more. Normally, you need to have a policy in your own name to start earning your NCD. But if you’re a named driver on someone else’s policy, some insurers allow you to build up NCD of your own, if you then take out your own insurance with the same company.