Jargon demystified

1. Excess

A technique used to bite you where it hurts just after the ceiling comes down… You have an excess of £50 on some of your policy but £250 on other parts… watch out for different excesses on different parts of your cover!

Also used to keep the price low. Go to a price comparison site (you know the ones!) and look for the lowest price… check what excess it has then go to the site… is it still the same? - Read more about how insurance companies use excess to their advantage. (link to excess page)

2. Premium

Once this used to mean the correct payment to cover your risk, now it just means price !

3. Comprehensive Cover

Comprehensive. It’s just a word… this sort of cover doesn’t cover a lot of things … “acts of God” for example, and “Riots and civil commotion”. That’s because insurance companies are not prepared to go bust just to make a point. The onus is on you to check what is covered.

Also watch out for little things like spectacles cover on your home policy or how much your stereo is covered for on your motor policy… Some companies give you a very low level of cover for this sort of thing and you need to get it right. After all, ever tried getting a new car stereo in your Merc for £35 ?

4. Continuous Authority

A good one to watch out for, this means they will just carry your policy on at renewal instead of cancelling it, so you had better tell them if you want them to stop taking your cash. A phone call should do, though, even after renewal they will still let you cancel so long as you call in the first few weeks.

5. The FSA – Financial Services Authority

The theory is the FSA are there to protect the consumer. It’s a big job though. I mean, really big! So the FSA are trying hard but you shouldn’t expect them to save you the bother of being careful on your own behalf!

6. Assumptions

Assumptions are a tactic used by many insurers to keep their headline premium low… they may “assume” you have thirty grand of contents or that your house is not near water or near a tree. They may also assume your car has never been modified and that you have never had a speeding ticket.

The thing is, they don’t expect you to accept their assumptions. You are still legally required to declare all these things to them, so you had better keep an eye out for what they assume because if you don’t correct them you will get a nasty surprise when you come to claim! (see “averaging”). (link to “The law of averages”)

7. The Loss Adjuster

This fellow may come to see you when you make a claim – his sole purpose is to keep the cost of the claim as low as possible.

These guys always know where you can buy a genuine Picasso for a fiver! Be careful not to upset one, make them tea and co-operate because it’s like having the Customs men round. You are in their hands. Read more about the Loss Adjusters. (link to page)

8. Protected NCD

Means you don’t take a step back from your full NCD if you have to make a claim. The question is:- how often do you claim and how much does it cost? It’s worth looking back over your last 10 years record to work out whether you are going to benefit.

9. Comparison Sites

These advertise on the TV and it looks perfect. You enter one quote and get 30 prices.

The trouble is, the prices often change when you click any of the links. You get to the insurer’s site and the premium goes up, up and away! So… do they live up to the hype? Not yet, says InsuranceStall!