Vocabulary
Glossary
Definitions written for newly licensed drivers of any age and the parents who insure them. Each term links back to the guides where it matters.
- Accident forgiveness
- A policy feature that prevents a first at-fault accident from raising the premium. Must be on the policy before the crash.
- Age band
- The age grouping an insurer uses to set base rates. Youth bands (16–24) carry the highest factors; most insurers step down at 19, 21 and 25.
- At-fault accident
- A crash the insurer determines you caused (wholly or mostly). At-fault accidents are surcharged; not-at-fault ones usually are not.
- Base rate
- The starting premium for a coverage in a given territory before individual factors are applied.
- Clean record
- No at-fault accidents or moving violations within the insurer's lookback period, usually three to five years.
- Collision coverage
- Pays to repair or replace your own car after a crash, minus the deductible.
- Comprehensive coverage
- Pays for non-crash damage: theft, weather, vandalism, fire, animal strikes, glass.
- Continuous coverage
- An unbroken insurance history. Lapses are a rating factor; continuous coverage earns discounts with many insurers.
- Deductible
- What you pay before collision or comprehensive pays. Higher deductibles lower the premium.
- Distant student discount
- A discount for a student living 100+ miles from home without a car, who drives only during visits.
- Good student discount
- A discount, typically 5–25%, for full-time students under 25 with about a B average.
- Household member
- A person living at the insured address. Licensed household members must be listed on or excluded from the policy.
- Inexperienced operator
- An insurer's rating classification for a driver licensed fewer than about three years, applied at any age in addition to the age factor.
- Liability limits
- The maximum your policy pays for injuries and damage you cause, written as three numbers such as 100/300/100 (in thousands).
- Multi-car discount
- A discount for insuring two or more vehicles on one policy, typically 10–20%. One reason a family policy is cheaper for a new driver than a separate one.
- Permissive use
- Coverage for someone driving your car with your permission who is not listed on the policy. Does not apply to regular drivers in the household, who must be listed.
- Premium
- The price of a policy, usually quoted per six or twelve months.
- Primary driver
- The driver an insurer assigns to a vehicle for rating—usually the one who drives it most. New drivers are often rated as occasional drivers on a family car.
- Prior insurance
- Whether you were insured before the policy starts. Some insurers rate no prior insurance as a risk factor; others ignore it for newly licensed drivers.
- Rating factor
- Any characteristic used to set a premium: age, years licensed, record, vehicle, territory, mileage, coverage choices.
- Surcharge
- A percentage added to the premium for an at-fault accident or violation, usually for three years.
- Telematics (usage-based insurance)
- Programmes that price partly on measured driving behaviour via an app or device. The fastest way for a new driver to prove careful driving.
- Uninsured/underinsured motorist coverage
- Pays for your injuries when the at-fault driver has no or too little insurance.
- Vehicle rating symbol
- A number an insurer assigns to each make/model/year from its claims history and cost, driving the collision and comprehensive premium.