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Key terms explained

Key terms explained

Sometimes the world of insurance can feel like it’s full of jargon. But by understanding the key terms you can make better choices about the type of policy you might need.

What's an excess?

The excess is the amount you have to pay towards any claim. For example, if you choose an excess of £50 and then make a claim for £500, the insurer will pay out £450. 

Some insurers will lower your premium if you accept a bigger excess. You might find that different excesses will be set for different types of claims. Check your policy to make sure.

What's a No Claim Discount?

A No Claim Discount rewards you for not making a claim on your policy. Normally, for every year you don’t make a claim the insurer will reduce the premium you pay. No Claim Discounts range from one to five years.

Once you have reached five years of not making a claim, the insurer may give you the chance to protect your No Claim Discount by paying an extra premium. So you’ll now be able to make a claim without losing your No Claim Discount.

What's the 'cooling off period'?

All insurance companies are legally obliged to provide you with a cooling off period. This is the initial 14 days after you first take out your policy, when you can decide to cancel your policy and receive all your money back.

After the first 14 days you can still cancel, but you might not get a full refund for the days of cover you haven’t used yet.

Keeping costs down