If you’ve ever shopped around for car insurance or are in the process of doing so, chances are you’ve come across an array of terms that you may not be 100% familiar with.
Though you may be tempted to skim past them, each of these terms plays a critical role in explaining how your car insurance policy works and what you are covered for. Therefore, whether you’re obtaining a quote or trying to make sense of your PDS (Policy Disclosure Statement), familiarise yourself with the following popular car insurance terms and their meanings.
Accessories - Extra items added to the car before it was delivered new to its first owner, as well as items added to the car by anyone at any time after it was delivered new to its first owner.
Accident / accidental / accidentally - An unforeseen, unintended, and unexpected event, which occurs suddenly and at a specific place and time.
Agreed value - The amount shown on your policy schedule, which we agree to insure the car for at the time of loss. The agreed value includes any after factory or non-standard accessories that may be fitted to the car.
Breakdown - A mechanical or electrical fault which has caused the vehicle to become immobilised and/or unsafe to drive. Breakdown can also include a flat tyre, flat or faulty battery, a vehicle which has run out of fuel or keys that are lost or locked inside the vehicle.
Comprehensive cover - The car on the policy schedule is covered for the events listed under Insured Events and, where relevant, also under Extra Cover. Events under Optional Cover are covered if you selected them and they are noted on your policy schedule.
Contract period - The period, including the time and date, from the start or renewal of your policy to its expiry.
Excess - The first amount you must pay in relation to each and every claim made under your policy.
Insured event - An event for which you can make a claim under your policy.
Insured value - Either the market or agreed value as shown on your policy schedule.
Market value - The reasonable and expected cost of replacing the car with a car of the same or a similar make, model, mileage and condition before an insured event for which you claim. Market value does not include any warranty costs, future stamp duty, transfer fees or allowance for dealer profit. Market value includes an allowance for after factory or non-standard accessories up to the amount noted on your policy schedule for After Market Accessories
Modifications - All changes from the manufacturer’s specifications, made to the car at any time after it left the factory where it was built.
Roadworthy condition - The car complies with the roadworthy requirements for the Australian State or Territory where it is registered.
Third party - Any person involved in an accident with the car, excluding the driver or passengers of the car.
Third Party Property Only cover - The car on the policy schedule is covered for damage to other vehicles and property as defined under Extra Cover: Legal Liability. This cover excludes damage caused to the car insured on this policy other than what is described under Extra Cover: Uninsured Third Party.
Third Party, Fire and Theft cover - Cover for Third Party Property Only plus the Insured Events; Fire, Theft and Earthquake. It also includes Extra Cover for Towing Costs and Emergency Accommodation, Transport and Repairs.
Total loss - When the insured car is damaged to the extent that we decide it is not economical or safe to repair, or it is stolen and not recovered.
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