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Have you ever sat across from your car insurance agent wondering what everything said meant? Wondering why you need certain types of coverage, how it affects what you’re paying and why you’re paying for different options / add-ons…


You are not alone.

We have been through this frustration too and have put this together to help us all drivers to get to know the ones explained below to make a better decision when you review your car insurance policy.

On understanding of these terms, you will know if you have enough coverage, the right policy for your needs, or if you’re getting a good deal.

And if you find you’re not getting a good deal, you can compare car insurance quotes to get the best rates from top insurance companies.

1. No Claim Discount (NCD)

NCD stands for No-Claim Discount. This is a discount offered by car insurers for those car owners who have not made any claims within a year or more. The longer the car owners do not make any claims, the better the discount they may be eligible for.

The No-Claim Discount or NCD is meant to reduce the premium that car owners will have to pay the following year with regards to their car insurance plan. This way, the insurers will be able to recognize those car owners who have been pretty careful on the roads. The table as shown below illustrates more about how the car insurers out there determine the NCD.

NCD-table.png

Every year, if no claim made against your car insurance, you will be entitled 10% premium discount (accumulated up to a maximum of 50%) for your car insurance. This discount will take effect on your next policy year. If you are a named driver on somebody else policy you will not receive a NCD discount. 
 

2. Main driver

This is the person who drives the vehicle most often and earns a NCD.

3. Named driver


Named driver are additional drivers you declare on your policy who frequently drive your vehicle.

4. Authorised driver

Authorized driver is anyone you give permission to drive your vehicle but who is not declare in your car insurance. A named driver shares the same excess as you whereas an authorised driver receives higher excess. 
 
This though could vary from insurer to insurer. 

5. Excess

Excess (also called a ‘deductible’) is the money you pay out of your own pocket before an insurance company covers the rest of a claim. How much you pay depends on the policy and the company. Usually, though, car insurance deductibles are between $0 and $1,500.

Keep in mind that deductibles and premiums are related. A high deductible means a low premium. Also, a low deductible means a high premium. To put it another way, a high deductible can save you money every month. You’ll have a big bill to pay, though, if you file a claim.

6. Waiver of Excess

Some insurers will pay your standard excess when your car is being repaired at one of their authorized workshops. You can check if the Insurer has this benefit under the chapter “own damage” under the name “waiver of excess”.  
 

7. Young and Inexperience Driver Excess


This is someone who is below a certain age (determine by the insurance company) and/or has less than 2 years of driving experience. Young and inexperience drivers normally pay an additional excess on top of the standard excess (this varies from insurance companies) in the event of an accident claim. 
 


8. Comprehensive cover

This offers the widest coverage in terms of repair or replacement of your vehicle if it gets damaged or lost as a result of accident, vandalism, theft or weather-related damage. It also covers accidental loss or damage to your vehicle, and most of the time all its accessories and spare parts and lastly It also covers liability claims from third parties. A comprehensive cover is mandatory when you finance your car if you are financing your car.

9. Third Party, Fire and Theft Cover

This covers injury and damage caused by your vehicle to someone else’s vehicle or property. It also covers your vehicle if it’s stolen or damaged by fire.
 


10. Third Party Cover

This covers liability from third parties for damage and injury to their vehicle or property caused by your vehicle. Your own damage when you are at fault due to an accident is not covered.


11. Premium

This is the amount you pay to an insurer so it will provide coverage and pay claims.