Advanced Driving Test – This is a test that assesses your ability to drive at a better and higher standard than the normal driving test, and can be taken when you have a full driving license. Some insurers will give you cheaper premiums if you have passed this test.
Breakdown Cover – If your car stops working and you need it to be recovered, such as towed to a garage or fixed at the roadside, then this is the cover which you will need. It’s different to car insurance, although sometimes packaged with it. Some telematics policies include it.
Curfew – Some telematics insurance policies limit your driving at certain times. With a full curfew you are banned from driving at those times and doing so will likely lead to your insurance policy being cancelled. With other policies you will still be insured, but at a substantially higher rate or with a ‘fine’. If your telematics policy has a curfew then it’s best not to drive during that time unless there is a life threatening emergency reason to do so.
Comprehensive – Generally all telematics policies will fit into this group of insurance policies. It means that not only will the insurer pay out for damage to other vehicles, but it will also cover damage to your car, and things like fire and theft. Other types of insurance include Third Party, and Thirty Party, Fire and Theft.
Dashboard – Telematics insurance policies generally come with an online web portal for tracking your driving and giving you messages about how to improve your driving to keep your current premiums. If you’re on a policy where you pay by miles you can buy more milage or request refunds from the dashboard. Some allow you to see where you drive on a map, and may even give you recommendations for different routes to take in future.
Direct Debit – Payment at regular intervals rather than upfront. Sometimes direct debit insurance is set at a fixed amount per month, but with some telematics insurance policies it will change depending on your driving. Typically paying by direct debit is more expensive than paying up front as it is similar to taking out a loan on your insurance premiums.
Excess – The amount you’ll pay if you need to make a claim on the insurance. The higher the excess the cheaper your insurance premiums will be, as the costs for the insurers go down and you have an added incentive to avoid bad driving.
Geographic limits – Some insurance policies won’t insure you in certain places, especially if you drive your car abroad. With telematics policies it’s vitally important you respect these limits as your insurer will know if you break them from the GPS device in the telematics box.
GPS – Stands for Global Positioning System, basically the way that your telematics device or any other electronic equipment tracks your location. GPS is also found in smartphones and Sat Nav devices. It relies on a network of satellites to find your exact location – at least three are needed, but it’s very rare that you’ll be driving somewhere where your location can’t be determined. Telematics insurance policies use GPS to track how far you drive and where you drive for pricing your premium.
Insurance Groups – Cars are rated into groups by insurance companies. Factors such as how powerful they are and how safe they are affect which group they are placed in. If you choose a car with lots of safety features with a small motor you’ll typically be buying one in a cheaper insurance group.
Insurance Premium Tax – A levy or charge places on car insurance policies, as well as other types of insurance, that you pay as part of the insurance to the government. Is similar to Value Added Tax on products you buy, but the rate is different and it’s just for insurance policies.
No Claims Bonus – Cheaper premiums for those who haven’t claimed on their insurance. Sometimes this can be ‘protected’ so you can still claim and keep the bonus.
Premiums – The amount you pay to be insured. Telematics policies often work differently to standard insurance policies – with standard policies the premiums are fixed and you usually pay up front unless you go for a direct debit option, with telematics policies premiums can change based on factors such as how much you drive, how you drive and where you drive. Each policy has different ways of calculating premiums and it’s important to select the best type for your driving if you want the cheapest insurance.
Privacy – How insurers keep your data safe so only those who need to see it do so. This is important as you don’t want criminals to be able to hack into your data and follow you, it also stops your family knowing about your secret trips to eat at a unhealthy fast food joint at lunchtime. All insurance policies will state how they keep your data safe.
Roadside Recovery – See breakdown cover
Settlement – The final decision of the insurer to either pay out, and if so what amount, or the decision to reject a claim. A typical example would be £800 if an insurer accepted your claim and then assessed the payout at this rate.
Social, Domestic and Pleasure – This is one type of car insurance that means your car can not be used for work purposes, including the commute. If you have this insurance it means the car is for trips to the shops, seeing friends and family and taking holidays in.
Telematics Device – The ‘Black Box’ which sits in your car and monitors your driving. Typically the device will be located under the bonnet and will need to be fitted by a qualified engineer. The devices record data from your car and transmit it to the insurance company, who will typically also allow you to see the data.
Third Party Insurance – Covers only the damage done to another vehicle or person or property when you are at fault in an accident. This used to be cheaper, but in recent years it has become less of a good deal and most telematics policies won’t offer this.
Third Party, Fire and Theft – Covers damage to other cars and property when you are at fault, as well as your car if it catches fire or is stolen. Unlike comprehensive insurance it doesn’t cover damage to your vehicle in a crash where you are at fault. Prices have gone up for this type of insurance, and often comprehensive is as cheap now.
Windscreen Cover – Insurance policy that will pay out for a new windscreen or repair to your current windscreen if it is damaged or broken, for instance from road chips. Some telematics insurance policies include this, but you can always purchase it elsewhere if they don’t.
