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The more you know about the words used in a car insurance policy, the more you understand it.  Here are the often used terms when taking out a car insurance policy.

Motor Premiums
Car insurance premiums, or the amount you shell out to insure your car, are determined by a number of factors.  These factors include the car’s make and model, how old the car is, the driver’s gender, age, occupation, and the history of claims of the one applying for the insurance.  Knowing how your motor premiums are determined can help you save money and ensure that you are not paying too much for your coverage.

Excess amount
The excess amount, which is also known as the deductible, is the amount that the insured would have to shoulder when you make a claim against your insurance policy.  For example, if you opt for a $500 deductible and you have a claim for $3,000, you would have to pay for the $500 and the insurance company will take care of the remaining $2,500.

The excess amount may be determined by a number of factors depending on the insurance company.  Usually, inexperienced drivers who have just learned how to drive or younger drivers may be expected to pay for a higher excess.  An insurance company, for instance, that normally requires a $500 excess amount will want to charge $2,000 for inexperienced drivers under 26.  Either that or charge an extra $1,000 for drivers who have been driving for less than two years.

Other insurance companies may let you dictate the excess amount.  If you opt for a higher excess, you will pay for a lower premium.

No Claim Discount
The no claim discount is also known as no claim entitlement or no claim bonus.  This is an incentive wherein people who have not made any claims against their car insurance can get a discount on their premiums.

If you have not been in an accident or have not made a claim on your existing policy, you can significantly reduce you car insurance premiums.  For instance, if your insurance company gives you a 20% no claims discount, you can reduce your premiums payment by the same percentage when you renew your policy.  What is more, the longer you go without any claims, the higher your discount will be – as high as up to 50%.

No Claim Discount (NCD) Protector
The no claim discount protector allows you to retain your NCD even if you make a claim within the year.

Windscreen Damage
Most insurance companies give you windscreen cover for free, but may charge $100 for each claim made.

Personal Accident Cover
Personal accident cover may be applied for you or your passengers as a component of your insurance package.

Repair Options
Some insurance companies limit the shops where you could take your car for repairs. While most allow you to have your car repaired at your preferred shops, you could save money by allowing them to have repair restrictions through only authorised workshops put into your plan.

Courtesy Car (Replacement car or Loss of Use)
There are insurance companies that allow you to have a courtesy car while your car in under repair.  This is especially useful when you use your car daily or for business, and usually have some provisions to help you save money just in case you have to do without your car.

Towing and Roadside Assistance
Check if your insurance company includes roadside assistance or towing services with your car insurance policy.