Understanding key insurance terms to help you navigate your policy
Insurance policies can be filled with complex terminology. Our comprehensive glossary explains the key terms you'll encounter when dealing with car insurance across European countries. Use the alphabet navigation below to quickly find the terms you're looking for.
The replacement cost of your vehicle minus depreciation. This is typically what insurance companies pay in the event of a total loss.
A person or entity that has an insurable interest in the vehicle but is not the main policyholder. They receive coverage under the policy but generally cannot make changes to it.
Equipment installed in a vehicle to prevent theft or assist in its recovery if stolen. Many insurers offer discounts for approved anti-theft devices.
An accident where you are deemed responsible, either fully or partially. At-fault accidents typically result in increased insurance premiums.
A system used by insurers across Europe that adjusts premiums based on driving history. "Bonus" refers to premium discounts for claim-free driving, while "Malus" refers to premium increases after claims.
Insurance that provides roadside assistance and towing if your vehicle becomes inoperable. This is particularly important when driving in unfamiliar countries.
A formal request to an insurance company for compensation for a covered loss.
Insurance that covers damage to your vehicle resulting from a collision with another vehicle or object, regardless of who is at fault.
Insurance that covers damage to your vehicle from incidents other than collisions, such as theft, vandalism, fire, or natural disasters.
The maximum amount an insurance company will pay for a covered loss. In many European countries, third-party liability coverage limits are regulated by law.
The amount you pay out of pocket before your insurance coverage kicks in. Also known as "excess" in some European countries.
The decrease in your vehicle's value over time due to age, wear and tear, and obsolescence. Insurance payouts for damaged or totaled vehicles typically account for depreciation.
A history of your driving behavior, including accidents, traffic violations, and claims. Insurance companies use this information to determine your premium.
A written amendment that modifies the coverage in your insurance policy. Also known as a "rider" or "clause."
The British and some European term for deductible - the amount you must pay toward a claim before your insurance coverage applies.
A provision in an insurance policy that eliminates coverage for certain risks, perils, properties, or locations.
Insurance that covers damage to you or your property, as opposed to third-party coverage which protects against claims made by others.
Deliberate deception to obtain an insurance benefit illegally. Insurance fraud is a crime in all European countries and can result in policy cancellation, denial of claims, and criminal prosecution.
Coverage that pays the difference between your car's actual cash value and what you still owe on your loan or lease if your vehicle is totaled.
Insurance that covers repair or replacement of your vehicle's windows and windshield. In some countries, this is included in comprehensive coverage, while in others it's a separate option.
An international certificate that proves your vehicle has the minimum insurance coverage required in visited countries. Despite its name, it's not always green - since 2021, it can be printed on white paper or presented digitally in many countries.
Swedish term for full comprehensive insurance coverage, which includes third-party liability, fire, theft, and collision damage.
Swedish term for half-comprehensive insurance, which includes third-party liability, fire, and theft, but not collision damage.
The principle that an insured party should not profit from a loss but should be restored to the same financial position they were in before the loss occurred.
The amount you pay for your insurance policy, typically on a monthly or annual basis.
The person or entity who will receive the insurance benefit in the event of a covered loss.
An insurance policy that covers multiple vehicles or drivers within the same household, often at a discounted rate compared to individual policies.
Insurance that covers damages to others for which you are legally responsible. This is mandatory in all European countries and is also known as third-party liability insurance.
A legal right to keep possession of property belonging to another person until a debt owed by that person is discharged. Lenders often place liens on financed vehicles.
The price a willing buyer would pay to a willing seller for a vehicle, neither being under any compulsion to buy or sell. Insurance payouts for total losses are typically based on market value.
Information that would influence an insurer's decision to accept a risk or determine the premium. Failing to disclose material facts can result in a policy being voided.
Organizations in European countries that compensate victims of accidents caused by uninsured or untraced drivers. Each EU country has its own bureau, though they cooperate through the Council of Bureaux.
A person specifically listed on an insurance policy as being covered when driving the insured vehicle.
A discount on insurance premiums rewarded for not making claims over a specified period. Also called a No-Claims Discount (NCD) or Bonus-Malus in some European countries.
A system where insurers pay for their own policyholders' losses, regardless of who caused the accident. Sweden operates on a "no-fault" principle for personal injuries.
An insurance policy that covers anyone who drives the insured vehicle with the owner's permission, rather than only named drivers.
An insurance model where the premium is based primarily on the actual distance driven.
An insurance model where the premium is based on monitoring actual driving behavior, such as speed, braking, and time of day driving occurs.
Coverage for medical expenses, lost wages, and other costs resulting from injuries sustained in an auto accident, regardless of fault.
The period during which an insurance policy provides coverage, typically six months or one year.
The continuation of an insurance policy for an additional term. In many European countries, insurers must notify policyholders of renewal terms in advance.
The cost to replace damaged property with a new item of similar quality without deducting for depreciation.
The possibility of loss or injury for which an insurance company provides coverage. Insurance companies assess various risk factors to determine premiums.
Coverage that provides help if your vehicle breaks down, including services like towing, battery jump-starts, flat tire changes, and fuel delivery.
A vehicle that has been declared a total loss by an insurance company, typically due to extensive damage or theft recovery. The title is branded as "salvage" to indicate its history.
The legal right of an insurance company to pursue a third party that caused a loss to the insured. This allows the insurer to recover the amount paid for a claim.
Technology that combines telecommunications and informatics to send, receive, and store information related to vehicles. Used in usage-based insurance to monitor driving behavior.
Coverage for damages or injuries you cause to others in an accident. This is typically mandatory in most European countries.
When a vehicle is damaged to the extent that repair costs would exceed the vehicle's value, or when a vehicle is stolen and not recovered within a specified time period.
The Swedish term for mandatory third-party liability insurance.
Insurance that protects you if you're in an accident with a driver who has insufficient insurance to cover your damages.
Insurance that protects you if you're in an accident with a driver who has no insurance.
A type of insurance where the cost is determined by actual usage parameters, primarily focusing on distance driven or driving behavior.
Swedish term for collision damage insurance, which covers damage to your own vehicle in an accident, regardless of fault.
The process of determining the worth or value of a vehicle for insurance purposes.
A provision that eliminates the requirement to pay a deductible under certain circumstances, such as when you're not at fault in an accident.
Damage to your vehicle caused by weather events such as hail, flooding, or falling tree branches due to snow or ice. Typically covered under comprehensive insurance.
Our insurance experts can help you understand complex terms and find the right coverage for your needs.
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