Motorbike Insurance Glossary
Let's face it - motorcycle insurance can be a little confusing at times. Do you know your liability from your legal expenses? Well we've tried to clear up any confusion with this useful motorbike insurance glossary - helping to clear up insurance and legal jargon when looking for a policy.
The ABI (Association of British Insurers), is the governing body that regulates the British insurance industry.
- Accidental Damage Cover:
Insurance cover for accidental damage to your motorcycle - i.e. not caused by a third party, theft, fire or malicious damage.
- Act of God:
An incident or event that is outside of human control (such as sudden floods or other natural disasters), for which no one can be held responsible. This potentially yields an motorcycle insurance case in which liability cannot be ascribed because of the extraordinary circumstances that arose.
- Additional Named Riders:
An individual or entity who is added to a motorcycle insurance policy with the status of named insured after the motorcycle insurance policy is written. Such an individual or entity would have the same rights and responsibilities as an individual or entity named as an insured in the motorcycle insurance policy declarations (other than those rights and responsibilities reserved to the first named insured).
A limit in a motorcycle insurance policy stipulating the most it will pay for all covered losses sustained during a specified period of time, usually one year.
- Agreed Value:
An agreement made between the insurer and the insured at the inception of the motorcycle insurance policy confirming that both parties concur that the limit of insurance set forth in the schedule is the motorcycle's value, and that agreed upon value is the amount that will be paid by the insurer in the event of a total loss to said motorcycle.
- All Risks:
A comprehensive policy which covers all risks (disregarding specified exceptions)
- Breakdown Cover
A motorcycle insurance policy that provides a rescue service in the event of a breakdown.
- Business Use
If your motorcycle insurance includes business use then you will be insured whilst using your motorcycle for business purposes; but will normally exclude hire, reward, motorcycle couriers or the carriage of paying passengers.
- Certificate of Motorcycle Insurance
The certificate of motorcycle insurance is issued at the inception of your motorcycle insurance policy. The information on your certificate of motorcycle insurance forms a contract between you and the insurer and needs to be carefully read in conjunction with your motorcycle insurance policy and policy schedule. Your certificate of motorcycle insurance is also a legal document required by law and provides proof that your motorcycle is insured in accordance with the requirements of the Road Traffic Act.
Should an incident occur, such as an accident that damages you or your bike then a claim will need to be made. Policy holders must file a motorcycle insurance claim before any money can be disbursed to repair centres or other contracted services. The motorcycle insurance company may or may not approve the claim, based on their own assessment of the circumstances.
- Compulsory Basic Training (CBT)
Compulsory basic training (CBT) was introduced in 1990 to help reduce the very high accident rate among inexperienced motorcyclists. CBT must be completed before a learner moped or motorcycle rider is allowed to ride on the road with L-plates or D-plates in Wales.
- Comprehensive Insurance
Comprehensive cover generally allows you to claim for any damage to your motorbike (except for anything outlined in your policy exclusions).
Motorcycle insurance cover is the agreed area of risk covered by your insurance policy. There are 3 types - Comprehensive, Third Party and Third Party Fire & Theft.
The sum of money awarded to the injured party in an insurance claim in compensation for loss, harm or injury. Damages are generally awarded to place the claimant in the position he/she would have been had the accident not taken place.
The defendant is the person against whom a claim is brought.
- Effective Date
When an insurance policy will begin.
Should your bike be damaged or stolen and you make a claim against your policy the excess is the amount of money you will have to pay toward the claim.
The Financial Conduct Authority (FCA) regulates the UK insurance industry and it is a criminal offence to trade in this sector without their authorisation.
- Garaging Location
The garaging location of the insured vehicle may play a major role in the cost of the auto insurance. If a vehicle is garaged in a location that is deemed to have safe parking, the insurance premiums will be lower than those for policies on vehicles that have a garaging location that is considered unsafe or more at risk.
- Green Card
A Green Card is an international motorbike insurance document. It shows that you are insured to ride in that particular country and can be used as proof of insurance. You should check your insurance policy to see whether it includes a Green Card for travel abroad.
- High Risk Occupation
A high risk occupation is a job that makes a rider more likely to have an accident. Motorcycle insurance policies often excludes people with jobs, such as a bike courier or pizza delivery person, or alternatively charge them higher premiums, however, there are specialist policies that may be able to cover these riders.
Motorcycle insurance is a system in which groups of people who have similar chances of suffering a loss transfer their risk of loss to an insurer who pools the risk of many people together. In exchange for payment of premium the motorcycle insurer promises to reimburse the person for their covered losses.
- Insurance Fraud
Insurance fraud is the act of falsifying or exaggerating the facts of an accident to an bike insurance company to obtain payment that would not otherwise be made. Common types of motorcycle insurance fraud are staged accidents, exaggerated injuries, and inflated medical bills.
In all documents and info, the "insured" refers to the person who has taken out the motorcycle policy.
The insurer is the company that provides motorcycle insurance and are authorised and regulated by the FCA.
- Insurance Premium Tax (IPT)
Insurance Premium Tax (IPT) is levied at two rates: a standard rate of 5% or a higher rate of 17.5% for travel insurance and some insurance for vehicles and domestic/electrical appliances.
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- Knock for Knock
Knock for knock - An arrangement between insurance companies to cut down on paperwork and legal action, whereby insurers pay for the costs of claims for their own customers, rather than claiming the money from the other party.
- Laid Up
Laid Up motorbike insurance is a form of cover for anyone who keeps their bike in storage, usually over winter. It gives very basic cover that protects your bike from theft or damage but you cannot ride your bike on a Laid Up policy.
- Legal Expenses Insurance
Legal expenses insurance (LEI), also known as legal protection insurance (LPI) or simply legal insurance, is a type of insurance which covers policyholders against the potential costs of legal action brought by or against the policyholder.
See "Liability Insurance"
- Liability Insurance
Liability insurance pays and renders service on behalf of an insured for loss arising out of their responsibility (due to negligence), to others imposed by law or assumed by contract.
- Loss Adjuster
A loss adjuster is an independent third party who may be used by an motorcycle insurance company to assess the value of a claim, particularly if there is a disagreement between the insurer and the insured.
- Market Value
This is the estimated cost of the relative replacement of a model, taking into account its age, model and other characteristics, based on a "market value".
- Material Facts
A material fact is any information that will affect the rate, acceptance or terms of a motorcycle insurance policy. This can range from age, accidents / convictions or the bike that is to be insured.
- Motorcycle Insurance
Insurance cover for a motorcycle.
If you own more than one motorbike, Multi Bike insurance can save you money and reduce hassle because your multiple policies are bundled into one.
- Named Insured
Any person, firm, or organization, or any of its members specifically designated by name as an insured(s) in an insurance policy, as distinguished from others that, although unnamed, fall within the policy definition of an "insured."
- No Claims Bonus / No Claims Discount
A No Claims Bonus (NCB) is when the premiums are cut after a specified period when no claims have been made.
- Optional Extras
Additional extras on top of the basic motorcycle provision.
- Pay As You Go Insurance
Pay as you go insurance is another name for Short Term insurance.
- Period of Insurance
The period of insurance is the time covered by your motorcycle insurance policy as shown in the policy schedule and on the certificate of motorcycle insurance.
Your motorcycle insurance policy comprises the policy booklet, policy schedule, statement of insurance (statement of fact) and certificate of motorcycle insurance.
- Protected No Claims Bonus / Discount
Protected No Claims Bonus - as the name suggests - protects your NCB. This is usually only available if you have accrued maximum NCB and you must pay an additional premium to protect it.
A quote for a motorbike insurance policy.
- Q Plate
A 'Q' plate is a VRM (vehicle registration mark () starting with 'Q' which shows that the motorcycle is either imported (registered outside the UK), built using a significant proportion of parts, ex-military or is stolen and recovered.
- Replacement Motorcycle
When the company can arrange for a replacement bike from an approved list to enable travel while the policyholder's own bike is repaired.
- Registered Keeper
The registered keeper of a motorcycle for insurance purposes is defined as the person who looks after a bike - not necessarily the vehicle's owner.
- Security Devices
These are the tools you use to secure your motorbike against theft or damage when it is not in use. There are various security devices available including disc locks, chains and padlocks. Your insurer will have a list of approved security devices and using one can reduce the amount you pay for your policy.
- Short Term Insurance
A policy that will cover riders who only require insurance for a limited period of time.
- Statement of Fact
A statement of fact forms the basis of your motorcycle insurance quotation / policy and will ultimately form part of your motorcycle insurance policy documents.
- Temporary insurance
Temporary insurance is another name for Short Term insurance.
- Third Party Cover
Third Party Cover provides basic insurance cover for a third party and also covers the liability of the policy holder. This can include pillion passengers.
- Third Party Fire & Theft
This third party policy includes damage to a bike as a result of the impact of fire, lightning, an explosion or attempted theft. Typically the policy will either include the cost of repairs, a replacement or a cash sum equivalent to the cost incurred.
- Total Loss
When an accident causes extensive or costly damage to your motorcycle, it's possible your motorcycle will be declared a total loss.
An insurance 'total loss' is calculated by taking into consideration the cost of repairs to your motorcycle, the value of the motorcycle and any salvage value that the motorcycle might have.
- Undisclosed Incidents
It is imperative that you disclose each and every incident that you or any named rider of your motorcycle has had. Incidents are deemed as material facts and must appear on your statement of fact as this forms the basis of the contract of motorcycle insurance.
- Undisclosed Modifications
It is very important thing to disclose any modifications to your bike. Technically you will not be covered if you do not disclosed any modifications to your bike
- Voluntary Excess
A voluntary excess is how much you choose to pay on top of your compulsory excess when you need to make a claim. If you choose to have a higher voluntary excess, this could help to lower your motorbike insurance premiums.
An insurance 'write off' occurs when the cost of repairs to your motorcycle exceed the value of the motorcycle (taking into account any salvage value).
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If you're looking for a motorbike insurance quote we recommend comparing policies to find the right one for you.
MCN Compare offers an easy-to-use bike insurance comparison website.