The AA team are experts in all things car insurance. While it’s great for us to help customers find better deals on car insurance and associated products, we do understand that some of the language and terminology can sound like gibberish if you’re not familiar at all with car insurance, especially for first-time/young drivers who would already be struggling to read the symbols on the dashboard (which we have a short guide for right here).
From understanding comprehensive against third party to knowing who exactly an underwriter is, here is our handy guide to wrapping your head around car insurance lingo.
Comprehensive Cover & Third-party Cover
Let’s get the big one out of the way, as it’s a term that confuses even those who’ve been driving for years and are shopping around for a renewal. Comprehensive cover is essentially full car insurance that covers you for almost all scenarios. Think the likes of your car getting damaged or you damage someone else’s car. When you have comprehensive coverage, it is YOU who is fully covered.
On the flip side, third-party cover is for the other cars getting damaged (i.e., they are the third party). Because you legally need some form of insurance to be on the road, third party is the cheaper of the two.
We have a breakdown here which compares comprehensive & third party so you can make an informed decision. Speaking of breakdowns…
Breakdown cover
Not to be confused with car insurance, always think of breakdown cover as something separate. While some insurance policies will include breakdown cover in a policy, it is usually few and far between. That’s why AA Membership exists to help those that need 24/7 personal cover. Also important to know that our membership covers people, so if you’re in someone else’s car and it breaks down, you can use an AA membership to assist you.
Premiums
This term gets banded around in any insurance conversation and can quickly get confusing. We wish we knew the etymology of premium for insurance, but simply put, a premium is a cost, i.e., how much you pay for your insurance.
So whenever someone asks you, “are the premiums higher or lower for this policy compared to that one?” they’re simply asking, “how much is your insurance?”.
Typically, premiums are higher for younger drivers as they carry a higher level of risk. If that’s your situation, see how the AA can help you with young driver insurance.
Underwriter
When you say it out loud, underwriter sounds like quite a mysterious person trying to figure out insurance in all its quirks, or someone doesn’t know their wrestler names. Back in the day, before things were all online, an insurer underwriter was a person whose job was to sit and figure out whether accepting someone for specific insurance was worth the risk. If you’ve ever seen the Ben Stiller film Along Came Polly, his character was an underwriter for more extreme insurance policies.
Nowadays, underwriter is more broadly defined as the company that decides to accept your quote. With AA car insurance underwritten by our panel of approved insurers, your quote/policy has a specific underwriter approving it.
Learn more about the lingo
The terms above were just some of the most commonly used in our niche. You can get a wider list of car insurance terminology here, which also covers things like indemnity & ULR coverage.
If you’d rather just leave it to the experts to get car insurance sorted, learn more about AA car insurance and how it helps customers across Ireland
