Skip to main content

No matter what insurance policy you're taking out, there's no escaping the jargon that comes with it. And it doesn't help that with each insurance policy, there's a whole new set of terms to get your head around.

With that said, there are some general insurance phrases that most insurers will use. To help you get to grips with the basics, we're taking you through some of the most common.

Act of God

This refers to natural events outside of human control. For example, a flood, tornado and earthquake, are all 'acts of God' as there is no one held responsible for the damage caused. Depending on your policy, your insurer might not cover you for damage due to an act of God.


Someone who you assign your potential life insurance policy to by setting up a trust.


A policyholder who files a claim with their insurer to cover a loss.

Cover note

A temporary document confirming that a person has a current insurance policy. You can find out more about how long a temporary cover note is valid for in our blog.


This refers to a standard insurance policy. In car insurance, comprehensive refers to the highest level of policy you can take out. Comprehensive car insurance covers damage to others as well as damage to your own car as a result of an accident.


The amount of money that you agree to pay towards a claim on your insurance policy. An excess can either be compulsory or voluntary.

Insurance Premium Tax (IPT)

A tax on general insurance premiums including home, car and travel insurance introduced in 1994. Not all types of insurance pay this tax. The current rate of IPT is 10%.

Lump sum

A one-off payment you get for some insurance claims.  


The failure to take reasonable care that results in damage or injury to you or another person. This relates to all types of insurance.


A document that states the terms and conditions of your insurance contract.


The amount you'll pay each month, year or in one lump sum for an insurance policy. You can read more about what an insurance premium is here.


This covers you if you have a car accident that causes damage or injury to another person, vehicle or property. It doesn't cover the costs of repair to your vehicle. Third-party insurance is the legal minimum you need to drive a car in the UK.


A person that accepts business on behalf of an insurer. They decide whether or not to accept applications, and set out the details of a policy.  

Got a question about a thinkmoney insurance policy? You can find the answers on our Help and Support page.

Legal Information