Let’s face it, insurance documents can feel like they’re written in another language. As a courier driver, you’re focused on being on the road, not decoding technical terms and ‘gobbledegook’. But understanding a few key bits of insurance jargon can make a big difference. It can help you choose the right cover, make renewals smoother, and stop you from getting caught out by the small print.
Mind you – our helpful team are always on hand to support you and make getting the right cover a smoother process.
Here’s your no-nonsense guide to the most common insurance terms used in typical courier insurance explained in plain English.
Premium
What it means: The amount you pay for your insurance cover (monthly, quarterly, or yearly).
Why it matters: This is what your cover costs you – knowing this helps you budget and compare quotes properly.
Policyholder
What it means: The person or business/company that is covered by the insurance policy. The policy holder is responsible for paying the premium.
Why it matters: That’s you (or your company). Only the policyholder has the legal right to make changes, submit claims, or cancel the policy. The policyholder is usually (but not always) the main driver or operator of the insured courier vehicle(s).
Policy Schedule
A document listing your policy details i.e. who’s insured, what’s covered, and any limits or exclusions.
Coverage
What it means: The protection your insurance gives you. It defines what is included in the policy. It outlines what types of incidents, property, or liabilities are protected. It also specifies the limits, conditions, and any exclusions.
Why it matters: This tells you what’s included – like damage to vehicles, theft, or liability cover. Knowing your coverage tells you: What’s included, what’s excluded, how much your insurer will pay out, whether you need additional cover (like breakdown, European use, etc.).
If you don’t know what coverage you have, you could be unknowingly exposed to serious risks that could shut down your business or leave you with big bills. Knowing your policy inside and out helps you drive with confidence.
Excess
What it means: The part of any claim you pay yourself i.e.. The amount you, as the policy holder agree to pay towards a claim. The amount you pay toward a claim before the insurance kicks in.
Example: If your excess is £500 and damage costs £1,200, the insurer pays £700.
It can be compulsory (set by the insurer), voluntary (you choose to lower your premium by agreeing to pay more upfront in the event of a claim,) or a combination of both.
Why it matters: It affects what you’ll pay if something goes wrong, this is important to check before you claim.
Exclusion
What it means: Situations or types of damage your insurance won’t cover.
Why it matters: You don’t want surprises, knowing exclusions helps avoid rejected claims. Understanding exclusions is key to knowing where your insurance starts and stops.
For example, if equipment or machinery breaks down due to age or regular use, it’s typically not covered. Insurance is for sudden, unexpected events, not gradual deterioration.
For specific courier cover an exclusion might be, theft if you leave the keys in the van or ‘using the vehicle for non-Courier work”. If the insured van is used for purposes outside of declared courier work (e.g., ridesharing, personal use beyond the agreed limit), that could breach the terms and be excluded.
Endorsement
What it means: Endorsements are a written amendment or addition to an existing insurance policy, which alters the terms, coverage, or conditions, such as adding a new driver or updating the vehicle’s details.
Why it matters: It updates your policy to fit your real-life needs but may affect your premium.
Underwriting
What it means: The process the insurer uses to assess your risk and decide your cover and premium (the cost of your cover).
Why it matters: Things like claims history, vehicle type, and driving records all impact your costs.
Indemnity
What it means: A promise to put you back in the same financial position you were in before a loss.
Why it matters: Insurance won’t leave you better or worse off, it’s about covering your actual losses. For example, if your insured van is stolen, your insurer will pay the value of the van at the time of the theft, not the cost of a brand-new one -unless you are lucky enough to have a policy that has been enhanced with ‘New for old’ cover. Some insurers will offer this benefit for Vans in their first year of registration.
Limit of Liability
What it means: The highest amount the insurer will pay for a single claim or overall policy period.
Why it matters: If a big claim exceeds this limit, you’d need to cover the rest yourself.
No Claims Bonus (NCB)
A discount on your premium for not making any claims over a period of time.
MTA (Mid-Term Adjustment)
What it means: Any changes made to your policy during the insurance year, like adding/removing a driver or vehicle or your business hires new staff members or purchases expensive new equipment.
Why it matters: It keeps your policy up to date. Some MTAs may increase or reduce your premium.
FCE (Fleet Claims Experience)- also known as Claims Listing
What it means: This refers to the collective claims history of all vehicles made over the past 3–5 years typically looking at overall patterns and averages rather than individual driver or vehicle histories, thus giving a view of the overall fleet risk profile.
Why it matters: Insurers use this collective data to determine coverage needs and pricing for the entire group of vehicle and then set premiums based on this risk assessment. A clean FCE could mean better rates.
CCE (Confirmed Claims Experience)
What it means: This focuses on individual driver or vehicle claims, verifying and confirming past claims as a predictive measure for future risk.
Why it matters: It is used to assess the risk and reliability of that particular driver or vehicle for future coverage. It confirms your claims history is accurate and gives insurers confidence in offering cover.
Telematics (including cameras)
What it means: Technical equipment like dashcams, GPS tracking or driving behaviour monitoring that tracks vehicle location, speed, and driving behaviour, often includes dashcams.
Why it matters: Real-time data helps insurers assess risk more accurately. Dashcam footage can help prove who’s at fault in an accident. Speed monitoring (which records how fast the driver is going) and harsh braking or acceleration alerts, (tracking risky driving habits), both encourage better driving and help to improve safety, which can reduce claims and hence could even lower your premium.
Why this all matters
Insurance doesn’t have to be confusing. When you understand the language, it’s easier to spot the best deal, read your documents with confidence, and avoid any nasty surprises at claim time.
So, next time you’re sorting your courier, or business insurance keep this guide handy.
Got questions about your cover? Always ask – there’s no such thing as a silly insurance question when your business is on the line.
If you’d like to review your existing policy, our team is here to help. Please don’t hesitate to get in touch. We understand the finer details of insurance, so you don’t have to!
For a new insurance quote, contact our dedicated insurance specialists today.
Call us on 0330 320 8286