ASSESSOR A licensed professional trained in the knowledge of motor vehicle repairs, costs and the time taken for repairs. Assessors act on behalf of their clients (insurers or vehicle owners) by scrutinising repair quotations and negotiating with and authorising repairers to ensure repairs are completed properly and for a fair price..
An insurance policy that covers any damange to the client's or third party's vehicle/property. The client pays a premium and may also have to pay an excess whenever a claim is made. Policies may include additional features (for an additional premium) such as reimbursement of replacement vehicle costs, theft of personal property, windscreen cover for no excess, etc. This type of insurance does NOT provide compensation for injuries suffered by drivers or passengers in a motor vehicle accident (see CTP).
CTP Compulsory Third Party insurance. This insurance only provides compensation for people injured in a motor vehicle accident and is a mandatory part of the vehicle registration process. Sometimes CTP insurance is a component of the registration fee (arranged by the registration authority) and sometimes it must be obtained separately by the owner.
DEMURRAGE For motor vehicle insurance, demurrage refers to the 'transportation' costs incurred by a client because their vehicle is off the road for repairs (e.g. rental vehicle, cab fares, etc). When a driver is not at fault for an accident, reasonable demurrage costs can be recovered from a third party.
A contribution that must be paid by the insured when making a claim on an insurance policy, sometimes referred to as a “deductible”. Policies usually have a standard excess and may also have additional excesses according to the age and/or experience of the driver. The amount of the excess can usually be varied (and can even be made $0) by payment of a higher or lower premium. When a driver is not at fault for an accident and the insurer is able to recover their costs from the other party, the excess should be refunded by the insurer.
A Finance Lease is an agreement to finance the provision of a motor vehicle over a set period of time. The lease has a set ‘residual’ value for the vehicle and at the end of the lease the lessee pays the residual to the leasing company and then owns the vehicle.
Fully Maintained Operating Lease (FMOL) is an operating lease which is structured to include various defined running costs (e.g. registration, CTP, servicing, tyres, etc.) for the term of the lease.
Arranges and sells insurance to meet specific client needs. A broker will often package all the different insurances required by their client. A broker will generally create an income stream from the sale of insurance products to their clients.
The organisation that issues a policy to accept client’s risks in return for payment of an agreed premium. Insurers are sometimes referred to as “underwriters”.
A Novated Lease is a three way agreement (“novation agreement”) between an employer, an employee and a lease company under which the employee leases a vehicle from the lease company and the employer agrees to meet the employee’s financial obligations under the lease. Normally, the employer makes the lease payments and deducts them from the employee’s pre-tax income (known as salary packaging a vehicle). The type of lease on the vehicle itself will usually be an operating lease or a financial lease. If the employee leaves his/her employment, or the novation agreement ends, the employee retains the vehicle and assumes the obligations of the lease agreement. In Australia, vehicles salary packaged through a novated lease attract Fringe Benefits Tax (FBT) however this is treated concessionally so it can be a tax effective way for an employee to obtain a vehicle - depending on employee salary, vehicle cost, vehicle type, annual kilometres travelled and the FBT method used.
An Operating Lease is an agreement for the use of a vehicle, for a fixed period of time (effectively a long term rental agreement). The financial costs are known for the term of the lease and at the end of the agreement you may simply return the vehicle to the leasing company, with no residual value risk.
A premium is the fee charged by the insurer for extending cover under a policy. Premiums vary according to the benefits of the policy and the risks involved for the insurer. The risks involved will be assessed on such factors as the types of vehicles operated, the vehicles usage (e.g. industry, location, etc.) and the past insurance history of the client. The insurer collects premiums, invests them and pays all claims from the pool of invested funds.
When a vehicle fleet owner (or operator) elects to manage their own risk and the resulting costs for their vehicles and any third party vehicles. This can be a very attractive financial option to large fleet operators that have professional Accident and Risk management arrangements in place.
When you are involved in an accident and another party is held to be at fault, you may seek to recover the costs of repairs to your vehicle from the party at fault, or their insurer (if they lodge an insurance claim). If repairs to your vehicle are handled under a claim with your insurer, then they will recover the costs from the third party and refund your excess.
‘Third Party Property’ insurance. An insurance policy that only covers damage caused by a client’s vehicle to a third party’s vehicle or property (and therefore does not cover damage to the clients’ vehicle).
