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Reference

Glossary Of Motor Claims Terms.

Standard industry vocabulary and the named bodies and instruments used across this site, defined plainly.

Accident Benefits
Coverage paying for medical treatment, rehabilitation and income replacement regardless of fault. The structure varies significantly by province in Canada.
Actual Cash Value (ACV)
The value of a vehicle immediately before the loss, generally replacement cost less depreciation. The basis on which most total losses are settled.
ADAS
Advanced driver assistance systems. Camera, radar, lidar and ultrasonic systems supporting functions such as automatic emergency braking, lane keeping and blind-spot monitoring.
AFCA
Australian Financial Complaints Authority. The single external dispute resolution scheme for Australian financial services, including general insurance.
Aftermarket Parts
Replacement parts produced by a manufacturer other than the vehicle's original equipment manufacturer.
AFS Licence
Australian Financial Services licence. Required since 1 January 2022 for persons providing claims handling and settling services in Australia.
APRA
Australian Prudential Regulation Authority. Prudential supervisor of Australian insurers under the Insurance Act 1973.
Appraisal / Estimate
The documented assessment of the damage and the cost to repair it, prepared by a staff appraiser, an independent appraiser or a repairer.
ASIC
Australian Securities and Investments Commission. Conduct regulator for Australian financial services.
Betterment
An adjustment reflecting that a repair has left the vehicle in better condition than before the loss, typically applied to wear items.
Bodily Injury (BI)
The liability coverage responding to injury caused to another party. The fastest-growing severity component in motor claims.
Calibration
The procedure restoring an ADAS sensor to manufacturer tolerance after repair or replacement. Static calibration uses targets in a controlled space; dynamic calibration requires driving the vehicle under specified conditions.
Combined Ratio
Losses plus expenses divided by earned premium. Above 100% indicates an underwriting loss.
Consumer Duty
A United Kingdom FCA standard requiring firms to deliver good outcomes for retail customers. In force for open products from 31 July 2023 and closed products from 31 July 2024.
CPS 230
APRA Prudential Standard on Operational Risk Management, in force from 1 July 2025, covering operational risk, business continuity and material service provider arrangements.
Credit Hire
A replacement vehicle provided to a not-at-fault driver by a third-party firm which then recovers the cost from the at-fault driver's insurer, often at rates above standard rental.
CTP
Compulsory Third Party. The Australian state and territory schemes covering bodily injury arising from motor accidents.
Cycle Time
Elapsed time through a defined stage of the claim. Keys-to-keys measures from the customer surrendering the vehicle to its return.
Deductible
The amount the policyholder bears before coverage responds. Rising deductibles change which losses are reported at all.
Delta-V
The change in velocity during a collision, used as a proxy for crash energy and therefore for the plausibility of a claimed injury.
Direct Repair Program (DRP)
A network of repairers contracted to an insurer on agreed terms, in exchange for referred volume.
DORA
The European Union's Digital Operational Resilience Act, applying from 17 January 2025, covering ICT risk, incident reporting, resilience testing and third-party ICT service providers to financial entities.
EIOPA
European Insurance and Occupational Pensions Authority. The EU supervisory authority for insurance and occupational pensions.
Équité Association
The Canadian not-for-profit serving property and casualty insurers on insurance crime, fraud prevention and vehicle recovery.
EU AI Act
Regulation (EU) 2024/1689, in force since August 2024 and applying in stages, classifying AI systems by risk and imposing obligations accordingly.
FAIS Act
South Africa's Financial Advisory and Intermediary Services Act 37 of 2002, governing licensing and conduct of financial services providers.
FCA
Financial Conduct Authority. Conduct regulator for United Kingdom financial services, including general insurance.
First Notice Of Loss (FNOL)
The point at which a loss is first reported to the insurer. The formal start of the claim, which is not the same moment as the loss.
FSCA
Financial Sector Conduct Authority. South Africa's market conduct regulator for financial institutions.
FSRA
Financial Services Regulatory Authority of Ontario. Regulator of Ontario's insurance market.
Frequency
How often claims occur, usually expressed per unit of exposure. Paired with severity to explain loss cost.
GDPR
The European Union's General Data Protection Regulation, and in the United Kingdom the UK GDPR alongside the Data Protection Act 2018.
Ghost Broker
A fraudster selling fake, altered or fraudulently obtained insurance policies to consumers who believe they are insured.
GISA
General Insurance Statistical Agency. Collects and publishes statistical data for Canadian insurance regulators.
IBC
Insurance Bureau of Canada, the national association representing private home, auto and business insurers.
ICA
Insurance Council of Australia, the representative body of the Australian general insurance industry.
ICB
Insurance Crime Bureau. South Africa's dedicated insurance crime body.
ICOBS
The FCA's Insurance: Conduct of Business sourcebook, which contains the United Kingdom rules on claims handling.
IFB / IFED
The Insurance Fraud Bureau, a United Kingdom industry body coordinating cross-insurer fraud investigation, and the Insurance Fraud Enforcement Department, a specialist police unit within the City of London Police funded by the insurance industry.
Indemnity
The payment that puts the insured back in their pre-loss position. Distinct from the expense of handling the claim.
Length Of Rental (LOR)
The number of days a replacement vehicle is supplied. A daily-accruing cost tied directly to repair duration.
Loss Adjustment Expense (LAE)
The cost of investigating, handling and settling claims, separate from indemnity. Rises with the number of human touches on a file.
Loss Ratio
Incurred losses divided by earned premium.
MIB
Motor Insurers' Bureau. Operates the United Kingdom Motor Insurance Database and compensates victims of uninsured and untraced drivers.
CBUAE
Central Bank of the UAE. Integrated regulator for banking and insurance, having absorbed the former Insurance Authority in 2021.
FSA (Japan)
Financial Services Agency. Integrated supervisor of banking, securities and insurance, operating under the Insurance Business Act.
FSC / FSS (South Korea)
Financial Services Commission, the rule-making authority, and Financial Supervisory Service, the executive supervisor of insurers.
GIA (Singapore)
General Insurance Association of Singapore. Publishes the Motor Claims Framework. Not a regulator.
GIROJ
General Insurance Rating Organization of Japan. Calculates reference loss cost rates for voluntary motor insurance and standard full rates for compulsory automobile liability insurance.
Jibaiseki (CALI)
Japan's compulsory automobile liability insurance, required under the Automobile Liability Security Act and covering bodily injury only.
MAS
Monetary Authority of Singapore. Central bank and integrated financial regulator, supervising insurers under the Insurance Act 1966.
Motor Claims Framework
Singapore industry framework requiring an accident to be reported to the insurer within 24 hours or by the next working day, incorporated as a condition of motor policies.
Najm
Najm for Insurance Services. The unified motor accident reporting and assessment body for the Saudi market, which attends accidents, documents them and apportions fault on behalf of insurers.
NAIC
National Association of Insurance Commissioners. United States standard-setting body whose model laws and bulletins states adopt in varying forms. Not itself a regulator.
NFO
National Financial Ombud Scheme South Africa. Began operating 1 March 2024, consolidating four former ombud schemes.
Nuclear Verdict
A jury award of exceptional size, commonly defined as $10 million or more, and a significant driver of liability severity in the United States.
OEM Parts
Parts supplied by the vehicle's original equipment manufacturer.
OSFI
Office of the Superintendent of Financial Institutions. Prudential regulator of federally regulated Canadian financial institutions, including insurers.
PIPEDA
Personal Information Protection and Electronic Documents Act. Canada's federal private-sector privacy statute.
Policyholder Protection Rules
South African conduct rules made under the Short-term and Long-term Insurance Acts, including the requirement that insurers maintain internal dispute resolution processes.
POPIA
South Africa's Protection of Personal Information Act 4 of 2013, supervised by the Information Regulator.
PRA
Prudential Regulation Authority, part of the Bank of England. Prudential supervisor of United Kingdom insurers.
Prudential Authority
South Africa's prudential supervisor, operating within the South African Reserve Bank under the Financial Sector Regulation Act.
Proxy Discrimination
A disparate outcome produced by variables correlated with a protected characteristic, without that characteristic being used as an input.
Quebec Law 25
Quebec's modernised private-sector privacy regime, phased in between 2022 and 2024, including rights in respect of automated decision-making.
Recycled Parts
Serviceable parts recovered from salvage vehicles, also called LKQ (like kind and quality) parts.
Re-VINing
Disguising a stolen vehicle by attaching the vehicle identification number of a legitimately owned one, allowing it to be registered and resold. Related to vehicle cloning.
SAIA
South African Insurance Association. The representative body for South African non-life insurers, and operator of the Vehicle Salvage Database.
Salvage
The residual value of a total-loss vehicle, recovered by the insurer through sale after settlement.
Severity
The average cost of a claim. Distinct from frequency, and currently the dominant pressure in motor lines.
Social Inflation
Growth in liability costs beyond general economic inflation, attributed to litigation funding, changing jury behaviour and larger settlements.
Solvency II
The European Union's prudential regime for insurers, with a corresponding Solvency UK framework in the United Kingdom.
Special Investigation Unit (SIU)
The insurer function responsible for investigating suspected fraudulent claims.
Staged Collision
A deliberately caused or wholly fabricated collision engineered to support fraudulent claims, often involving multiple coordinated participants.
Storage
Daily charges accrued by a vehicle held at a yard or impound facility pending inspection, authorisation or disposal.
Subrogation
The insurer's right, after paying its insured, to recover from the party responsible for the loss.
Supplement
An addition to an original estimate once further damage or additional required operations are identified, usually after teardown.
Third-Party Liability
Coverage responding to injury or damage the insured causes to others.
Total Cost Of Repair (TCOR)
The full appraised cost of a repairable claim, including parts, labour, materials and associated operations.
Total Loss
A claim where repair is uneconomic or the vehicle is unrepairable, settled on value rather than repaired. Also called a write-off.
Treating Customers Fairly (TCF)
The outcomes-based conduct framework applied across the South African financial sector.
UM / UIM
Uninsured and underinsured motorist coverage, responding where the at-fault party has no or insufficient insurance.
Vehicle Finance Fraud
Obtaining a vehicle through finance or lease using stolen or synthetic identity details, with no intention of repayment.
Vehicle Salvage Database (VSD)
Shared South African industry database operated by SAIA, used by member insurers to support claims integrity and underwriting decisions.