motorcycle insurance glossary - I
insurance
Insurance is a system in which groups of people who have similar chances of suffering a loss transfer their risk of loss to an insurer who pools the risk of many people together.
In exchange for payment of premium the motorcycle insurer promises to reimburse the person for their covered losses.
insurance fraud
Insurance fraud is the act of falsifying or exaggerating the facts of an accident to an bike insurance company to obtain payment that would not otherwise be made. Common types of motorcycle insurance fraud are staged accidents, exaggerated injuries, and inflated medical bills.
insured
The insured is the person or organization covered by the motorcycle insurance policy.
insurer
The insurer is the company that provides motorcycle insurance and are authorised and regulated by the FSA.
insurance premium tax (IPT)
Insurance Premium Tax (IPT) is levied at two rates:
- a standard rate of 5%
- a higher rate of 17.5% for travel insurance and some insurance for vehicles and domestic/electrical appliances
Most long-term insurance is exempt from the tax, as is reinsurance, insurance for commercial ships and aircraft and insurance for commercial goods in international transit. Premiums for risks located outside the UK are also exempt, but they may be liable to similar taxes imposed by other countries.