10 Important Car Insurance Terminologies You Must Know About
10 Important Car Insurance Terminologies You Must Know About
Table of Contents
One must be aware that it is punishable by the law to drive an uninsured vehicle. A valid Motor insurance is mandatory for all the vehicles according to The Motor Vehicles Act, 1988. Hence, making one required to buy a valid motor insurance.
At the time of making a decision of which insurance to purchase people face a difficulty and find this a confusing and complicated process as there are various insurance terminologies, they also find it difficult to understand the coverage offered, hence making it difficult to make a decision.
In this article we will dive into 10 Important Car Insurance Terminologies One Must Know About!
10 Important Car Insurance Terminologies
Some very common car insurance terminologies related to car insurance are clarified and explained in depth so one could make rational decisions on which one to go for:
- Own Damage Premium or Cover:
helps the owner against the damages by self, these damages may be endured due to unanticipated events like natural calamities, road accidents, theft and many more. This type of car insurance leads one to get covered financially and obtain compensation for own damages. The liabilities for third party like death, injury, property damage etc. are not covered in this. - Insured Declared Value:
The maximum claim of insurance one can obtain from the insurance company in case of theft or accidental damage is called the Insured Declared Value (IDV). The premium paid on car insurance is also dependent on this factor. The premium is dependent on the market value of the car less the depreciation. - Zero Depreciation Cover:
An additional cover purchased by the policy holder along with the Comprehensive Car Insurance is called Zero Depreciation cover. It also provides coverage for depreciation over the car as well as its parts over many years. In order to purchase a zero dep add on, one must pay some extra premium in addition to the price of car insurance. It includes normal wear and tear sustained over the years unlike other car insurance policies and it provides security irrespective of the car’s age. - Third Party Cover:
It provides damage cover to the third party involved, the liabilities for third party like death, injury, property damage etc. are covered in this by taking care of their damage expenses which includes medical costs, repairing cost and property damage. It is mandatory in India to buy Third party liability insurance, not doing so is punishable by the law. - Comprehensive Car Insurance:
This is the protection against accidental damage due to various unforeseen events such as natural calamities, theft, accidents, self ignition, strikes or riots etc. It is mandatory to own a Comprehensive car insurance, it covers a lot of damage. - Deductibles:
Choosing this can deduct one’s insurance premium as one is able to co pay a percentage of their insurance claim, this prevents one from raise in frivolous claims. While some Deductibles are voluntary some are compulsory. The former states one can opt to bear a part of their claim while purchasing a car insurance, on the other hand the latter states that there is a claim amount that one is bound to pay. - Car Theft Cover:
This is an additional cover and one is not bound to purchase, this covers against the theft of car. In case of car theft one is provided with the car’s Insured Declared Value (IDV) as insurance claim. - Roadside Assistance:
In case one’s car is facing some difficulty or is broken down, the Road Side Assistance offers mechanical and electrical services in case of emergency. - Cashless Garage:
The insurers who obtain a network with garages provide this service, this leads one avail car service for free, one is required to pay only if the expense exceeds the policy cover. - No Claim Bonus:
The people who do not obtain any insurance claim for a given term are provided with this discount. The advantage one can get is that this brings down one’s insurance premiums.
Conclusion
It is very crucial for an individual to understand all the terminologies of Car Insurance before making a decision which ones to go for, one must be diligent. This leads an individual to make rational and informed decisions while buying an insurance.
Also read: Before Buying Comprehensive Car Insurance, There Are A Few Things To Think About
Car Insurance Premiums For SUVs And Sedans: What Factors Influence Them
