Car Insurance: Terms You Need To Know
Before you buy a vehicle insurance policy, familiarise yourself with the most frequent car insurance terminology.
Table of Contents
- Terms You Should Know About Car Insurance
- Take Away
Due to a lack of information about particular words included in the car insurance policy document, most car owners buy a car insurance policy based on its coverage and premium but do not grasp its terms and conditions. This finally makes it difficult to use the policy. As a result, before acquiring a vehicle insurance policy, it is a good idea to familiarise yourself with the most frequent car insurance phrases. Let's look at some of the most common phrases linked with auto insurance so you can make an informed decision.
Terms You Should Know About Car Insurance
The following are some examples of frequent terms:
A written agreement or contract that specifies the coverage, rates, and terms of an automobile insurance policy.
The amount that insured individuals must pay to the insurance company in order to be covered under the policy.
Injury to the body
Any harm, sickness, or death caused by an automobile collision.
An insured person is one who is covered by an automobile insurance policy.
The insurance firm that provides coverage in exchange for premium payments.
An automobile insurance policy's coverage refers to the features and advantages it provides.
It is the highest amount of insurance or protection that an insurance provider guarantees.
It is the cost of repair or expense that the insured individual must pay before the insurance company pays up during the claim settlement process.
Depreciation refers to the decrease in the value of an insured automobile as it ages and wears out. It rises in tandem with the vehicle's age, lowering the insurer's claim payout.
An insured individual can file a claim if their covered automobile is damaged or stolen as a result of an accident or incident. The amount you want your insurance to pay to compensate you for your loss is referred to as a claim.
IDV (Insured Declared Value)
The IDV is the insured car's current market value, which decreases as it becomes older. It is the amount agreed upon by the insured and the insurer to be paid in the event of car theft or total loss.
NCB (No Claim Bonus)
NCB is a reward given by insurance companies to policyholders who do not file a claim during the policy year. It builds up with each year of claim-free service and can go as high as 50%.
TP (Third-Party Policy)
Third-party auto insurance coverage is the most basic type of insurance that all drivers must have while on the road. It protects you from financial obligation for personal injury, death, and property damage caused by a third party.
OD (Own-Damage Policy)
The own-damage automobile insurance coverage pays for expenditures incurred as a result of damages to the covered car caused by an accident, theft, fire, natural or man-made disaster.
The Policy that is Comprehensive
A comprehensive automobile insurance coverage protects the covered vehicle and its owner against third-party liabilities as well as their own losses.
All coverages are tailored to match the customer's needs and assist them in maintaining financial stability, even in the event of an emergency. Policyholders can tailor their plans to guarantee total satisfaction by selecting from a variety of add-ons. You should choose a vehicle insurance coverage that meets your demands and expectations. Find out what type of auto insurance is best for you. It is a legal obligation that offers financial coverage for damage to your vehicle as a result of an unforeseen catastrophe.
Do read - How To Drive Safely At Night?
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.