Top Car Insurance Jargons
Published On 17 Oct 2020 By InsuranceDekho
Top Jargons to Know Before Buying Vehicle Insurance Online
Buying car insurance online can appear like a daunting procedure. You must complete the process by yourself and viewing all the different policies available alongside the varying features and coverage can get confusing. It is important to be informed about the various jargons and technical terms involved in the world of car insurance before you make a purchase.
Top Jargons to Know Before Buying Car Insurance
Let’s read all about some of the most common ones.
1. IDV (Insured Declared Value)
IDV in car insurance refers to the assessed market value of your car which goes down over time. It would be lower than the ex-showroom price of the car, ie. the price you have paid at the time of purchasing the car. In case of a claim raised by you, the amount you would be compensated for by the insurance provider is the IDV of your car.
2. NCB (No Claim Bonus)
No Claim Bonus refers to a discount that is applicable at the time of car insurance renewal. It is applicable if, during the policy tenure, you do not raise any claim. In this situation, you would receive a discount on your renewal premium that is cumulative in nature and would increase by 10% each year.
Deductibles refer to a portion of the claim amount that you as the policyholder would be paying at the time of raising a claim. Deductibles are of two types:
- Compulsory Deductibles: These refer to non-optional deductibles that are usually determined based on the cubic volume of the car and are compulsory for you as the policyholder to pay at the time of raising a claim.
- Voluntary Deductibles: These are deductibles that you may opt in to, ie. agree to pay at the time of raising a claim, in addition to the compulsory deductible component. These would have an impact on your insurance premium and likely fetch you some discount. However, it is not advisable to opt for these as you would be additionally liable at the time of raising a claim.
A car insurance add-on refers to a coverage product that may be purchased in addition to a comprehensive car insurance policy, to strengthen the coverage offered. Add-ons cannot be purchased on their own and must be purchased in addition to an existing insurance policy. They offer specific and varied coverage for a range of different scenarios and allow you to customise your insurance policy according to your own needs. For example, if you live in a flooding-prone area you may opt for engine protection coverage to reduce your liability in case of damage to your engine.
With the knowledge of these important jargons used in car insurance, you are equipped to view various policies online and understand the nature of their coverages. You will be able to understand which policy and insurance provider fits you best and thus make an informed decision which is best for you and your vehicle.
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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.