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Top Car Insurance Jargons

Published On Oct 17, 2020 5:30 AM 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.

3. Deductibles

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.

4. Add-ons

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.

  • Zero Depreciation Cover: This is a type of add-on cover. It can be purchased along with a comprehensive insurance plan or a standalone own-damage cover. It mitigates the depreciation rate of the car during claim settlement, making the insurance claim amount significantly higher. However, this add-on is only available for cars that are less than five years old. It is also called the bumper to bumper cover.
  • Return to Invoice: This add-on cover fills in the gap between the insurance claim amount and the invoice amount in cases of total loss or theft. It can make a significant difference in the case of a mishap.
  • Consumables Cover: This cover takes care of the aspects of the car that are entirely consumed in one use such as nuts, bolts, engine oil etc.
  • Tyre Protect Cover: The car insurance cover takes care of a number of aspects, however, the car’s tyres are not included. If you want coverage for the tyres you will require this cover to receive compensation.
  • Roadside Assistance Cover: This cover takes care of the services that may be required in case of a mishap including tow truck services, mechanic, tyre change, ambulance service and one way cab rides.
  • Passenger Assistance Cover: In the event of a mishap the owner driver of the car is responsible for all the other passengers in the car. With this insurance cover any mishap that affects the passengers is covered by the insurance provider.


With the knowledge of these important terms 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.

Types of Car Insurance You Should Know:

Third Party Car Insurance

Comprehensive Car Insurance Policy

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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.

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