Car Insurance is one of the most important documents that you need to carry along with you while you are out on the roads. But for most of us, its a mere piece of paper which we carry just for the sake of having it. When it comes to claims or renewal, we are not aware of the basic terms which makes it very easy for the workshops and the insurer to have maximum profit by making you pay more than what you were supposed to! In today’s featured, we take you through 15 basic car insurance terminologies that you ought to know! Let’s start.
Third-party cover or third party insurance is mandatory in India under the Motor Vehicles Act. The name is so because, under this cover, no one from the insurer or the insured can avail any benefit from the cover. A third party which might be involved in the accident gets all the benefit here. This covers the insured’s legal liability if there is damage or injury to a third party person or their vehicle.
Own Damage Cover
OD Cover includes the compensation for the damage caused to you as well as the third party in case of an accident. This covers damages on your car to a large extent but you will have to refer to your policy to ensure the coverage. An OD policy enables you to get compensation for any damage to your car in an accident.
Comprehensive Car Insurance Cover
This is the insurance cover that has got everything covered for your car and the third party as well. What’s covered and what’s not depends upon the policy and the insurer you choose but in most cases, the comprehensive policy has got you covered against theft, natural disasters, animal damage and more.
Personal Accident Cover
In case you need additional coverage over the comprehensive package, you need to opt for the personal accident cover. Here, you have an option for getting yourself and all the passengers in your car covered in case of an accident. This can be really beneficial in case of an accident where you or other passengers travelling in your car might get injured.
IDV (Insured Declared Value)
Most of you might have negotiated with the insurance companies over your car’s IDV. The most commonly known fact is that the lower the IDV is, the lower amount you have to pay as a premium. This is NOT right! You might have to pay less premium but in case of a major claim, it will give a bigger advantage to the insurer! This is because, if you increase the IDV, your premium might get increased by a mere amount which can prove to be profitable in major figures in case of a loss.
Ever made an insurance claim? You might have thought that even after having the most premium insurance plan, you had to pay a certain sum of money. Right? This is because these come under the category of compulsory deductibles so that car owners don’t file claim unnecessarily thinking the insurer will pay everything for them. This is completely ethical and legal.
NCB (No Claim Bonus)
As the name suggests, this is a bonus that you can avail if you don’t file a claim. The NCB percentage is mentioned on your policy papers already and this bonus increases with the number of years you haven’t claimed the insurance for. Usually, the NCB is between 20-25% for most of the policies. This is one. of the most important one among car insurance terminologies as it can help you save on your car insurance premium
One of the lesser-known among car insurance terminologies. Liability is the amount of money that the insured needs to pay to the third party in case of any damage caused. It is legal to enforce the liability therefore, the name. The liability may be for the injuries suffered, damage to property and even death.
Any modification that you do in your car needs to be mentioned in the registration certificate as well as the insurance policy documents. The process of getting them mentioned at the required places is known as an endorsement. The additions can include anything from a bass tube to an external CNG kit!
In most cases, the owner needs to pay the full amount to the garage and gets it reimbursed from the insurance provider. A cashless garage is an insurer-suggested place where the owner can get their car repaired and pay only what he needs to pay (the deductibles and the filing charge). The insurance company pays directly to the garage for all the repair work at a cashless garage.
Break in Insurance
Forgot to renew your car’s insurance timely? Now, your car comes under the category of vehicles with ‘break in insurance’. If there is a gap of even a few hours from the point of time when you were supposed to renew your policy, you need to get your car inspected by the insurance company and then pay the premium required.
Ever gone through your car insurance policy? Well, your policy might not cover everything you need it to do. If you want any additional thing to be covered by your insurance policy, you need to opt for it as an add-on. You can have a list of add-ons from the insurer and choose them according to your needs.
Depreciation Waiver Clause
Each and every part of your car has a value that depreciates with time. If you meet with an accident, the insurance company will obviously pay you for the repair by evaluating the current cost of the part. In this case, you will be required to pay the balance between the cost of the new part and the cost at which your existing part has been evaluated. If you want the insurance company to pay the complete cost for the part replaced, you need to opt for the depreciation waiver clause.
Proof of loss
You obviously have to tell the insurance company about the losses that you have suffered. For this, you need to provide them with a proof of loss which can be in the form of the workshop bill which shows them the amount that they need to pay against your insurance claim.
Some insurance policies give you the advantage of roadside assistance where you can seek help from your insurer and they can provide immediate assistance so that you don’t feel stranded! The RSA service can include various activities like arranging alternate transport, towing, arranging for hotel accommodation, ambulance services, changing a flat tire or unlocking your car if you accidentally leave your keys inside etc depending upon your insurer.
These were the 15 most important insurance terminologies that you need to know about. We hope now you will definitely feel confident while getting insurance policy for your car. If you still come across a new term in your policy, do let us know in the comments section below and we will decode it for you!