In India, a third-party car insurance policy is mandatory as it financially secures the third party and/or their family in case of an unfortunate accident. However, there may be people who avoid buying insurance simply because the process can be daunting. Moreover, the complicated car insurance terminology can convince anyone to shrug it off. Well, fret not! In this article, we’ll take a look at some of the important car insurance terms that will help you buy insurance like an informed consumer.
Let’s check out the car insurance glossary and understand the common jargons:
The Insured Declared Value or IDV refers to the maximum amount of insurance claim you can get from the insurance company in case of accidental damage or theft of the car. It should ideally reflect an amount close to the current market value of the car so that the insurer can compensate you for your actual loss. The premium you pay for the car insurance also depends on the Insured Declared Value of the vehicle.
When you buy insurance for your car, the insurance company also factors in the cost of depreciation of your car. This means that whenever you make an insurance claim, you will get the claim amount in relation to the actual depreciated value of your car, instead of the buying price of your car. However, a zero depreciation cover allows for your car to be valued at its full price rather than depreciated price. As a result, you will get a higher claim amount if you have a zero depreciation cover in place. It should be noted that a zero depreciation cover needs to be purchased separately.
Own Damage Premium is paid to avail an insurance cover along with the third-party liability plan to protect your own car against events outside of your control. For example, if your car is involved in an accident, the own damage cover compensates you for expenses incurred to repair or replace damaged parts.
No Claim Bonus or NCB is offered to car insurance owners who do not make a single insurance claim for a given insurance term or year. An NCB can significantly bring down your insurance premiums, so make sure to take advantage of this benefit.
A third-party cover is a form of car insurance that provides insurance cover to the third party involved in an accident and takes care of expenses related to the damages, treatment costs and repairs of the third party involved. In India, all vehicle owners must get their vehicle insured with third party car insurance cover.
Third-party insurance only provides cover for expenses related to damage caused to a third party. On the other hand, personal accident cover is a financial cushion for you against accidents causing death or permanent disability. If you get into an accident, your car isn’t the only thing that requires immediate attention. The medical bills from your personal injury may exceed those to repair your vehicle and a personal accident cover can help you stay protected.
Comprehensive car insurance is a form of car insurance that protects you against any accidental loss or damage to the car caused by a number of unforeseen events like theft, strike, fire, explosion, natural calamities, burglary, etc. The mandatory third party liability insurance is also covered under this. Comprehensive car insurance provides a much higher range of protection as compared to basic car insurance plans.
The cashless garage facility is provided by the insurers who have a network set up with garages across the country. For example, insurer’s offering car insurance plans available on Bajaj MARKETS have a network of 4,000+ cashless garages where you can avail the car services under the policy free of cost and only pay if the expenses exceed the limits covered under the policy.
The Roadside Assistance (RSA) cover offers you emergency mechanical and electrical services at the location where your car has broken down. As a part of car roadside assistance, the insurance company also arranges for alternate modes of transportation, towing, ambulance, among other services.
You can choose to co-pay a percentage of the claim payable which will bring down your premium payments. For example, if the insurance claim is for ₹5,000 and the deductible you have chosen is ₹1,000, you will get ₹4,000 towards the claim. Effectively, you are bearing a portion of the claim. This is in place to prevent you from raising frivolous claims. Moreover, choosing deductibles in a car insurance plan can bring down your insurance premiums.
Riders or additional covers are small specific insurance plans that you can buy on top of your existing car insurance plan. For example, you can buy a personal accident rider on top of your basic car insurance plan to keep yourself safe from medical expenses incurred due to accidents.
Car theft cover is an additional rider you can purchase that provides you insurance cover against theft of your car. In case your car gets stolen, the IDV value of your car is provided to you as an insurance claim amount.
It’s important to understand all the car insurance terms and terminology before you buy a car insurance plan for your four-wheeler. Understanding these terms will help you make an informed decision when buying insurance and you can choose the features and riders you really need. In case you are looking to buy car insurance online, you can check out the various car insurance plans available at Bajaj MARKETS and choose one that suits your needs.
Yes, you can claim insurance as many times as you want, until your maximum insured amount runs out.
It is generally recommended that you do not make small claims on your car insurance as it may end up increasing your premiums in the future. However, if your car has significant damage that needs expensive repairs, then you should definitely make a claim.
Yes, your car insurance policy will go into effect as soon as you have purchased the insurance and fulfilled all paperwork.
Yes, many insurance companies these days provide short term car insurance covers. However, make sure you buy short term insurance from only a reputed insurance company.
Yes, you can buy car insurance online as most major insurance companies have started selling their insurance plans on their websites. Buying car insurance online is a fast and safe process.