It has become extremely necessary today to secure one’s car with a good insurance policy. If not, you will have to bear repair expenses yourself in case your vehicle gets involved in an accident. According to the Motor Vehicles Act, 1988, it is mandatory for all vehicles plying on Indian roads to at least have a third party insurance plan. Under this insurance plan, you receive compensation if there is a case of death or injury to the third-party.
On the contrary, if you purchase comprehensive car insurance, it will not only provide you the benefits of the third-party policy, but also offer protection against man-made calamities like riots, acts of terrorism, vandalism, etc., as well as natural calamities such as floods, earthquake, fire, etc. It is always better to have proper insurance coverage and stay insured rather than spending on these expenses from your pocket.
However, before you avail car insurance, here are a few terms that you must know:
- Third-party cover
With third party car insurance coverage, any damages caused to the third-party’s person or property by your car is covered. Compensation is offered to the third-party to recover losses.
- Comprehensive cover
This cover is extensive and offers protection to both parties involved in accident. This policy will cover own damages as well as look after the third-party liabilities. Also, you can always enhance this cover as per your needs by choosing add-ons such as engine protector, lock and key replacement cover, 24×7 roadside assistance, etc.
- No-Claim Bonus
When you don’t make any claims in your policy term, you become eligible for a concession on your premium during car insurance renewal. The maximum concession you can receive is up to 50%. Therefore, it is advised not to make small claims and disturb your accumulated NCB.
- Insured Declared Value
Insured Declared Value (IDV) is the current market value of your car. In case of theft or total loss of your vehicle, you receive the IDV of your car by your insurer. As your vehicle ages, its value decreases which leads to depreciation. The post-depreciation amount is given to you in the form of IDV. If the IDV is low, the premium to be paid will be low too.
If you want to receive the actual amount of your vehicle and not a depreciated one, then you can opt for the Zero Depreciation add-on cover. With this add-on, depreciation won’t be applied on parts such as glass, fiber, tires, etc.
- Personal Accident Cover
Road accidents in India are on the rise, making it imperative to have an adequate car insurance policy with sufficient coverage to safeguard yourself from unforeseen events. In case you meet with an accident, your nominee receives compensation under the personal accident cover.
Above-mentioned were some important insurance terms that every individual needs to know before purchasing a car insurance policy. You can also buy motor insurance online in a few easy steps. Going online for this activity is smart because it saves you from spending both time and money on the middle men. You can complete the entire procedure yourself from the comfort of your home.
Apart from these, if you have queries regarding any other term, you can simply visit your insurer’s website and read about the same. Also, when you receive the policy documents, it is essential that you go through the terms and conditions along with the inclusions and exclusions of your insurance policy to avoid making mistakes during claim.