Most of us get Car Insurance for our vehicles only because it’s a necessity, right? You can’t have a car on the road without insurance (unless you want the police waving you down).
All right, so you got your Car Insurance. Soon you find you need to make a claim on your policy and you leaf through those Insurance documents. But wait, what are all those terms listed there? “Third-party cover”? This car is mine and only mine, right?
Don’t look so confused. We’ll help you decode the most popular Car Insurance terms. Read our Car Insurance dictionary.
Insured Declared Value
Insured Declared Value (IDV) is the current market value of your car. This is the maximum sum payable by the insurer for your Car Insurance policy. In case your car is totally damaged or stolen, the IDV is the maximum amount you can claim from the insurer.
When you buy or renew your Car Insurance policy, do not quote an IDV that is lower than the market value of your car. If you do, you will get inadequate compensation for the loss or damage to your vehicle.
Own Damage Premium
This is the premium that you pay to get insurance cover on your car. Own Damage Premium (ODP) insures your car against any loss caused by events outside your control. Earthquake, fire, tsunami? With Own Damage Premium, you’re secured.
Remember that the ODP varies according to the model, cubic capacity and geographic zones of your vehicle. You must ask your insurer about this.
Zero Depreciation Cover
With Zero Depreciation Cover, the insurer waives off the depreciation on replaced parts in your car. This gives you a higher claim amount.
No Claim Bonus
A No Claim Bonus (NCB) is the discount you will get if you do not make a claim on your insurance for a year. The No Claim Bonus lowers the insurance premium that you need to pay when you renew your policy.
If you are getting a new car, did you know you can transfer your No Claim Bonus?
A Third-Party Cover protects the vehicle owner against any financial liabilities that could occur as a result of death, physical injury or damage to property of a third party.
A victim can file a third-party cover claim against the vehicle owner and the insurer will pay for the claim on behalf of the vehicle owner.
Third-Party Cover is mandatory as per Indian Law, so make sure you get this included in your policy.
Personal Accident Cover
Personal Accident Cover financially protects you against unforeseen events such as Accidental Death or Permanent Total Disability from a road accident.
Not every Car Insurance policy includes Personal Accident Cover so it is important that you find one that does.
Next time you’re buying or renewing your Car Insurance policy, don’t have a blank look on your face when you read those papers. We hope this was helpful.