A car insurance policy offers cover for accidental damage triggered to your cars and truck, or injury to the 3rd party or damage to the 3rd party’s home. A 3rd party car insurance is required in India and that’s why the majority of individuals do not’ care about going through the different terminologies of car insurance. Such negligence can trigger you the major problem while making a claim and can become a bad surprise for you. So it is really necessary to comprehend the terminologies of car insurance to get the expected benefits.
Car Insurance Terminologies So let us comprehend the 10 essential car insurance terminologies you should understand before purchasing a car insurance policy.
Insured’s Declared Value is the amount assured in the case of car insurance. It is fixed on the maker’s noted selling price at the start of the insurance policy and is later adjusted for depreciation based on the age of the vehicle. Devices which are not factory fitted in the automobile is not included in the IDV and is computed independently. The IDV for vehicles which are more than 5 years of ages is decided through the good understanding between the insurer and the insured.
2. Absolutely no Depreciation Cover
At the time of claim, a specific portion of devaluation is deducted from the IDV of the cars and truck. The rate of devaluation is based upon the age of the vehicle. Such reduction minimizes the IDV however if you go with a Zero Depreciation Cover then the company waives off the depreciation which allows you to get greater claim quantity.
3. No Claim Bonus
No claim benefit is the discount rate provided at the time of renewal of the policy for every claim totally free year. Such types of discount rate reduce the premium which you need to pay at the renewal of your car insurance policy. No Claim Bonus is expressed in percentage and varies between 20% -50%. So it is much better to prevent making claims for small damage and enjoy the advantages of your No Claim Bonus.
4. Cashless Garage
Usually, a policyholder gets his vehicle repaired at a service center and reimburse the expense later, but under Cashless garage, the insured can get his automobile fixed at the network garages of the insurer without paying anything as the expenses for repair are paid straight by the insurance company to the garage.
5. Anti-Theft Device
An Anti-Theft device is a device which decreases the threat of your vehicle being stolen. Installing an anti-theft gadget to your cars and truck not only protects your vehicle from being stolen, however, minimizes your premium rates likewise as the premium quantity for the automobile is decided upon the danger of damage and theft. However, you should understand that the anti-theft gadget set up in your automobile needs to either comply with the specifications laid out or must be approved by Automotive Research Association of India.
6. Third Party Cover
In a 3rd party insurance, the beneficiary is somebody else than the two parties associated with the contract, i.e the insurance company and the insured. The policy doesn’t give any benefit to the insured, but it offers cover for the insured’s legal liability for death/disability of the 3rd party or loss/damage of residential or commercial property.
7. Break in Insurance
A car insurance policy turns into a break in an insurance policy if you forget to restore the policy on time and permit it to lapse. You can renew your break in an insurance policy after paying the due premium and going through the vehicle assessment. If the space in between the lapse and the renewal of the policy is more than 90 days, then you lose the benefits of No Claim Bonus which you have actually earned earlier.
The endorsement is the method through which you can make changes in your policy. The modifications can be an addition to your automobile, like music system, an addition of investor’s name, modification in ownership. All such changes can be done through endorsement and be updating such info is extremely needed to obtain the benefits of your insurance policy.
9. Compulsory deductibles
Compulsory deductibles are the expenses which you are expected to bear in case of unintentional damage to your automobile and it avoids the car owner from making small claims which erase the advantage of No Claim Bonus.
10. Individual accident cover
An accident doesn’t only harms your car, however, can trigger deadly physical injuries which often leads to death and long-term impairment also. The majority of the car insurance coverage have no any integrated Personal accident cover, but you can add such cover by paying the extra premium.