In India, it is mandatory for every motorist to have at least basic insurance for their vehicle before heading out on a drive. Usually, people take the help of professionals to properly purchase a car insurance policy. This is majorly because they often lack knowledge about car insurance. However, it is always good to have a better understanding of your own policy better. This knowledge will come in handy especially when you want to buy or renew your policy on your own online. To that effect, here are the meanings of a few car insurance terms that you may come across when buying or renewing your four-wheeler insurance coverage.
Table of Contents
Third-party Insurance:
A third-party insurance policy is the most basic type of insurance without which driving on Indian roads is illegal. Your third-party insurance compensates the third-party in situations where your car causes damage to their vehicle or any injury to them.
Comprehensive Insurance:
A comprehensive four-wheeler insurance policy financially protects the insured vehicle against accidents, man-made calamities, and natural disasters. Manmade disasters include incidents of riots and theft. Natural disasters include floods, earthquakes, storms, cyclones, and other similar occurrences. The policy compensates for own damages as well as the losses incurred by the third-party involved. You can further modify your comprehensive insurance policy by including add-ons according to your preferences.
Add-ons:
These are additional covers that one can buy to supplement their basic four-wheeler insurance policy. You may have to pay a little extra to include add-ons in your policy but you can widen the scope of your coverage by opting in for these. A few common add-ons commonly preferred by most car owners are zero depreciation cover, engine protection cover, roadside assistance, and passenger cover, among others. Make sure to always review your need for coverage during insurance renewal and fill in any gaps with the help of suitable add-ons.
IDV: (Insured Declared Value)
IDV is the current market worth of the insured vehicle car insurance. This value decides the maximum compensation that the policyholder will get in case their car gets completely damaged or stolen.
NCB: (No-claims Bonus)
NCB is the reward that the policyholder gets from the car insurance provider for not making any claims in the previous policy year. This reward is given as a discount on the premium paid for coverage.
Network Garage:
Four-wheeler insurance companies are affiliated with different repair shops and garages. These are known as network garages. A car owner can benefit from cashless repair when settling their claim by getting the vehicle fixed at any of the network garages listed out by the insurance company.
Deductibles:
The deductible is a pre-decided amount that you will have to pay from your own pocket during a claim. There are two types of deductibles – the voluntary deductible and the compulsory deductible. The voluntary deductible can be decided by you; a higher voluntary deductible will lead to a reduction in your premium. The compulsory deductible is the amount that you will have to pay as a part of your car insurance claim mandatorily. The value of compulsory deductible is decided by the cubic capacity of your car.
Make sure to be well-versed with these terms before you buy or renew your four-wheeler insurance policy. Remember that you can easily opt-in for an online policy to save yourself a lot of time and effort. Hope this article has been useful to you. Good luck!
