Car insurance policies provide financial protection against unforeseen risks. It protects you and your vehicle against the losses incurred due to theft, accidents, or third-party property damages. Therefore, you must buy the right car insurance for you that offers you the best coverage.However, before buying or signing the policy document, there are some terms that you must understand.
Here are the seven basic terms you must know before buying car insurance.
- Insured Declared Value (IDV)
IDV is the current market price of your vehicle. Precisely, IDV is the highest amount that the insurer can pay in case of contingencies like your car getting stolen. The sum insured that the insurer has to pay you, is decided based on your IDV. Therefore, make sure you declare the correct value for your car. IDV can be decided on the manufacturer’s listed selling price and the depreciation at the time of renewal.
- Third-Party Legal Liability
The third party is any person who faces death, injury, or property loss because of the car accident. In case of an unfortunate event like an accident, or a physical damage to the third party, you must pay for their financial losses.All car owners are required to buy third party car insurance as it is mandated by law.
- Comprehensive Policy and Own Damage Premium
In addition to purchasing a Liability Insurance, you must get your car insured against anydamage or loss. Comprehensive policy is the one that covers the third party liability and the charges for replacement of your car parts due to uncontrolled events. In such policies, you receive coverage not only for liability insurance but also for your own damage. Own damage premium will help you claim for the losses your vehicle suffered due to the accident.
- Personal Accident Cover
If your car meets an accident, it is not only the car that suffers the damage. You can be severely injured or may lose your life.Therefore, you must invest in a personal accident cover. It will help you in getting the best treatment without worrying about the expenses.
- No Claim Bonus (NCB)
No Claim Bonus is a bonus that the insurer rewards to the policyholder for not making any insurance claim in the preceding years.
Avoid making small claims for petty reasons like dents or scratches. Keeping this in mind, will help you make the most out of your No Claim Bonus.
- Voluntary Deductible
The deductible is that part which the insured needs to pay and the insurer will pay the balance claim.
- Network Garages
In most cases, the insured gets his car repaired at a service station or garage of their own choice and then file for reimbursement. But under cashless garage benefit, you can get your car fixed at the garage or service station affiliated with the insurer without paying from your pockets. To avail cashless benefits, opt for network garages provided by the insurance company.
The main reason behind buying car insurance is to cover you against the risk of various damages, theft, and accidents. Therefore, it is essential to select the right and comprehensive coverage along with reasonable annual premium.