When looking for the best car insurance for your newest possession, it is imperative that you compare various quotes before buying a particular policy. Well, there are a number of articles available on the web that will guide you how to pick the right motor insurance, what factors to consider, how to compare the quotes and so on. But what if you are not aware of the various terms being used in the insurance brochures? Don’t get confused; instead, go through the important insurance terminologies and make a purchase that suffices to your interests.
Here are some of the important terms you will come across in your insurance prospectus
1. Insured Declared Value (IDV)
IDV refers to the existing market price of your vehicle and is used to determine the sum insured or the highest amount, which your insurance firm is liable to pay you, in case your vehicle gets stolen or damaged beyond repair. Don’t forget to declare the actual IDV when getting online motor insurance.
2. Third Party Legal liability
It is important to know that in terms of an insurance policy, the insured person is considered as the first party, while the insurance company is listed as the second party. The third party, on the other hand, refers to the person who suffered death/injury/property damage due to an accident caused by your car. Third party liability insurance is mandatory in India and will compensate the third party for all the financial losses.
3. No Claim Bonus
No claim bonus is a discount that the insured person receives at the time of policy renewal for every claim free policy year. The insured is eligible to get a minimum 20% and maximum 50% discount as no claim bonus. In the case of making a claim in any policy year, there is a loss of no claim bonus.
4. Personal Accident Cover
When involved in an accident, it is not only your vehicle that gets damaged, but you also suffer injuries. Sometimes the accident is so fatal that it can cause permanent disability or death and so personal accident cover is an integral part of your policy.
5. Cashless Garage
Under ordinary circumstances, the insured person gets his car repaired at a nearby service station and later the expenses are reimbursed by the insurance venture. But with motor vehicle insurance cashless facility, you can get your car repaired at a garage the insurance company has tied-up with and later the insurer pays the claim amount he is liable to, directly to the garage. Before taking your car for an accidental repair, make sure the garage is enlisted in your policy.
The main purpose of motor insurance is to provide you with adequate coverage against accidental damages and third party liability. Choosing the right insurance especially for the first-timers is a difficult task. But keeping yourself abreast with these important insurance terminologies will definitely make the process easy and simple.