One of the most important papers you should always have with you when you take your four-wheeler out for a spin is car insurance. The 1988 Motor Vehicles Act mandates that every four-wheeler operating on Indian roads must possess a minimum of third-party four-wheeler insurance. Driving without insurance is against the law. You must therefore purchase a suitable car insurance policy for your prized set of wheels.
However, a common problem experienced by customers who wish to buy car insurance is not understanding the scope of coverage as well as the car insurance terms and conditions. Adding fuel to the fire is the technical jargon and car insurance terms used by insurance providers. Finally, this makes it challenging to make use of the policy. Therefore, it is a good idea to become familiar with the most common car insurance jargon before purchasing a car insurance policy.
At Tata AIG, we offer the finest car insurance plans for you at affordable rates to keep your four-wheeler protected against all sorts of financial and legal worries. Be it basic third-party coverage or comprehensive four-wheeler insurance, you can have it all from us. If you wish to buy car insurance online, you can visit our official website and go through the wide array of plans and select the one that best suits your needs.
Anyway, in order to help you make an informed choice, we have penned down some of the most frequently used car insurance terms. Continue reading to learn more.
Important Car Insurance Terms That You Should Be Aware of
We walk you through some of the essential car insurance terms that you must know before purchasing four-wheeler insurance. Let us begin.
- Third-Party Insurance
Every four-wheeler owner is required by law to carry at least third-party insurance, which is basic coverage. This policy pays out in the event of accidental harm, demise, or property damage to a third party. Due to the fact that it doesn’t cover the policyholder’s own damages, this insurance is also known as a “liability only” insurance or “act only” policy.
- Own-Damage Cover
In the event of an accident, Own Damage Cover includes compensation for the harm done to both you and the third party. This provides substantial coverage for four-wheeler damage, but you must check your policy to confirm the coverage. An Own Damage cover allows you to receive reimbursement for any harm done to your four-wheeler in an accident.
- Comprehensive Insurance
This plan is basically an all-inclusive one since it covers both third-party and own damage. Comprehensive insurance is more effective because it pays for damages caused by man-made or natural disasters.
The moment a car leaves the dealership, its value starts to decline. The value of the car decreases over time as a result of wear and tear. When a vehicle is stolen or completely destroyed, depreciation is determined by taking into account the age, mileage, and general condition of the vehicle.
- Legal Liability
In the event that a third party sustains losses or damages as a result of a car accident, you are held financially responsible. This policy will assist in meeting the mandate to compensate third-party losses under the law.
- Insured Declared Value (IDV)
IDV stands for the maximum insurance claim that the policyholder will be entitled to in the event that the car is totalled or stolen. The ex-showroom price, as well as the four-wheeler’s depreciation value, are used to determine the IDV of the vehicle. To obtain insurance coverage, policyholders must pay a premium, and this premium amount is based on the vehicle’s Insured Declared Value.
- Network Garages
The policyholder has the option to submit a claim when a four-wheeler needs to be repaired. Some insurance providers offer a cashless claim procedure in which they pay the garage directly. If an individual wants a cashless claim process, they can approach a network garage because insurance companies only provide this service in a select few garages referred to as “network garages.”
The policyholder must pay this sum in order to start the claims process. There are two different kinds of deductibles: voluntary and compulsory. Voluntary deductibles are not required, but compulsory deductibles are. An individual may volunteer to pay for this and contribute to the claim pay-out.
- Add-on Covers
You can choose to purchase these insurance covers separately by paying an additional rider premium. If you have comprehensive four-wheeler insurance, you may expand its scope of protection by picking the right add-on policies. Zero Depreciation or Bumper to Bumper car insurance, Roadside Assistance, Engine Protect, and NCB protect are some of the many add-ons covers you can pick for your four-wheeler.
It’s an upgrade made to a four-wheeler insurance plan’s coverage after its commencement. It may be non-premium bearing or premium-bearing. Non-premium-bearing endorsements are generally made when there’s a modification to the vehicle registration number, nominee details, customer address, contact information, etc. Premium-bearing endorsements include the addition of an LPG/CNG kit, transfer of ownership, anti-theft device removal, electrical accessory installation, car’s ex-showroom price correction, and so on.
You must pay a monthly premium for four-wheeler insurance in order to keep your car protected from theft, accidents, fires, and other issues. You must pay a set premium as a policyholder, and the insurance provider protects you from losses in exchange for your payment.
- Policy Period
The insurance policy’s coverage period starts on the day the policyholder purchases it. The policy period is the time frame starting on the first day of the policy till the last date prior to expiration.
The Key Takeaway
With the car insurance terms mentioned above, you’ll be able to untangle the outcomes or procedures listed in a four-wheeler insurance policy document. It’s essential to carefully read the policy terms and conditions, if necessary, request clarifications from the insurer.
With Tata AIG, policyholders can choose from a variety of car insurance policies with numerous add-ons to customise their plans in order to ensure complete satisfaction in the event of an emergency. Contact us to take this alliance forward.