Although car insurance is imperative, choosing the right one can be complicated. There are so many terms and conditions thrown at you and so many policy papers to read through. In order to compare car insurance and opt for the most suitable one for you, you need to be aware of certain terms and what they mean. Here is a helpful guide on the same.
1) Zero Depreciation Cover
It is recommended that you go for a zero depreciation add-on cover. Under this type, the buyer need not pay the depreciation amount in case of a claim. A motor insurance claim on a standard insurance policy deducts depreciation on replaced parts whereas, in a zero depreciation cover companies pay for the entire claim amount. This helps you get a higher claim amount. When you compare car insurance, it is best to choose Zero Depreciation Cover as the claim amount is on the higher side.
2) Insured Declared Value (IDV)
IDV is the present market value of your vehicle and is a frequently used insurance term. It basically refers to the maximum amount payable by the insurer for a particular insurance policy if the car is totaled or stolen. In case of any major loss to your vehicle such as a theft or irreparable damage, IDV tells you about the maximum amount that you can claim. Do not quote an IDV that is below your vehicle’s actual market value.
3) No Claim Bonus (NCB)
NCB is the discount you can avail when you have not made any claim in the previous year. It’s like a prize you obtain for driving your vehicle meticulously. It helps to lower the insurance premium you need to pay at the time of policy renewal. In the beginning, the NCB amount can be very high say 20% and rise to 50% for the sixth year. You can benefit from not registering a claim for small damages.
4) Personal Accident Cover
This cover not only protects your vehicle but financially safeguards you from unexpected circumstances such as a permanent disability caused by a road accident, bodily harm or accidental death. All car insurance policies do not include personal accident cover. You need to make sure that yours does.
5) Third Party Cover
Add-on plans offer insurance for several damages which also includes own damage and third party liability insurance. The vehicle owner is safeguarded against any financial liability in cases of death. The owner is also secured against damage to the property of a third party or physical injury. It covers third party problems, that is, it proves advantageous to someone other than the two parties involved. For instance, a victim can file a complaint against the vehicle owner and the insurer will pay for the claim on the owner’s behalf. This cover is mandatory according to the Indian Law, so make sure it is part of your insurance contract.
If you’re buying or renewing your insurance contract, it is best to compare car insurance, weigh the pros and cons of each insurer and then make a calculated decision.