5 Car Insurance Terms you should be Aware of

Most of the car-owners in India avail car insurance policy just because they have to. There are hardly any car-owners around with a real interest in a car insurance policy. However, such ignorance about car insurance can prove to be fatal in the later stages, especially at the time of claim settlement. Many car-owners start checking their car insurance policy wordings only when they need to file a car insurance claim and they find many car insurance terms beyond their level of understanding. This is why you should be aware of the meaning of some of the most common car insurance terms. The following are a set of car insurance terms that you have to understand to have a clear idea about your car insurance policy wordings.

Insured Declared Value

The IDV or the Insured Declared is the market value of your insured car. This is the maximum sum you can ensure your car for. At the time of a car insurance claim, you can also claim up this claim. In case of total loss of the vehicle or theft, the car insurance online provider will provide you with with the total IDV amount.

Own Damage Premium

Own Damage Premium or OD Premium of a car insurance online plan is the premium that you pay to cover damages to your own vehicle. OD Premium is applicable in case of a comprehensive car insurance policy because liability only cheap car insurance plans don’t cover losses incurred to the vehicle of the policyholders. The amount of Own Damage Premium depends on many factors such as cubic capacity, seating capacity, type of engine and also on the zone where the car is registered.

Third party coverage

In car insurance terms, third party coverage implies the coverage that is designed to protect the car insurance policyholders from their liabilities to third parties on the road in case of a road accident. In India, a motor insurance plan with third party coverage is a legal requirement. Third party coverage also makes a share of the total premium of car insurance quotes. A cheap car insurance plan with third party coverage only pays out financial compensation in case of third party death, accidental physical injuries and property damage.

Personal accident coverage

Personal accident coverage is also a part of coverage of car insurance quotes. In this type of coverage, the owner-driver of the car insurance policy remains financially covered in case of death and physical disablement. The personal accident coverage pays out financial compensation up to a permissible limit in case of unfortunate death and temporary or permanent and total or partial disablement. The personal accident coverage can be extended to paid driver and passengers of the insured car for an additional premium on car insurance online plan.

NCB

NCB or No Claim Bonus is the bonus that car insurance policyholders are entitled to get for not making any claim on their car insurance online plans in an entire policy year. Starting from 20% in the very first year without claim, the amount of NCB keeps increasing for 5 years up to a limit of 50%. Car insurance policyholders make the most of the NCB by reducing their premium outgo.