For those venturing into the realm of motor insurance in India for the first time, deciphering the plethora of technical terms and jargon can be overwhelming. To facilitate a smoother understanding of the intricacies involved in this domain, it is essential to delve into key terms associated with motor insurance. By gaining familiarity with these terms, individuals can navigate the complexities of the insurance landscape with greater ease and confidence.
Third-Party Liability Insurance
Third-party liability insurance, often called third-party insurance, shields you from legal obligations if your vehicle unintentionally causes harm to a third party’s property, vehicle, or person. The first party is you, the vehicle owner; the second is the insurance company; and the third is anyone or anything affected by your vehicle.
While damage to your car isn’t covered under third-party liability insurance, it’s a mandatory requirement under India’s Motor Vehicles Act of 1988. This insurance ensures compensation for losses suffered by a third party due to your accidental actions, like damaging another car’s bumper or someone’s bike. Claims are subject to terms and conditions set forth under the motor insurance policy. *
Comprehensive Policy
A comprehensive policy is an all-encompassing bike insurance policy that covers damages to third parties and protects your vehicle against losses from accidents, theft, fire, or natural disasters. This policy offers extensive coverage, customisable with add-ons like zero-depreciation and breakdown assistance, though the premium is higher. Despite the cost, the benefits make it a worthwhile investment. Make sure you renew your bike insurance on time for uninterrupted coverage. Claims are subject to terms and conditions set forth under the motor insurance policy. *
No Claim Bonus (NCB)
The No Claim Bonus (NCB) is a concession on your motor insurance premium rewarded by insurance companies if you have yet to file any claims in the previous year. The concession increases yearly without a claim, ranging from 20% to 50%. You can transfer your NCB when switching insurance plans or selling and buying a new car. Renewing your insurance on time ensures the continuity of your NCB. Claims are subject to terms and conditions set forth under the motor insurance policy. *
Insured Declared Value (IDV)
The Insured Declared Value (IDV) represents your car’s market value and is the maximum sum your insurance provider will pay if your vehicle is destroyed or severely damaged. Calculated by depreciating the manufacturer’s selling price based on the vehicle’s age, it also includes the value of externally installed accessories. Accurate determination of your car’s IDV is crucial to avoid underinsurance and impacts your premium.
Zero Depreciation
Depreciation reflects the decrease in the actual value of your car and its components over time due to wear and tear. Zero depreciation, an add-on benefit, ensures yourcar insurance provider doesn’t deduct depreciation from the amount paid for repairs or replacement. While this add-on may increase your premium, the advantages outweigh the cost, as it maintains the total value of your car and its components, regardless of age. Claims are subject to terms and conditions set forth under the motor insurance policy. *
Familiarising yourself with these key terms empowers you to make informed decisions when selecting motor insurance for your vehicle in India. Whether opting for third-party liability or comprehensive coverage, understanding NCB, IDV, and zero depreciation ensures you choose the policy that aligns with your needs and safeguards your vehicle effectively.
*Standard T&C Apply
Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
