November 21, 2019 • Car Insurance
5 Important Motor Insurance Terms
1. Insured declared value
Insured declared value (IDV) refers to your vehicle’s current market value. In case of theft or loss of vehicle, your insurance provider is liable to provide an amount equivalent to the IDV of your vehicle. IDV is generally calculated based on the age of the vehicle as well as the rate of depreciation.
2. No Claims Discount
As the name suggests, No Claims Discount (NCD) refers to the discount that you may receive from your insurance provider for not making any claims in the previous policy year. NCD, therefore, acts as a reward for safe driving. You may avail of this discount while renewing your insurance policy in the subsequent year.
3. Third party insurance cover
Third party insurance covers the policyholder’s financial liability for disability or death of the third party, as well as, damage caused to third party property. Third party cover is the minimum level of coverage mandated by the law in India.
4. Personal accident cover
A personal accident cover provides coverage against an unfortunate event of an accident. Such a policy offers financial protection against repairs to your vehicle, as well as bodily injuries, permanent disability, and even death in case of an accident. It is advisable to secure a personal accident cover as you may have peace of mind knowing that you are covered in the case of a mishap.
5. Comprehensive policy
A comprehensive motor insurance policy offers overall financial coverage against damages to both the parties involved in an accident. Such a type of insurance plan covers natural disasters such as tornado or hurricane, as well as manmade calamities such as fire or theft. It is important to note that a comprehensive insurance policy covers legal liability to third party, damages to own car, as well as personal accident cover.