To acquire the right motor insurance and get the best benefits from it, you should know and understand a few terms in the automobile insurance world. These terms might appear confusing at first but they will get simpler as time goes on.
It’s not all about picking the best automobile insurance alone but also ensuring you get the best benefits from it and it suits your budget beautifully well. While things like IDV, OD, or comprehensive cover might sound very confusing if you are buying a policy for the first time, knowing their meaning is sure to make a world of a difference.
We have carefully compiled 8 key terms to help you as you make this decision.
1. COMPULSORY DEDUCTIBLES
The owner of an insured car is mandated to pay the deductible fee when he/she files for a claim for damage to the car.This cost is incurred by the insured to prevent the insured from making fake claims.
A car can be damages due to many other disasters like theft, vandalism, earthquake, lightening, terrorist activities and a lot more. This cover is necessary in case of other circumstances.
3.IDV- INSURED DECLARED VALUE
This insurance package is a very vital in the terminology. This package gives reimbursement on the current market price of your vehicle. In case of theft or loss that is beyond repair, the total amount of the car is replaced by the insurer.
This Insurance does not benefit the insured in any way. It is mandatory for each vehicle owner to have this insurance as per Motor vehicle act.This coverage pays for any damage to 3rd party property, vehicle, or person.
In this insurance package, all expenses incurred during replacement and repair of your vehicle shall be covered. This package covers both 3rd party liability for injury, property damage or death and the insured vehicle.
6. NCB (NO CLAIM BONUS)
This is a very popular term in the automobile world. This bonus is given when no claim is filed throughout period of insurance.It can be up to 50% of the OD premium depending on the number of years in which you haven’t filed any claim.
When you take your vehicle to the garage to get it repaired, you pay from your pocket. In this case, the insurer reimburses you the total amount used for repairs.
Some insurers own repair garages, and when you repair your vehicle at these garages, you are required to pay only your deductible and any extra charge, the rest is paid by the insurer.
The amount to be paid from your pocket can be increased in case of an accident so that you reduce the OD premium.
Apart from the deductible, some people choose to spend more out of their own pockets which in turn decreases the premium to be paid.
Knowing these auto insurance terms makes you a better auto insurance consumer. You can compare prices and coverage with confidence.