10 Essential Car Insurance Terms You Need to Know

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Are you unfamiliar with the idea of insurance, and do you find the world of investing confusing? Don’t worry, especially because car insurance terminology is simple and easy to understand. When you buy four-wheeler insurance, it’s usually advisable to do your research so that you can effectively protect both your car and yourself. It can assist you in becoming more familiar with the terms and conditions of your auto insurance policy, ensuring that you are aware of all the coverage inclusions and limitations. You will quickly become an insurance expert with the help of our glossary of terminology for car insurance.

1) Third-Party Liability Coverage

All owners of vehicles must obtain third-party liability coverage to legally operate on Indian roadways. In the event of a regrettable accident involving the insured vehicle, the policyholder is financially protected against responsibilities to third parties under third-party auto insurance. Unsettling situations like a third party’s death or injury can be handled by your insurance company with third-party four-wheeler coverage. The covered member is also protected from liability resulting from property damage to third parties.

2) Comprehensive Coverage

 As the name implies, comprehensive car insurance provides a more complete level of protection than third-party liability. While comprehensive four-wheeler insurance is not required, it is always advised that all owners of vehicles have this coverage. This is so that the insurance company can handle both third-party and property damage to the covered car when there is comprehensive coverage. If you don’t have comprehensive coverage, you will be responsible for paying for any damages to your car out of pocket, which will take a big bite out of your funds. Tata AIG’s comprehensive auto insurance shields the policyholder against a variety of unpleasant roadside situations, including accidents, natural disasters, and man-made tragedies like fire, theft, etc.

3) Four-Wheeler Insurance Premium

A service provided by an insurance firm is insurance. The owner and the car are shielded from unfavorable roadside incidents by this service. The policyholder pays the insurance firm a predetermined amount, known as the insurance premium, in exchange for this service. Several criteria, including the driver and the vehicle’s type and model, affect the amount of premium that the policyholder must pay. It is advised to compare the premium and the coverage provided when purchasing insurance to get appropriate coverage at a fair cost.

4) Insured Declared Value

One of the most crucial things to take into account when it comes to insurance is the insured stated value or IDV. It refers to the highest amount of coverage that your insurance company will offer you if your car is completely lost or stolen. IDV stands for the current market value of your car, to put it simply. The amount of the premium is closely correlated with your car’s IDV. The amount of premium that must be paid increases with IDV.

5) Deductibles

This is the sum that the policyholder will have to pay out of pocket when the insurance claim is settled. The insurance company pays the remaining sum. There are two types of deductibles required and optional. An obligatory deductible is a sum that the policyholder must pay each time they file a claim. The engine cubic size of your car determines the mandatory deductible.

Conversely, a voluntary deductible is a sum that the policyholder knowingly decides to pay out of pocket to resolve the claim. For your vehicle insurance, you have the option to purchase it with zero optional deductibles. On the other hand, your premium payment will go down if you choose a greater optional deductible.

6) No Claim Bonus (Ncb)

The NCB is a benefit or discount that is given to the policyholder when their policy is renewed. However, only those insurance holders who did not file a single claim throughout the policy are eligible for this reduction. When an individual has not filed a claim for five years in a row, the NCB accumulates, allowing insurance holders to receive a discount on their premiums of up to 50%. When a policy is renewed, the NCB may also be moved from one insurance company to another.

7) Cashless Claims/Garages

A reputable insurance company will typically have an approved network of garages. An insurance customer will not be required to pay out-of-pocket if they choose one of these authorized service shops to fix their car. Your insurance company directly settles the claim. For the policyholder, this is quite convenient because it eliminates the hassle of gathering and submitting paperwork to the insurance company to get paid for the repairs.

8) Policy Endorsements

Endorsements are modifications made to an auto insurance policy once it has been issued. Additionally, endorsements fall into two categories: