Definitions Of Terms Used In Car Insurance

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Like all other businesses, insurance uses specialised language that is frequently difficult for the average person to grasp. Given below are some of the common terms and their explanations. 

  1. Broker – An insurance salesperson who talks to agents and companies to find the right insurance policy for customers. *
  2. Car insurance calculatorA car insurance calculator is an online tool that lets you calculate the premium of four-wheeler insurance for your vehicle. *
  3. Claim – An insurance policy owner asks the insurer to pay for the loss covered under a policy. Your claims are known as “first-party claims”. A claim against the other person’s insurance company is called a “third-party claim”. *
  4. Collision coverage – A comprehensive insurance plan covers the damage to your vehicle caused by a collision with another car or object. It is often required if you have a car loan. *
  5. Comprehensive physical damage coverage – It is an optional four-wheeler insurance that covers the damage to your car caused by something other than a collision or road accident. This includes theft, fire, flood, hail, or vandalism. This, too, is often required if you have a car loan. *
  6. Conditions – These are a part of every insurance policy. They state the obligations of the insurance owner and also those of the insurance company so that the policy can be in effect. *
  7. Insured Declared Value (IDV) – The IDV of the vehicle is the depreciated value of the vehicle. The IDV is agreed to by both the policyholder and the insurer. This reduces with age. The vehicle premium is calculated on the basis of it.*
  8. Liability coverage – Offers a significant sum to cover medical expenses. Usually, these figures are divided into three parts: the first one represents the maximum amount your insurance may pay an individual, the second represents a cover to all individuals, and the third one covers the damage to another vehicle or property during the collision. *
  9. No Claim Bonus (NCB) – A No Claim Bonus is offered on car insurance renewals if you don’t make a claim during the previous policy period. Insurers reward policyholders by giving them substantial savings on the Own Damage Premium. However, this is only valid only if the car insurance renewal is done within 90 days of the previous policy’s expiration date. *
  10. Own Damage Premium (OD) –  Paying OD premium allows you to claim compensation in the event of damage or theft of your vehicle due to an earthquake, fire, etc. *
  11. Personal accident cover – It covers you against accidental death, permanent total disablement (PTD), terrorism and acts of terrorism. *
  12. Policyholder – This refers to the owner of the policy.
  13. Policy period – It is the period when the policy is active.
  14. Premium – The amount a policyholder agrees to pay the insurer in exchange for covering the risk. *
  15. Proof of loss – Documents to support your request for payment of losses. The company uses these to determine whether and how much it may pay. Examples of these documents are written repair estimates from auto body shops, police reports, etc. *
  16. Representative – An insurance salesperson or an individual who works for or on behalf of an insurance company;*
  17. Uninsured motorist coverage – Uninsured motorist coverage can pay for the injuries caused to you and damage to your property following an accident, and the driver at fault does not own valid insurance.*

* Standard T&C Apply 

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.

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