Decoding your motor insurance policy

For most Indian families, a private vehicle means independence and an easy commute. From two-wheelers to four-wheelers, every Indian family owns at least one car or bike to move around the city. As per Indian law, every vehicle owner must have at least third-party insurance. However, navigating the terms in your policy documents can seem like decoding a code. So, we’re here to help! Here’s our complete guide to the most crucial motor insurance terms to know.

While reading through your motor insurance policy, you may wonder - what is NCB in insurance, or what is no claim bonus in bike insurance? Here’s our ultimate guide to motor insurance jargon that every Indian should know.

No Claim Bonus, or NCB, is a reward for responsible driving. Your insurance company offers a bonus for every year that you do not file a claim. Typically, you enjoy a discount on your insurance premium for the following year. You gain an additional bonus for every subsequent year you do not file a claim. Understanding the intricacies of NCB is crucial, as it can significantly impact the cost of your motor insurance. While reading the policy documents, you may wonder what is protected no-claim bonus on car insurance. A protect NCB add-on helps you retain your car insurance with no claim bonus even after you have to make a claim. The policy will outline how many and what types of claims are allowed.

Zero depreciation, often known as zero dep, is a popular add-on for motor insurance policies. Zero dep insurance helps look after the difference between the cost of a new part and the depreciated value of an old part. Once you take your vehicle out of the showroom, the value depreciates. Should you meet with an accident, the insurance company will cover the cost of the depreciated value of your vehicle. With this add-on, you receive a higher claim amount, making it the ideal way to protect your new car or bike. While purchasing a policy, you might wonder - how to know if my car insurance is zero dep. Most often, you can choose zero-dep coverage as an add-on. If you’re wondering how to check zero dep insurance in policy, you should read your policy documents carefully. It will list your coverage and add-ons.

The engine is the heart of your vehicle. Protecting it is paramount. Engine protection cover is an add-on that provides financial assistance for repairs or replacements in case of damage to your car’s engine. Given the potential costs associated with engine repairs, opting for this cover is a wise decision for comprehensive protection. Like zero dep, engine protection is often available as an add-on coverage with your base motor insurance plan.

Roadside assistance is like a guardian angel on every journey. It provides prompt assistance if you get stranded due to a flat tyre, dead battery, or other mechanical issues. At Zuno, we offer one of the best roadside assistance policies with our motor insurance plans. You can purchase roadside assistance for bike and car policies to ensure coverage on every road trip. As part of the coverage, you will get towing assistance, flat tyre assistance, battery jumpstart, and more.

Third-party liability coverage is a crucial component of motor insurance in India. The Motor Vehicles Act of 1988 made it mandatory for all vehicle owners. Third-party liability coverage protects individuals against the legal and financial consequences of an accident involving a third party and their property. Here, a third party refers to any person other than the policyholder and the insurance company.

The IDV refers to the maximum sum insured amount the insurance company will pay in case your vehicle gets stolen or damaged beyond repair. It represents the current market value of the car and bike. Insurance companies use the IDV as the basis to calculate the premium for the insurance policy. A higher IDV could mean a higher premium. The IDV is calculated based on the manufacturer’s listed selling price of the vehicle minus depreciation. Depreciation accounts for the wear and tear of the car or bike over time. The older the vehicle, the higher the depreciation, resulting in a lower IDV.

Your motor insurance policy is more than just a legal requirement in India. It is a safety net for your financial well-being. At Zuno, we offer customisable motor insurance plans for two-wheelers and four-wheelers. You can browse our offerings and select the ideal add-ons based on your needs. By understanding these crucial motor insurance terms, you can make informed decisions about your policy and get the best fit for you and your vehicle.

ARN: Zuno/Blog/Decoding your motor insurance policy/02/24/02.

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