Rev Up Your Knowledge: Essential Four-Wheeler Insurance Terms You Need to Know!

You must have auto insurance coverage to drive a vehicle in India. Purchasing the right car insurance policy  for your vehicle can seem confusing. While reading through policy documents, you may see words you have not seen before. Luckily, we’re here to help. Let’s look at some terminologies of four-wheeler insurance that you must know.

Every car owner must have third-party liability coverage. You can opt to purchase a third-party liability-only policy or get coverage as part of your comprehensive car insurance plan. Third-party liability protects you when another individual or their property gets damaged after an accident. The insurance policy helps pay for the third party’s damages. If you do not have this coverage, you could get fined.

When purchasing insurance, you will come across IDV value in insurance. The IDV refers to your vehicle’s value at that point. Every year, the IDV changes based on depreciation. The IDV in car insurance also refers to the maximum amount the insurance company will pay if your vehicle gets stolen or damaged beyond repair.

Every car insurance policy has a mandatory deductible. It refers to the percentage of each claim amount you, the policyholder, must pay. Assume your policy stipulates a deductible of 5%. On a claim of INR 15,000, you’d have to pay INR 750 towards the entire claim amount. Some vehicle owners choose a voluntary deductible as well. They increase the deductible amount in exchange for a lower premium. So, you can opt for a deductible of 10% and pay INR 1,500 for a claim of INR 15,000.

Your car insurance company rewards you every year you do not file a single claim. The NCB offers a reduction on your premium amount for the following year. For every subsequent year you maintain your claim-free status, the company increases your NCB for car insurance. If you’re purchasing a new car or switching from one insurance company to the next, you can port your NCB.

Own damage car insurance coverage helps with the cost of your vehicle's repairs. Comprehensive plans provide this coverage along with the mandatory third-party liability required. The sum assured for your own damage policy gets calculated based on your car's IDV, which impacts your annual premium.

You can customise your insurance policy with add-on covers. Every insurance company provides a range of add-ons that you can choose from to enhance your coverage. Some add-ons, like zero depreciation cover and engine protection, make a lot of sense to every car owner. Others only make sense in certain situations. Roadside assistance, for example, would only be helpful if you often take long drives in your car. If you only travel within the city, it may not be worth it. Each add-on comes at a cost that gets added to your premium amount. It’s always a good idea to evaluate your needs and select add-ons accordingly.

Once you understand these b, you can make an informed decision about your policy. You can purchase a plan for your vehicle online within just a few minutes. Once you provide your vehicle’s registration number and select your add-ons, you can make the premium payment to receive a soft copy of the policy. After purchasing insurance, you must remember to complete your car insurance renewal online every year. Missing this crucial step could leave you without the required coverage.

ARN: Zuno/Blog/0323/03