What is Motor Insurance | Car Insurance | 6 Terms used in Motor Insurance

What is Motor Insurance?

Motor insurance is an insurance includes natural disasters like earthquakes and tornadoes, as well as man-made calamities like fires and explosions.

So many terms and conditions to peruse, so many policy papers to pry apart! If only there was some sort of insurance dictionary you could refer to every time you came across a word or term you didn’t know…

Tip: We can get  Motor Insurance Online 

Well, now there is.

We’ve simplified the meanings of a list of common terms you will definitely come across when buying or renewing motor insurance.

1. Insured Declared Value (IDV)

IDV refers to the highest sum payable by the insurer for a vehicle insurance policy. It is thus the maximum amount you can claim in case of total loss of your vehicle, for instance, if it gets stolen or damaged beyond repair.

2. Own Damage Premium

This is the premium you pay to avail insurance cover equal to the IDV and forms a major part of your total motor insurance premium.

ODP insures your vehicles against losses caused by events outside of your control. This includes natural disasters like earthquakes and tornadoes, as well as man-made calamities like fires and explosions.

3. Zero Depreciation Cover

When you make a claim, standard insurance policies deduct depreciation on replaced parts. However, if you opt for a Zero Depreciation cover, insurance companies waive off depreciation on such replaced parts, which means that you get a higher claim amount.

4. No Claim Bonus (NCB)

This is essentially the discount you become eligible for when you have not made a claim in the previous year- kind of like a reward for the prudent use of your vehicle. This discount considerably lowers the insurance premium you need to pay when you’re renewing the policy.

5. Third Party Cover

Third Party cover protects the vehicle owner against any financial liability as a result of death, physical injury or damage to the property of a third party. The term’ third party’ is used because the beneficiary of the policy is someone other than the two parties involved in the contract i.e. the vehicle owner and the insurance company.

6. Personal Accident Cover

Beyond just your vehicle, Personal Accident Cover financially safeguards you against unforeseen events causing bodily harm, such as Accidental Death or Permanent Total Disability arising due to a road accident.

Over 1,37,000 people** were killed in road accidents in 2013 alone. India does hold the dubious distinction of the most number of road accidents annually.