Different professions have a different set of jargon that they tend to use extensively to discuss certain things related to their daily practices, work ethics, habits or plan of action. Even the Insurance Companies have their own set of jargon that they use to explain different types of policy plans and their associated terms, conditions and clauses.
Though it may not be possible for the laymen to understand or acknowledge all the jargon used by a Vehicle Insurance Company, interested policy buyers should try to learn more about such jargons to gain a better understanding of motor insurance policies and their associated clauses without much trouble. It also helps commercial vehicle insurance policyholders to plan their course of action better for availing additional car coverage or other motor insurance renewal policies.
Important Motor Insurance terms that you must know
To plan and proceed smoothly during such an emergency, policyholders must familiarise themselves with the following vehicle insurance terms for a hassle-free experience:
- Insured declared value or IDV: The IDV stands for the current market value of an individual’s car, which is typically calculated on the vehicle’s age and its rate of depreciation. In the case where a motor insurance policyholder’s vehicle is lost or stolen, the motor insurance company is liable to offer the policyholder an amount that equals to the IDV of their insured vehicle.
- No claim bonus or NCB: NCB actually refers to the discount that a vehicle insurance holder may receive for making zero claims in the previous year of their motor insurance policy. In simpler words, NCB is the reward that policyholders avail for practising safe driving. Sometimes, the policyholder may avail the NCB at the time of their motor insurance renewalin the following year.
- Third party cover: This basically can be regarded as the financial liability of the policyholder towards the third party in case of death, disability or damage caused to the third party by the policyholder. In India, Third Party Cover is the minimum coverage that is made mandatory by the law.
- Personal accident cover: This type of cover tends to offer coverage to the policyholder against accidents. Such coverage tends to offer financial coverage for the purpose of car repairs, physical injuries, disability or death during an accident and acts as a security net.
- Comprehensive policy: This particular type of motor insurance plan tends to provide financial coverage against the damages incurred by both the parties who were involved in an accident. It also tends to cover natural calamities as well as manmade calamities. A policyholder should note that a comprehensive plan covers personal accident, damages to the personal vehicle and third party liability.
- Cashless claim: This is currently one of the most popular types of vehicle insurance policies. In such a policy, the motor insurance provider settles the policyholder’s claim straightaway with the garage. The policyholder doesn’t have to make a huge expense from their own pocket for repairing their car. To avail such a cashless facility, policyholders must visit a garage that is designated under the insurer’s network.
Before buying vehicle insurance or opting for a motor insurance renewal, make sure to learn the basic terms that are commonly used in motor insurance to be better equipped with the working of policy plan.