As a result, prospective vehicle insurance buyers are perplexed and may not find what they seek. This issue can be resolved by defining some of the key terms associated with this type of insurance. These are some examples:
- Policy period.
- Insured declared value.
- Cashless garages.
- Personal accident cover.
- No claim bonus.
The policyholder is the individual or group who has purchased a motor insurance policy in their name. The policyholder is usually the primary beneficiary of the insurance policy.
In addition, the policyholder can be a company or another entity. It is important to note that the policy involves two parties: the policyholder and the insurance company, or insurer.
The insurance agent or salesperson who sells insurance policies on behalf of the insurer or insurance company is referred to as a representative. A broker is also a representative who advises clients on which insurance policy to purchase.
The policy period begins on the day the policyholder purchases the insurance policy. The policy period is the time period that runs from the first day of the policy to the last date before expiration.
The premium for motor vehicle insurance is the amount you pay to protect your vehicle from fires, theft, accidents, and other problems. As a policyholder, you must pay a fixed policy amount, and the insurance company provides relief to policyholders in the event of a loss.
Insured Declared Value
When discussing motor insurance online plans, the term insured declared value, or IDV, is frequently used. The maximum amount that the policyholder is eligible to receive from the insurer is referred to as the IDV. The IDV is determined by taking the vehicle's current market value and depreciation into account. If the IDV is less, the policyholder will have to pay a lower premium.
It should be noted, however, that policyholders will receive a lower payout when filing a claim. As a result, one must pay close attention to the IDV set by the insurer at the time the policy is written.
Deductibles are another important term in motor insurance in India. A deductible is a sum of money that is deducted from the claim amount that a policyholder must bear.
Deductibles can help reduce the amount of premium paid by the policyholder. Deductibles are classified into two types:
Voluntary: The policyholder has the option of choosing a percentage to be deducted.
Compulsory: The insurer determines the percentage to be deducted, and the policyholder is responsible for paying the claim amount.
Cashless garages are a network of garages where the policyholder does not have to pay cash for service. The disadvantage is that the service is limited to garages with which the insurer has a partnership.
Personal Accident Cover
Personal Accident Coverage is insurance for the person driving the vehicle. It is especially useful if the policyholder is involved in an accident and is hospitalised up to a certain limit.
No Claim Bonus
No claim bonus is another term commonly associated with auto insurance. It is a bonus or discount given to the policyholder if no claims are filed during the year.
It is a method for the insurer to reward the policyholder for driving safely. Furthermore, as the no-claim bonus accumulates, insurers offer policyholders a significant discount on the payable premium, up to a maximum of 50%. (which accumulates with every claim-free year).
Motor insurance providers' add-ons or riders can be added to a comprehensive or existing insurance plan. There are a variety of add-ons available, such as zero depreciation coverage, personal accident coverage, key replacement coverage, and roadside assistance, to name a few.