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Posted by Royal Sundaram on 05 Oct 2016
For most of you, buying a car is the second-costliest purchase done in life, after purchasing a home. Owning a car does give a sense of pride to many. As a result, most of us take utmost care of the prized possession by doing regular cleaning, servicing, and maintenance. A car insurance policy is requirement and a necessity to protect oneself from any uncertainty event or incident. Here are some common terms which you need to be informed of.
- IDV stands for Insured Declared Value.
- IDV is the maximum amount of sum to be paid by the insurer in case a claim is filed due to accident, total loss, theft, or damage.
- The amount of IDV varies with respect to car models, variants, date of manufacture, and locality.
- IDV helps in valuation of your car; any policy that offers lower IDV is cheaper, but carries reduced cover.
- Zero Depreciation Cover
- Whenever you file a claim for your car insurance policy, insurers are known to provide reduced cover due to depreciation.
- Through Zero Depreciation Cover, such deduction is waived off, thereby enabling you to avail higher claim amount.
- NCB stands for No-Claim Bonus
- It is the discount given by the insurer to the policy holder at the time of renewal.
- This discount is available when the policyholder doesn’t file a claim in the given policy year.
- NCB starts from 20% for the 2nd year and extends up to 50% for the 6th
- Third Party Cover
- Third Party cover is also known as liability cover.
- It will protect the vehicle owner against any financial liability arising due to damage caused to any other person or property.
- Third Party Cover is a mandate by Law.
- Personal Accident Cover
- This cover offers financial safeguard against any kind of bodily injury or permanent disability caused during accidents.
- It is an optional cover, and not insurers offer it by default.
- Collision Cover
- Optional cover that is available to pay off for damages caused due to collision.
- Comprehensive cover
- This includes collision as well as third-party cover.
- It also includes the cover extended by add-ons.
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