Motor Insurance Terms You Should Not Ignore

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Insurance terms in general are difficult to keep up with, and motor insurance is no exception. Industry jargons are as confusing as they are useful. Hence, you need to understand the meaning of these jargons to compare and evaluate the car’s insurance needs. We’ve simplified common terms for you to identify and understand in the fine-print of an insurance policy, so you are equipped to make an informed insurance investment.

Insured Declared Value (IDV) – This is the depreciative value of your vehicle that the policyholder (which is you) and the insurer have agreed upon. This value determines how much premium is payable by you. This is an age depreciative value.

Liability coverage – If you were to end up in an accident that involves another party, then Liability Coverage is the sum amount that is payable as coverage for any medical expenses incurred. In most car insurance policies, this sum assured is divided into 3 parts. The first part is the maximum that the insurance company can reserve for an individual, the second part covers all individuals for a specific amount, and the third part covers possession and property damage for any other party involved.

No Claim Bonus (NCB) – In the event that you don’t claim any insurance over an extended period of time, you are liable to receive a no claim bonus on your premiums. This bonus is liable only on renewals made before the 90-day limit post expiry.

Own Damage Premium (OD) – OD premiums are what you pay to insure your vehicle against theft and damage (involving only you). You also receive the NCB over this premium.

Personal Accident Cover – This vehicle insurance cover includes financial security against not only accidental death and permanent total disablement, but also against terrorism and acts of terrorism as well.

Proof of loss – These are the documents you submit to the insurer during the time of claim, which include written repair estimates from auto body shops, police reports, and such.

Comprehensive/Collision Coverage – Required frequently if you have a car loan, collision coverage is an optional cover that safeguards you against expenses from car or object collisions.

Remember to check your car insurance policy for these terms and the conditions they entail.

For further details about car insurance and related financial questions, get in touch with us at PL-India Motor Insurance and we shall revert at the soonest. Alternatively, do email us at


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