If you want to protect yourself from financial loss in the event of an accident, it’s important to understand the key terms of car insurance.
The monsoon season is here, and with it comes the potential for flooding, landslides, and other hazards that can damage your car. If you want to protect yourself from financial loss in the event of an accident, it’s important to understand the key terms of car insurance.
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Here are 5 car insurance terms you must know this monsoon:
Deductibles
This is the sum that a policyholder must pay before the insurance provider covers the balance of the expense. Every claim you submit is subject to the deductible. For instance, if your insurance claim is for Rs 10,000 and your deductible is Rs 1,000, you would be responsible for paying Rs 1,000, and the insurance provider would cover the remaining Rs Deductibles serve to ensure that the owner of the car takes good care of it.
There are two types of deductibles: required and optional. You must always pay the required deductible when filing a claim. This is set at Rs 1,000 for vehicles with engines up to 1,500 cc (cubic centimeters) and Rs 2,000 for those with larger engines, according to IRDAI regulations, as per Moneycontrol.
Complete Coverage
The second sort of coverage available in car insurance is comprehensive coverage. Although not much is required, this insurance is recommended because it gives the car owner comprehensive protection. Comprehensive auto insurance coverage protects the insured car from both own and third-party damages.
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The policyholder is given compensation if the covered vehicle suffers damage as a result of third-party liabilities, theft, fire, natural catastrophes, or other calamities. A comprehensive auto policy may be the best option for you if you’re seeking greater vehicle coverage, as per Policybazaar.
Engine Protect
Engine Protect is an add-on car insurance policy that protects your car’s engine from damage caused by factors other than accidents. This includes water ingress, leakage of lubricating oil, and gearbox malfunction. If your car gets stuck in a waterlogged area, it is important to contact your insurance company immediately. Do not attempt to start the car if it is submerged in water, as this could cause further damage.
Engine protection is a valuable add-on for any car owner, especially those who live in areas with monsoon seasons or other potential hazards for water damage.
Insured Declared Value
The insured declared value (IDV) is the maximum amount that your insurance company will pay out if your car is totaled or stolen. It is calculated by deducting the amount of depreciation from the car’s original value. When purchasing car insurance, it is important to make sure that the IDV is set at the current market value of your car.
Third-party Car Insurance
Third-party car insurance is a mandatory component of any car insurance policy in India. It covers the cost of damage that you cause to other people’s property or vehicles in the event of an accident. This includes both physical damage and legal liability.
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The third-party is anyone who is not the policyholder or the insurer. In the event of an accident, the third party could be the driver or passenger of another vehicle, a pedestrian, or the owner of damaged property.
