1. 6 Motor Insurance terms you must know before you claim So many terms and conditions to peruse, so many policy papers to pry apart! If only there was some sort of insurance dictionary you could refer to every time you came across a word or term you didn’t know… Well, now there is. We’ve simplified the meanings of a list of common terms you will definitely come across when buying or renewing motor insurance. 1. Insured Declared Value (IDV) Simply put, IDV is the current market value of your vehicle. IDV refers to the highest sum payable by the insurer for a vehicle insurance policy. It is thus the maximum amount you can claim in case of total loss of your vehicle, for instance if it gets stolen or damaged beyond repair. Tip: Refrain from quoting an IDV lower than the actual market value of your car. Though you may think that would allow you to pay less premium, it may also result in you receiving inadequate compensation. 2. Own Damage Premium This is the premium you pay to avail insurance cover equal to the IDV, and forms a major part of your total motor insurance premium. ODP insures your vehicles against losses caused by events outside of your control. This includes natural disasters like earthquakes and tornadoes, as well as man-made calamities like fires and explosions. Tip: The ODP differs according to the model, cubic capacity, geographical zones, etc. of the vehicle so make sure you specifically ask about it. 3. Zero Depreciation Cover When you make a claim, standard insurance policies deduct depreciation on replaced parts. However, if you opt for a Zero Depreciation cover, insurance companies waive off depreciation on such replaced parts, which means that you get a higher claim amount. Tip: This cover is generally only applicable for the first few claims. Thus, though it may demand a steeper premium, it’s advisable to opt for it given that the claim amount is considerably higher. 4. No Claim Bonus (NCB)

2. This is essentially the discount you become eligible for when you have not made a claim in the previous year- kind of like a reward for prudent use of your vehicle. This discount considerably lowers the insurance premium you need to pay when you’re renewing the policy. Since the NCB discount amount can be quite large- starting* at 20% for the 2nd year and up to 50% for the 6th year, it’s worth refraining from registering a claim for minor damages, and instead holding out for the NCB. 5. Third Party Cover Third Party cover protects the vehicle owner against any financial liability as a result of death, physical injury or damage to the property of a third party. The term’ third party’ is used because the beneficiary of the policy is someone other than the two parties involved in the contract i.e. the vehicle owner and the insurance company. A victim can thus file a third party cover claim against the owner of the vehicle, and the latter’s insurer will pay for this claim on their behalf. Tip: According to Indian Law, third party cover is mandatory when you’re buying a car, so do ensure that it’s a part of your contract with your insurer. 6. Personal Accident Cover Beyond just your vehicle, Personal Accident Cover financially safeguards you against unforeseen events causing bodily harm, such as Accidental Death or Permanent Total Disability arising due to a road accident. Over 1,37,000 people** were killed in road accidents in 2013 alone. India does hold the dubious distinction of most number of road accidents annually. Tip: Not every Vehicle Insurance policy includes personal accident cover so it’s absolutely essential you make sure yours does. Source: tomorrowmakers.com/articles/car-insurance/6-motor-insurance-terms-you-must-know-before- you-claim