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A Simple Guide to Reading Car Insurance Policy Wordings

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It is essential to understand that the car insurance plan provider only adheres to the terms of the claim policy that the insured voluntarily signs. Before accepting the transaction, it is crucial to understand your policy wordings to promote mutual trust and better understanding.

Here are a few of these provisions that play a crucial role in determining your auto insurance coverage –

  • Insured Vehicle Damage (damage to the vehicle):

When you read your car insurance policy, pay close attention to the items on this list. The insurance provider may only offer you compensation if your car suffers a loss or damage due to the circumstances listed in this section.

  • IDV (Insured Declared Value):

The sum insured is based on the declared value of your insured (IDV)*. Simply subtracting depreciation from the manufacturer’s sale price yields this result. India’s Insurance Regulatory and Development Authority (IRDAI) sets the depreciation rates. The amount insured decreases as your car ages because of depreciation. You can, visit the official website of IRDAI for further details.

* Standard T&C Apply

  • Third-Party Liability:

According to the Motor Vehicles Act, buying third-party car insurance, online or offline, is mandatory if you own a car. In this case, the insurance provider may make up for the damage the covered car may cause in case of an accident. The driver-owner does not receive any reimbursement for damages to the insured vehicle under third-party insurance.

  • No Claim Bonus –

Insurance companies reward the insured party if a claim has yet to be filed within the allotted time. This financial reward, sometimes known as a “No Claim Bonus,” is given as a savings* offer on the premium. For instance, not filing any claims during a year may result in a 20% premium savings* next year when you renew your policy. This can also be used wisely from old to new vehicles or use the rewards from the car insurance renewal. The “No Claim Bonus Protect” add-on helps to protect accrued bonuses even if the claim was from a specific year.

* Standard T&C Apply

  • Supplements –

These essential bundles come with additional benefits and are optional. Pay attention to the provider’s extras and pick the ones that can enhance your insurance experience.

The following five areas of your comprehensive auto insurance policy wordings are crucial to reading –

  • Component of third-party liability –
    A basic third-party car insurance policy must cover all four-wheelers on Indian roads. This policy protects you from financial hardship if your insured vehicle causes property damage or personal injury to someone else. In your policy document, you can find an explanation of the inclusions and exclusions of the coverage.*
  • Owner-Driver Personal Accident Insurance –
    You must read this section to clarify any misunderstandings regarding the claim amount and the injuries covered by this policy. This section includes a table describing the injury’s type and the compensation range.
  • Complete protection –
    A thorough plan must have its harm component. This part clearly explains information on own injury. If the claim is made for an occurrence not covered by the policy or one of its exclusions, the insurance company may not be able to process it.
  • Additional Points –
    You should know a few things besides the three primary coverages provided by a comprehensive car insurance policy. The Insured Declared Value (IDV), No Claim Bonus (NCB), Depreciation, Deductibles, Additional coverage (Add-ons), etc., are some of these factors.
  • Dispute Resolution –
    Inquiries require responses, which you can obtain by contacting the insurance provider at the phone number, email address, and address listed in this section of the policy wording.

By comparing the policy’s benefits with your insurance needs, you can better grasp the policy wording after carefully reading them.

‘Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale’.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. *Standard T&C apply

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