Car Insurance

Important Terms & Conditions to Read in Your Car Insurance Policy

By Admin
Apr 19, 2021

One might be instantly put off with all the legalese that an insurance contract comes with. But this must not be used as an excuse to avoid reading the policy document from end to end. It is important to read the car insurance policy document thoroughly and understand the implications of all the terms and conditions mentioned. 

Where can you find the insurance jargon to read about? 

The insurance contract is highly specific and uses legal terminology that is scarcely used in daily conversations. Most insurance companies now upload the definitions of all the terminologies involved in a policy on their website, therefore, these can be easily accessed by anyone who has access to the internet. 

A clear explanation of the policy wordings can be availed by visiting the office of the insurance company or consulting an insurance agent. A Point of Sale Person (POSP) is also a good resource to glean information about insurance jargon.

What are the most important sections to read in a car insurance policy?

  • Liabilities to third parties: This is the part of the policy that is mandated by a central law namely the Motor Vehicles Act, 1988. A third-party cover ensures that the policyholder is protected from any financial and legal liability that is associated with any damage to a third party’s property or injury to the third party. The damages that are usually covered include partial disability, permanent total disability, death, and property damage.
  • Loss or damage done to the insured car: This part of the policy cover is not mandatory and opting in for it is based on the discretion of the car owner. The contents of this section will contain all the inclusions and exclusions in the coverage offered by the insurer which usually includes coverage for damages to the policy holder’s car and property as well as injuries caused to the car owner. 
  • Sum insured or the Insured Declared Value: One of the most important aspects of the policy document is the sum insured. The car is insured based on the IDV of the car which is the market value of the car inclusive of the accessory costs and excluding the depreciation costs. It is the maximum amount that one can be paid in case of total loss or total constructive loss or theft of one’s vehicle.
  • General exceptions: Knowing the outer limits of your insurance policy is important as you can try to avoid getting into those circumstances and even if you, will know better before filing a claim for the same. Some standard exclusions that most policies have are the absence of a valid driver’s license and driving under the influence of intoxicants will result in the rejection of the claim.
  • Grievance Redressal: This section of the policy document explains the recourse that the policyholder has in case his or her claims get rejected. The authorities that can be approached (for example, insurance ombudsman), the procedure to do so, as well as the conditions to be satisfied in order to lodge a grievance, and the contact details are clearly outlined.
  • Miscellaneous : Clauses regarding car insurance add-ons like zero depreciation cover, depreciation rates, premium rates, deductibles charged, etc. must be looked at with care. 

How to buy the best car insurance policy in India? 

With the number of options that are available, it becomes rather difficult for the car owner to choose an insurance policy that would best serve his or her needs. The most important consideration while purchasing the policy should be the resources available at your disposal. 

On a relative scale, buying insurance online will not be as expensive as buying a policy offline as all intermediaries, brokers, and agents are absent in the online process. Online insurance companies also offer attractive discounts such as new user discounts, year-end discounts, and other festival offers to attract customers into this nascent market. 

One can also benefit from the several insurance aggregators readily available online for they will compare the policies and premium costs of different car insurance companies and put it up for the public to view, making one’s job easier.

Certain considerations that have to be kept in mind while purchasing a policy are – 

  • Premium rates
  • Quick and easy processing of claims
  • Options available to customise one’s policy
  • Ease of renewal of the policy
  • Customer service offered
  • Claim settlement ratio of the insurer
  • Transparency and accountability of the insurance service provider

Conclusion 

As the popular adage goes – knowledge is indeed power. Do not avoid reading the terms and conditions of the policy and the fine print in the policy document is the last part that you must skip. Equip yourself with some basic knowledge that will help to understand these terms with ease.

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