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Important Sections to Read in Your Car Insurance Policy Wordings

By Vikas Chandra Das
04 August 2022, 2:18 PM

Most insured individuals do not understand the terms and conditions while filing a car insurance claim. As a result, your claim may get denied. So, each covered person needs to be thoroughly familiar with and understand the car insurance policy wordings. But call it the technicality of policy wordings or the way the insurer defines the same, you might find it hard to grasp. So, we are here to help you by letting you know the same easily.

If we abide by the conditions laid down in the policy wordings, we can claim efficiently for the damage or loss suffered involving your insured car. In this article, we pointed out the essential sections to read. Let's read, understand and act accordingly.

Important Things to Know Before Reading the Components

1. What is Covered?

This section of the policy wording usually outlines the specific events the policy covers. It is essential to read this section carefully, as it will list the covered incidents.

2. What is Not Covered?

This section is just as important as the one above, as it details what the policy does not cover. It includes events not specifically stated as being covered, along with those considered excluded.

3. How is the Policy Worded?

This section will outline the specific terms and conditions associated with the policy. It is essential to read and understand these conditions, as they will dictate the use of the policy.

4. What is the Policy Limit?

This section will state the maximum amount the policy will pay for a specific event. It is essential to be aware of this limit before applying.

Here are 10 Important Sections to Read from Your Car Insurance Policy Wording

You should know these essential sections in a car insurance policy.

1. Description of Coverages

This section provides a general overview of the coverages included in the policy. It will list the covered perils and the maximum amount you will get for each.

2. Policy Terms

This section outlines the specific terms and conditions of the policy. It includes information such as the period of coverage, the deductible amount, and the exclusions that apply.

3. Conditions

This section lists the specific conditions that must be met for the policy to be valid. For example, the policy may state that we must use the car for personal only or that the driver must be licenced and have an excellent driving record.

4. How to Make a Claim

This section explains how to submit a claim effectively. For instance, if you need to submit a claim under the policy, you must contact the insurance provider and give it the details. After processing your claim, the insurer will inform you of the expected resolution time.

5. Third-party Liability

This section outlines the coverage for third-party liability insurance, which can provide financial help in an accident. Suppose an accident caused by the insured (policyholder) person will save them from any third liability charges as per the Motor Vehicles Act, 1988. In that case, driving a car on the road with basic third-party liability insurance is mandatory. 

6. Comprehensive Coverage 

This section typically describes the standard comprehensive coverage inclusions and any possible add-on options such as zero depreciation. The comprehensive coverage section allows for a holistic insurance policy. It includes third-party insurance and covers the damages caused to a third party and the policyholder's vehicle. 

7. Personal Accident Coverage

This section describes personal accident insurance coverage, which can offer financial support in an accident. It is essential to read this section to understand its coverage and exclusions.

8. Personal Accident Cover for Owner-Driver

The insurance company pays the compensation depending on the injury.

Nature of InjuryScale of Compensation 
Loss of two limbs, blindness in both eyes, or loss of one limb and vision in one eye100%
Loss of one limb or sight of one eye50%
Complete and permanent disability because of injuries other than those mentioned above100%

9. General Inclusions and Exclusions

This is one of the most important sections since it explains why a policyholder's claim could be denied.


This section lists the specific events or circumstances covered under the policy:

  • Property damage or bodily injury brought on by an insured person.
  • An uninsured or underinsured driver's injuries or property damage.


This section lists the specific events or circumstances not covered under the policy: : 

  1. Intentional harm.
  2. Damage caused by wear and tear.
  3. Damage caused by a motor vehicle while it is being used for racing or illegal purposes.
  4. Damage caused by a driver who is intoxicated or under the influence of drugs.

10. Grievance Redressal

This section includes a paragraph outlining contacting the insurance company if you have questions or complaints. Along with giving the reasons for claim rejection, it also discusses the steps we can take if our claim gets rejected. Contact the insurance company for further inquiries and concerns using the information provided in this section.

Read more - Why Car Insurance Premium Increases Every Year?


Some people skip these sections while buying car insurance. It is essential to read through these sections because understanding them and going through them helps in the process. The terms and conditions of each insurance company specify the policy type, personal accident coverage, general inclusions, and exclusions. Ensure that you read through these sections before purchasing car insurance.

Read more - Go For Complete Protection When You Buy Car Insurance in India


1. What is the important section in a car insurance policy?

The main section of a car insurance policy is the coverage type, damages covered, and property damage coverage.

2. What should we look for while purchasing a car insurance policy?

When purchasing a car insurance policy, understand its coverage, rating factors, discounts allowance, and terms and conditions.

3. What is the importance of comprehensive car insurance?

Comprehensive car insurance's importance is that it covers the damages of the owner and the third party involved in the accident.

4. What comprises the condition section in an insurance policy?

The condition section comprises property valuation, insurance, subrogation rights, non-renewal, and cancellation.

5. What is meant by the sum insured section?

This sum insured section tells us the insured declared value, the maximum claim the insurance company pays in case of car damage or loss.

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