Your RTO details
RTO name
Contact No.
  • City & RTO
  • Car Brand
  • Car Model
  • Car Fuel Type
  • Car Variant
  • Registration Year
Looking for Car Insurance?
Get Car Insurance starting at only 2094/year #
Compare & Save upto 85%* on Car Insurance
  • Renew policy in 2 minutes*

  • 21+ Insurers to choose

  • 1.2Cr+ Vehicles Insured

    Other models
    Other variants
    Select your variant
    View all variants
      We don’t spam
      View Prices
      Please wait..
      By clicking on “View Prices”, you agree to our Privacy Policy & Terms of Use
      Get Updates on WhatsApp
      Select Make
      Select Model
      Fuel Type
      Select variant
      Registration year
      Registration month
      Save & update
      Please wait..
      Search with another car number?

      We have found best plans for you!! Our advisor will get in touch with you soon.

      Understand the Nitty-Gritty of Car Insurance Policy Documents

      Have you recently purchased a car insurance policy for your new car? But cannot decode the complex terms and jargon used in your policy document? Or are you planning to buy one and want to learn the nitty-gritty of vehicle insurance? In this article, we will decode some common terms found in car insurance policy documents, making it easier for you to comprehend your coverage.

      Read more

      Decoding Common Terms and Jargon in Policy Documents

      A car insurance policy document contains terms that are hard to comprehend. Understanding these terms is crucial for making informed decisions about your coverage and ensuring you are adequately covered in an unforeseen event. Thus, we have simplified these terms so that you understand each of them before you sign the contract with your insurer.

      Below, we have mentioned some common motor insurance terms and their explanation in a simple manner.

      1. Insurer and Insured

        A car insurance policy is a legal contract between the insurer and the insured. In this definition, the insurer refers to the car insurance company that sells insurance. On the other hand, the insured can be the person who bought the said car insurance policy. Insured can also be the four-wheeler that has been insured under the policy.

      2. Acts of God/Nature

        Acts of God/Nature refer to natural disasters caused without human intervention. Some of these can be an earthquake, cyclones, floods or hurricanes. Any damage to the insured vehicle caused by these natural disasters is covered by a four-wheeler insurance policy.

      3. Deductible

        Deductibles can be of two types: compulsory and voluntary deductibles.

        A compulsory deductible is the mandatory amount that a policyholder is required to pay as a part of the claim. According to the IRDAI, the compulsory deductible is Rs. 1,000 for cars with an engine cubic capacity (cc) of no more than 1,500 cc and Rs. 2,000 for cars with more than 1,500 cc.

        A voluntary deductible is a part of the claim that a policyholder voluntarily pays to the insurer at the time of policy purchase. The rest of the claim amount is paid by the insurer. Opting for a voluntary deductible is also a great way to reduce your car insurance premium.

      4. Own Damage Cover

        Own damage is a type of car insurance that provides coverage for damages sustained by the insured car caused by accidents, natural disasters, theft, fire, manmade acts, etc.

        The own damage component basically implies accidental damage to one’s own (insured) car.

      5. Insured Declared Value/Sum Insured

        The Insured Declared Value or IDV in vehicle insurance is the maximum compensation a policyholder receives if his/her car sustains total loss or gets damaged beyond repair. It is the current market value of a car minus the depreciation that a policyholder gets at the time of total loss.

        The amount of IDV also impacts car insurance premium. Going for a lower IDV can lead to a lower premium and vice-versa. So, it is recommended to set an IDV that is at par with the current market value of your four-wheeler.

      6. Liability to Third Parties

        Liability to third parties refers to damages or injuries caused to any third party due to the insured car. In third-party insurance, the insurer compensates for the damages to the third party due to an accident.

        Third-Party liability includes:

        • Death, disability or bodily injury of a third person
        • Damage to the property of the third party.
      7. Personal Accident Cover for Owner-Driver

        A personal accident cover is a compulsory add-on that a car owner should have under his/her car insurance policy. This cover can be purchased by paying a nominal additional premium.

        It offers compensation of up to Rs. 15 Lakh in case the owner/driver of the insured car suffers a disability or dies in an accident.

        Also Read: Personal Accident Cover for Owner-Driver

      8. Premium

        Premium is the amount that an insured/policyholder pays to the insurer in return for purchasing a car insurance policy. The final amount of the premium is calculated based on various factors like make, model, variant, fuel type, coverage opted, add-ons, etc.

      9. Endorsements

        Endorsements refer to the process of making modifications to an existing car insurance policy document. If you find any mistake or error in your policy document related to your personal information, policy expiration date, policy number, etc, make sure to rectify it via an endorsement.

        Endorsement can be financial (under which the insurer charges a nominal fee) or non-financial (no fees are charged for making modifications) in nature.

        You May Also Read: Know Everything About Endorsements in Car Insurance Policy

      10. No Claim Bonus

        No Claim Bonus or NCB refers to the discount given by the insurer for not raising a claim during a policy year. This discount can be used to reduce car insurance renewal premium for subsequent years.

      11. Personal Accident to Unnamed Passengers

        By paying an additional premium, a policyholder can also purchase a PA cover for the unnamed passengers. This cover provides compensation for bodily injuries/death/disability sustained by the passenger present in the car at the time of accident.

      12. Break-in Insurance

        A break-in insurance is the time duration between two policies refers to the break-in period. In the situation of break-in, your car insurance policy lapses and you are required to get your car inspected for renewing the insurance policy.

        Moreover, if this break-in period exceeds 90 days, you also lose your accumulated No Claim Bonus reward.

      13. First Notification of Loss (FNOL)

        First Notification of Loss (FNOL) in car insurance refers to the first time you notify your insurance provider about the damage sustained by the insured vehicle. To avoid any claim rejection, make sure to initiate FNOL within 48 hours of meeting an accident.

      Wrapping Up!

      Understanding the terms and jargon used in car insurance policy documents is essential for ensuring you have the right coverage to protect yourself and your vehicle. By familiarizing yourself with these terms, you can make informed decisions during policy purchase or car insurance renewal and avoid any claim rejections in the event of an accident.

      Find similar car insurance quotes by body type

      Hatchback Sedan SUV MUV
      Save upto 85% on Car Insurance
      Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
       Why buy from policybazaar

      Car insurance articles

      • Recent Article
      • Popular Articles
      21 May 2024

      Get Faster Claim Settlement with Policybazaar Claim...

      Getting your car insurance claim settled is no longer a hassle

      Read more
      17 Apr 2024

      Understand the Nitty-Gritty of Car Insurance Policy...

      Have you recently purchased a car insurance policy for your new

      Read more
      22 Feb 2024

      IDV in Car Insurance

      In layman's terms, the IDV full form is the Insured Declared Value

      Read more
      31 Jan 2024

      Must-Have Car Insurance Addons for Brand New Cars

      Investing in a full-coverage car insurance policy is essential for

      Read more
      29 Jan 2024

      No Claim Bonus (NCB) in Car Insurance

      No Claim Bonus (NCB) is a reward given by an insurer to a

      Read more
      11 Aug 2021

      How to Check Car/Vehicle Insurance Status Online

      It doesn’t matter if you are an excellent driver or take your car out only once in a few months; your vehicle must

      Read more
      20 Jun 2019

      Getting Your Duplicate Car Insurance Policy is...

      Losing your car insurance documents can be daunting. In such a state of affairs, the first thing that comes to your

      Read more
      20 Dec 2021

      How To Find Car Insurance Details By Registration Number

      Sometimes, you may face situations when you need car insurance or vehicle owner details but cannot readily access

      Read more
      03 Jun 2016

      How to Transfer Car Insurance Policy?

      An integral part of selling a car for both the buyer and the seller is ensuring a successful car insurance transfer

      Read more
      20 Jul 2017

      Comprehensive Insurance Vs Third Party Insurance

      Comprehensive car insurance offers protection to the insured car against third-party liabilities and own damages due

      Read more

      #Rs 2094/- per annum is the price for third-party motor insurance for private cars (non-commercial) of not more than 1000cc

      *Savings are based on the comparison between the highest and the lowest premium for own damage cover (excluding add-on covers) provided by different insurance companies for the same vehicle with the same IDV and same NCB. Actual time for transaction may vary subject to additional data requirements and operational processes.

      View Plans
      Download the Policybazaar app
      to manage all your insurance needs.