Home Business5 Car Insurance Terms You Should Know During Monsoon Season
To safeguard yourself against financial loss in the event of an accident, it is crucial to understand the key terms of car insurance. Here are 5 car insurance terms you should be familiar with during the monsoon season:
1. Deductibles: This refers to the amount that you, as the policyholder, must pay before the insurance provider covers the remaining expense. Each claim you make is subject to the deductible. For example, if your insurance claim is for Rs 10,000 and your deductible is Rs 1,000, you would be responsible for paying Rs 1,000, while the insurance provider would cover the remaining amount. Deductibles encourage car owners to take good care of their vehicles. There are two types of deductibles: required and optional. You must always pay the required deductible when filing a claim, which is set at Rs 1,000 for vehicles with engines up to 1,500 cc and Rs 2,000 for larger engines, according to IRDAI regulations.
2. Complete Coverage: Comprehensive coverage is the second type of coverage available in car insurance. While not mandatory, it is recommended as it provides comprehensive protection to the car owner. Comprehensive auto insurance coverage protects the insured car from both own and third-party damages. This means that if your covered vehicle suffers damage due to third-party liabilities, theft, fire, natural disasters, or other calamities, you will be compensated. If you want extensive vehicle coverage, a comprehensive auto policy may be the best option for you.
3. Engine Protect: Engine Protect is an add-on car insurance policy that safeguards your car’s engine from damage caused by factors other than accidents. This includes protection against water ingress, oil leakage, and gearbox malfunction. If your car gets stuck in a waterlogged area, it is crucial to contact your insurance company immediately. Avoid trying to start the car if it is submerged in water, as this can cause additional damage. Engine protection is a valuable add-on for car owners, especially for those living in areas prone to monsoon seasons or other potential water damage hazards.
4. Insured Declared Value (IDV): The IDV refers to the maximum amount that your insurance company will pay out if your car is totaled or stolen. It is determined by subtracting the depreciation amount from the car’s original value. When purchasing car insurance, it is important to ensure that the IDV is set at the current market value of your car.
5. Third-party Car Insurance: Third-party car insurance is a mandatory component of any car insurance policy in India. It covers the cost of damage you cause to other people’s property or vehicles in the event of an accident. This includes both physical damage and legal liability. The third party can be anyone who is not the policyholder or the insurer, such as the driver or passenger of another vehicle, a pedestrian, or the owner of damaged property.
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