Car Insurance Glossary: Learn Definitions and Terminologies

In the world of car insurance, understanding the language is just as important as understanding the coverage itself. From premiums to deductibles, there are numerous terms and phrases that can be confusing for many people. So, here’s a comprehensive glossary to help you understand the car insurance lingo.

List of Glossary on Car Insurance Terms

1. Premium:

The premium is the amount you pay for your car insurance coverage. It can be paid annually or long-term, depending on your policy.

2. Deductible: 

A deductible is the amount of money you must pay out of pocket before your insurance coverage kicks in. For example, if you have a Rs. 500 deductible and your car sustains Rs. 1,000 in damages, you'll pay Rs. 500, and your insurance company will cover the remaining Rs. 500.

3. Coverage: 

Coverage refers to the types of protection provided by your car insurance policy. This can include liability coverage, which pays for damages to other people's property or medical expenses if you're at fault in an accident, as well as collision coverage, which pays for damages to your own vehicle.

4. Liability Coverage:

Liability coverage is mandatory in most states and covers damages and injuries you cause to others in an accident. It typically includes bodily injury liability, which covers medical expenses and lost wages, and property damage liability, which covers repairs or replacement of damaged property.

5. Comprehensive Coverage: 

Comprehensive coverage protects your vehicle from non-collision-related damages, such as theft, vandalism, or natural disasters like floods or storms.

6. Underinsured/Uninsured Motorist Coverage: 

This coverage protects you if you're involved in an accident with a driver who either doesn't have insurance or doesn't have enough insurance to cover your damages.

7. Claim: 

A claim is a formal request made to the insurance company to cover losses incurred as a result of an accident or other covered event.

8. Policy:

Your policy is a legal contract between you and the insurance company that outlines the terms and conditions of your coverage, including the types of coverage you have, the limits of your coverage, and the cost of your premiums.

9. Renewal: 

Renewal refers to the process of extending or continuing your car insurance coverage for another term, typically after your current policy expires.

10. Exclusion: 

An exclusion is a specific circumstance or type of damage that is not covered by your insurance policy. It's important to review your policy carefully to understand what is and isn't covered. For example, a partial loss such as minor water damage might not be covered if it results from gradual wear and tear. It's important to review your policy carefully to understand what is and isn't covered.

11. Depreciation: 

Depreciation is the decrease in the value of your vehicle over time. Some insurance policies offer depreciation shield cover, which ensures that you receive the full value of your vehicle in the event of a total loss without accounting for depreciation.

12. Add-On Cover: 

Add-on covers, also known as endorsements or riders, are additional features or benefits that you can add to your car insurance policy for an extra cost. These may include roadside assistance, key replacement, or engine protector coverage.

13. No Claims Bonus:

A no-claims bonus is a discount offered by insurance companies to policyholders who haven't made any claims on their insurance policies within a certain period of time. It's a way for insurance companies to reward safe driving behaviour.

14. Personal Accident Cover: 

Personal accident cover provides financial protection to the owner and the passengers in the event of an accident, covering medical expenses, disability, or death benefits.

15. Insured's Declared Value (IDV): 

IDV is the maximum amount that your insurance company will pay you if your vehicle is declared a total loss. It's calculated based on the current market value of your vehicle minus depreciation. Now that you're familiar with some of the key terms and phrases used in car insurance, let's take a look at how you can apply this knowledge when purchasing car insurance online.

How to Use Your Car Insurance Glossary When Buying Insurance Online

Know Your Vehicle Details: 

Before purchasing car insurance online, make sure you have all the necessary details about your vehicle, including its make, model, year, and VIN (Vehicle Identification Number).

Compare Coverage Options:

Use your newfound knowledge of car insurance terminology to compare coverage options and select the policy that best meets your needs and budget.

Understand Add-On Covers: 

When customising your policy, consider adding on additional covers that provide extra protection for you and your vehicle, such as roadside assistance or zero depreciation cover.

Review Policy Documents Carefully: 

Once you've selected a policy, carefully review the policy documents to ensure you understand all the terms, conditions, and exclusions.

Renewal Reminder: 

Set a reminder to renew your car insurance before it expires to avoid any lapses in coverage and to take advantage of any available discounts or benefits. By familiarising yourself with car insurance terminology and understanding the nuances of coverage options, you can make informed decisions when purchasing and managing your car insurance policy online. So, whether you're a seasoned driver or a new car owner, empower yourself with knowledge and protect what you love with the right car insurance coverage. Remember, when it comes to car insurance, knowledge is key, and having a clear understanding of the terminology can help you navigate the process with confidence and peace of mind. So, don't be intimidated by the complexities of car insurance – arm yourself with information and drive safely and peacefully, knowing you're protected.   *Standard T&C Apply *Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.