Insurance is a detailed product, much like its glossary. Comprehending the most common terminologies ensures that you fully understand the multiple products in the market, and thus make an informed decision. Let’s begin:
It refers to the request that the insured files with the insurer to compensate for the services obtained from a healthcare provider.
It refers to the fraction of the total amount that the insured must pay towards the healthcare services obtained before the insurer bears the rest.
It refers to the insured’s out-of-pocket expenditure in a claim before the health insurance coverage kicks in.
They can be the insured’s spouse and children (unmarried). The children can be a biological, step, or adopted.
These comprise all the circumstances for which the insurer will not cover the insured.
This insurance policy serves to compensate the insured a percentage of his/her monthly earnings should he/she be rendered disabled.
It refers to the monthly sum that you pay towards your health insurance coverage.
A mesh of hospitals and healthcare providers impaneled by insurance companies to provide services to their clients for a fee that’s less than what is usually charged.
The insurance company is liable to pay the sum insured to the insured should there be an eventuality. For instance, if the sum insured on a health insurance policy is five lakhs, and the insured was hospitalized and underwent treatment worth three lakhs, the insurer would be liable to the tune of 3 lakhs.
Also known as ‘liability only’ insurance, a third-party liability cover is a portion of a motor insurance policy that seeks to compensate for death, accidental injuries or property damages sustained by a third party. One can also buy a third-party liability cover as a standalone policy. Remember that the Motor Vehicles Act, 1988, mandates a third-party liability policy for any vehicle to ply on Indian roads.
This covers the insured vehicle from damages caused by fire, theft, accidents, and calamities (both natural and man-made). However, this part of the motor insurance policy doesn’t cover third-party liabilities.
IDV refers to the sum insured that the motor insurance company has fixed on the vehicle. The IDV is provided only upon theft or total loss of the vehicle. In simple terms car IDV refers to the vehicle’s market value at any point in time.
Similar to co-payment in health insurance, voluntary deductibles refer to (optional) out-of-pocket expenditure towards damages. It is after one pays this that the insurer steps in to pay out the pending claim value. With a higher deductible, one can get a hefty discount on the OD premium.
Unlike voluntary deductibles, compulsory deductibles are mandatory payouts that the policyholder must shell out towards the motor insurance claim amount. This sum varies according to the vehicle’s cubic capacity.
If the policyholder doesn’t file a single claim within a policy year, the insurer offers a No Claim Bonus (NCB) at the time of policy renewal. NCB is offered as a percentage of the OD premium, typically ranging anywhere between 20-50%.
Insurers across the country are affiliated to network garages that offer cashless repairs should the insured vehicle undergo damages. In this scenario, the policyholder doesn’t have to pay anything towards the repairs as the insurer directly settles the bill with the network (cashless) garage.
This refers to any update to car insurance coverage after the commencement of the policy. These can either be premium-bearing (transfer of ownership, the addition of LPG/CNG kit, installation or removal of electrical accessories or anti-theft devices) or non-premium-bearing (change in the registration number, change in the address/contact details of the customer) updates.
It refers to the part of the motor insurance policy that seeks to cover the policyholder (owner-driver) from disability or death resulting from an accident. Should the policyholder want, he/she can nominate passengers and buy a PA cover for them at a nominally higher premium.
One can buy add-on covers to enhance the basic car insurance coverage. Simply put, these offer extra protection to the insured vehicle. The more common add-on covers include zero depreciation cover, roadside assistance cover, NCB protects cover, engine protection cover, and Return to Invoice (RTI) cover.
You must go through the policy fine-print thoroughly and get necessary clarification from the insurer, should the need arise.