Includes stereos and any other permanent audio/visual equipment installed in your car.
Act of God
An unpreventable and unpredictable event that causes loss or damage. Insurance policies often exclude acts of God or acts of war, although they will usually cover natural disasters such as floods.
A change made to your original policy. For example, if adding CD Player to your existing policy.
A device that deters car theft. Cars equipped with anti-theft devices may entitle you to a lower car insurance premium.
Ending an insurance policy before it is due to finish. Insurer may charge you if you want to cancel your policy before it is due to end. There may be a cancellation fee to pay as well as a percentage of your premium should you cancel the policy. Your insurer can also notify you of the cancellation of the policy.
Insurance companies will look at your claims history (how many claims you have made and what you have claimed for) when deciding on what to charge for your insurance premium or renewal premium. Your claims history provides info of the potential risk you pose as a customer. Some insurance companies won’t look to insure anyone who has previously made a claim.
The highest level of car insurance cover, which usually covers you for –
- Injuries to other people
- Damage to other people’s property
- Accidents caused by your passengers or a driver named on your policy
- The use of a trailer, while attached to your car
- Fire damage and/or theft
- Accidental damage to your own car
- Loss of or damage to personal effects in the car, up to a stated limit
All claims have a compulsory excess amount payable by you whether you are at fault or not.
A replacement car while your car is being repaired. This may be included benefit in the policy or an optional extra with your policy.
The decrease in value of your car due to wear and tear and/or time.
Roadside assistance, emergency repairs and vehicle recovery in the event of a breakdown. Coverage is subject to the terms and conditions of your car insurance policy.
An assessment of the cost to repair your car.
Insurance companies won’t pay out for certain risks or types of loss or damage. These will be clearly set out in the terms and conditions of your policy and are known as exclusions.
An excess is the first amount payable by you in the event of a loss, and is the uninsured portion of your loss, so when you submit a claim you’ll have to pay an excess.
A claim made on your insurance where the insurer is not 100% reimbursed on the costs of the claim from the party at fault.
Insurance Regulatory and Development Authority (IRDA)
An independent regulator for the Indian Insurance services industry to ensure that consumers get a fair deal.
Verification of your car’s physical condition.
This applies to ownership of the insured property. To insure a private vehicle, you would have to own it and suffer a financial loss if it was damaged. For example you can’t insure your neighbour’s vehicle. As you don’t own it, there would be no loss to you if it was damaged. A finance company may have an insurable interest in a vehicle if they helped pay for the purchase.
This is the main principle of insurance. Insurance exists to replace something that has been lost or damaged, and an indemnity seeks to restore the insured person to the same financial position after the loss as immediately before.
A material fact would be information that would affect an insurance company’s willingness to accept a policy, or the premium it would charge. Any information that may influence either an insurer’s decision to offer you cover or the premium they charge for it. If you leave out information which may influence a decision to offer cover, your policy may be invalidated.
A car that has been altered in any way or has equipment/accessories not standard features on the car.
Any additional drivers named on your car insurance policy aside from the main driver.
The failure to exercise care that is expected of a reasonable person in similar circumstances.
No Claims Bonus / No Claims Discount
For each year you drive without making a claim on your insurance you might get a year’s no-claims bonus, subject to a maximum. This bonus reduces the cost of your car insurance premium for the following year. This is also sometimes described as a no-claims discount.
A claim made on your car insurance where the insurer is 100% reimbursed on the costs of the claim from the person/s responsible for the accident/damage/loss.
The condition of your car before an accident including damage not related to an accident, mileage and other factors.
The cost of your car insurance policy that you pay in exchange for the insurance coverage.
Personal Accident Cover
This cover pays for your medical expenses, lost wages and/or other accident related expenses in the event of an accident. This cover is subject to the terms and conditions of your car insurance policy.
The chance of suffering a loss. Car insurance firms will assess your perceived risk when insuring your car. Factors include age, driving record, no claims bonuses.
Continuing an insurance policy once its initial term ended. For example, if you take out a 12 month policy, and then stay with the same insurer after 12 months, your policy is renewed.
The amount paid out by the insurer when a claim is made on a policy.
Someone involved in a claim who is neither the policyholder nor the insurer, for example if you are in a car accident, the driver of the other car.
Third party only
Third party cover is the minimum level of car insurance cover required by law and contains no cover for damage to your vehicle. It usually covers your legal liability for:
1. Injuries to other people
2. Damage to other people’s property
3. Accidents caused by your passengers or a driver named on your policy
Total Loss / Write Off
A car that has sustained extensive damage that cannot reasonably be repaired. A car is considered a total loss if it cannot be repaired safely or is not economically practical.
An agreed excess at the beginning of your policy that forms part of your total excess. Increasing the amount of your voluntary excess can reduce your car insurance premiums. This amount is added to your compulsory excess in the event of a claim on your insurance policy.
When the sum insured on your policy is not enough to cover the maximum possible potential loss or damage – For example insuring your car for Rs 130,000 when the car is worth Rs 150,000.
Any losses not covered by your insurance policy, such as your policy excess, any out-of-pocket expenses following an accident, eg a loss of earnings, or compensation for an injury suffered in an accident.
A written guaranteed of the integrity of your car and of the manufacturer’s responsibility for the repair or replacement of defective parts.