It isn't new to see consumers face bitter resentment on having claims rejected or on realising that the insurance cover opted for is inadequate to meet their crisis requirement. Such scenarios arise mostly when it is too late for any corrective action. This harbours negative feelings of distrust towards the insurance provider.
What needs to be realised is that the insurance company is merely following the details mentioned in the claim policy, which the insured had willingly signed. To foster mutual trust and better understanding, it is extremely important to know how to read your policy wordings before accepting the deal.
Here are a few such clauses that are instrumental in shaping your motor insurance policy. These have been simplified to help you make an informed decision:
1. Damage To The Vehicle Insured
While reading your policy, pay special attention to the items mentioned in this list. The insurance company will only compensate you if your vehicle entails a loss or is damaged due to the conditions mentioned under this section.
2. IDV (Insured Declared Value)
The sum insured depends on your Insured's Declared Value (IDV). This is simply calculated by deducting depreciation from the manufacturer's sale price. The depreciation rates are fixed by the Insurance Regulatory and Development Authority of India (IRDAI). As your vehicle ages, the sum insured is reduced due to its depreciation.
3. Liability To Third Parties
Third party liability cover is a statutory requirement under the Motor Vehicles Act. It safeguards the interest of the third party that might be affected due to an accident caused by you. In such a scenario, the insurance company will compensate for the loss caused by the insured vehicle. Third party covers do not compensate the driver-owner for damages to the insured vehicle.