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Insurance Terms You Must Know Before You Make A Claim

Insurance Terms You Must Know Before You Make A Claim Blog
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Are you thinking about getting motor insurance? Do you already have motor insurance, and it is time to make a claim? Whatever the case, it is essential to understand the details of your policy thoroughly. Here is the clarification of insurance terms that often trouble motor insurance policy owners.

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Third-Party Cover

We start with a term that is imperative to understand. If we are talking about a third-party cover as a part of your insurance, we refer to the damage of the third-party’s property. The task of this cover is to keep the vehicle owner protected from financial liability caused by injury, death, or physical damage to someone else’s property. Have you ever wondered why they are using the term “third party?” It is because the property is not owned by the insurance company or the policy’s owner.

Rider

A rider is a document that changes the original policy you signed. It can be a modification that waives a specific coverage or condition or can increase the benefits. Any change made to the initial contract is considered a rider. When it comes to motor insurance, the most common rider is for a personal accident.

Personal Accident Cover

If we are talking about road accidents, we might be talking about physical damage to the vehicles involved. However, there might also be personal injuries, such as accidental death, temporary or permanent disability. It is crucial to note that not all policies cover personal accidents. It might be a smart move to add this to your insurance plan.

No Claim Discount

NCD is good news for you. First, it means you haven’t made a claim in the last 12 months, which means you haven’t participated in an accident. Insurance companies see that as responsible behavior toward your vehicle, which is why they allow the No Claim Discount.

Own Damage Premium

This is the crucial component of the premium you pay for vehicle insurance. The idea of the own damage premium is to protect you from financial liabilities when events that are out of your control cause damage to your motor. We are not talking about road accidents, but rather earthquakes, explosions, fires, and other natural or man-made disasters.

Policy/Inception/Effective Date

These dates are important because they tell you when the policy becomes active. For starters, a policy date is the one you see written on the contract. The issue or inception date is the moment when the agency approves your policy. Policy and inception dates can be the same. Make sure to check the “Effective date” of your policy. From that date, the policy is active, and the legal obligations of both parties begin.

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Additional Terms You Should Know

Here are some other insurance terms that could help you when making a claim or choosing motor insurance:

  • Coverage – it is a term used to discover the benefits and protection provided by an insurance plan.
  • Claim – if a user demands a payment based on their motor insurance policy, they are making a claim. For the claim to pass, the request needs to meet the insurance terms of the plan.
  • Premium – it is the cost of your insurance plan for a specified time.
  • Insured declared value – the value of your vehicle agreed by the insurance company and you as the vehicle owner.

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