Motor Insurance 101: 5 Terms You Need to Know in Motor Insurance

Everyone wants their car to look as sleek as they first got it. No scratches, no dents, and no issues. But is that really possible? Of course not! Casualties both expected and unexpected will occur as a result of moving around and about. These casualties or damage could be as a result of a collision either self-inflicted or by third parties, a fire or even theft.

The cost to be incurred as a result of a motor damage could be enormous and oftentimes, fixing the car is almost the same as buying a new one. To mitigate the expenses likely to be incurred after damage has occurred, it is important to get your vehicle insured. 

Motor insurance can come in handy in almost all circumstances that involve motor damage. Its purpose is to shelter the insured party from losses or damages pertaining to their vehicle. This may include damage to third party property, bodily harm or injury and even death. In the event of any of this damage, you can stop “out of pocket” payments and rely on your Motor Insurance

A good grasp of common Motor Insurance terminologies is a great start to learning about it. In this article, we have broken down some of the most commonly used terminologies in Motor Insurance:

  • Insured Declared Value (IDV): This refers to the monetary value of a product as declared by the owner. It is also the maximum claim the Insurance company would pay if a product is lost, stolen or totally damaged. In Motor Insurance, it refers to the highest sum agreed upon that would be reimbursed for a car by the Insurance company if the vehicle is stolen or damaged beyond repairs.

Example: If Bayo has a Motor Insurance policy and gets involved in a car accident where his car gets damaged beyond repairs, his Insurance company would compensate Bayo with the settlement of the same monetary value as his Insured Declared Value (IDV).

  • Third-party Liability Cover: This is a part of insurance that protects the insured from any financial liability as a result of death, accidental injury, and property damage caused to a third party.

Third-party liability insurance is the minimum amount of insurance that a vehicle owner is required to possess for the vehicle to be used legally on the road.

  • No Claim Bonus (NCB): This is a discount that policyholders become eligible for when they do not make a claim throughout the previous year, somewhat like a reward for careful use of your car. It is offered to the policyholder at the time of Motor Insurance renewal as an attractive benefit to customers. 
  • Personal Accident Cover: This is a part of a Motor Insurance package that protects the owner of the insured vehicle from accidental disability and death directly caused by the car. This is a cover often offered alongside a third-party liability Insurance plan. A policyholder can buy personal accident cover for named passengers that often use the car too by paying an extra premium. 
  • Own Damage (OD) cover: This is a part of a Motor Insurance policy coverage that covers the vehicles from damages due to natural disasters, accidents and man-made disasters. This coverage does not include the losses caused to the third party.
  • If your car has an accident where it hits another car, the Own Damage Cover covers the damages caused only to the policyholder’s car. If the third party’s car obtains damages, the own damage cover would not cover these damages.
  • With the explanation of the terms above, it would be easier to navigate through insurance documents and articles. For an even better understanding, it is necessary to gain more clarification from your Insurance company. 
  • Coronation Insurance offers a step-by-step guide on the Motor Insurance plan that is best suited for your needs, and you can be rest assured that you will always be covered. So, any loss or damage that may occur, whether it be theft, fire, or vandalism, you won’t be caught unawares.
  • Call 0700342592742 today, to get a reliable Motor Insurance policy from Coronation Insurance

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