Here area unit the essential terminologies utilized in a Motor contract
- Accident: An unforeseen or unexpected event.
- Act of God: An extraordinary disruption caused by a natural mean such as a flood, earthquake, storms, lightning, etc. that cannot reasonably be foreseen or prevented.
- Accessory: It refers to parts of a motor vehicle which are not provided by the manufacturer along with the vehicle. These elements also are not essential for running of the vehicle.
- Arbitration: It is a common way of resolving motor insurance disputes rather than filing a lawsuit. Both the aggrieved party and the insurance company agree that a third party can look into the dispute and make a decision to resolve it.
- Break-In: If the insurance policy of the motor vehicle has expired and the customer seeks insurance for the same vehicle, it becomes a break-in policy.
- Catastrophe: AA violent and harsh natural event such as a calamity, disaster, and tragedy.
- Cubic Capacity: It defines the volumetric capacity of the engine of a vehicle.
- Compulsory Deductible: It is the amount of loss that the insured has to bear compulsorily for every claim.
- Comprehensive Policy: This motor vehicle insurance provides cover for third party liability plus own-damage cover.
- Contribution: If a motor vehicle is insured under two or more insurance contracts, the loss needs to be shared among the insurers involved, as per the proportion of the sum insured.
- Cover Note: It is a document issued by an insurance company providing temporary cover until a formal policy is issued.
- Depreciation: It refers to decrease in the value of your motor vehicle by normal wear and tear. Typically, depreciation is not covered under a basic motor insurance policy, unless it is mentioned explicitly in the policy wordings.
- Gross Vehicle Weight: It refers to a value specified by the manufacturer as the maximum loaded weight of a motor vehicle.
- Hit and Run accident: An accident resulting from the use of a motor vehicle/motor vehicles of which the identity cannot be confirmed from the reasonable efforts.
- Insured’s Declared Value (IDV): IDV is the sum assured fixed by the insurer at the commencement of each policy period. It is determined on the basis of the manufacturer’s listed selling price of the brand and model.
- Insurance Zones: Insurance companies have demarcated the country into two different zones. Zone A for metro cities and Zone B for rest of India. If the registration of the motor vehicle falls into Zone A, the vehicle owner needs to pay premiums at a higher rate than Zone B.
- Light Motor Vehicle (LMV): The Gross Vehicle Weight of a motor vehicle, the unladen weight of any of which does not exceed 7,500 Kgs.
- MACT (Motor Accidents Claims Tribunal): In order to resolve the claim disputes at the minimal expense, the Claims Tribunals have been constituted by different state governments under the Motor Vehicles Act, 1939.
- Market Value: The present monetary value of a motor vehicle when sold in the market.
- Material Fact: Any fact, when disclosed may affect the decision of an insurance company, related to determining a premium, writing the cover, claims settlement, and many others. The falsification of a material fact will lead to termination of the policy.
- No Claim Bonus (NCB): Upon getting a ‘claim-free’ year, you can avail a specific percentage of No-claim bonus. You can avail the NCB benefit in the form of discounts on the premium amount at the next renewal period.
- Motor Insurance Policy: It is an agreement between a motor vehicle owner and an insurance company. Under this contract, an insurer provides cover against damage/loss caused to the motor vehicle or its parts resulting from the natural and/or man-made calamities. A vehicle owner, on the other hand, needs to pay premiums to ensure this protection.
- Own Damage: The Own Damage covers you against any damage/loss caused to your vehicle arising from natural and man-made calamities as specified in the policy wordings.
- Perils: These include the uncertain events or occurrences that may cause damage to your motor vehicle. It may include Fire, flood, earthquake, etc.
- Third Party Liability: It refers to the bodily injury/property damage caused to a third party. A minimum Third Party Liability (Liability-only) could be a mandatory demand beneath the automobiles Act.
