As per the Motor Vehicles Act, 1989, every car owner is liable to buy car insurance. However, we often ignore the fine prints of our car insurance policy. Like any other insurance policy, the car insurance policy also provides you a financial safety net hence it is essential to do all the due diligence before buying one.

Here are some important terms and conditions that you must check before purchasing a policy:

1. Zero Depreciation Cover

While making car insurance claims, standard insurance cover deducts the depreciation over the parts being replaced. However, with zero depreciation cover, the depreciation costs of the replaced parts are waived off. You can opt for this feature if you drive on a regular basis on crowded roads and think that chances of your car accumulating dents and scratches are always there.

2. No Claim Bonus (NCB) Waiver

NCB can reduce the cost of your car insurance premium significantly. Starting from 20 percent, NCB can go up to 50 percent. Hence, it makes sense to avoid taking small claims to stay eligible for NCB.

However, now some insurance providers have started offering NCB even after you have made a particular number of claims for a nominal amount. Depending upon your driving skills and the number of people using a vehicle, you can opt for this feature.

3. Insured Declared Value (IDV)

IDV is the amount that you are eligible to get in case your car gets stolen or gets damaged in an accident beyond repair. IDV value affects the premium amount significantly. But it is always advisable to not take IDV less than the current value of your car as it will expose you to significant financial risk in the event of theft or total loss of your car in an accident.

4. Own Damage Premium (ODP)

Own damage premium is the premium amount that a car owner is liable to make a claim equivalent to the IDV of the car. This premium is charged to settle claims in the event of natural calamity, fire, earthquake and other man-made disasters.

However, the premium of ODP depends on several things including the cubic capacity of the engine, model of the car and the geography in which the car insurance is bought. Talk to the insurance provider in advance to identify how ODP is affecting the cost of your premium.

5. Personal Accident Cover

More than a hundred thousand accident victims die in road accidents in a year. It is essential to keep yourself adequately covered to help your dependents stay financially independent in case an accident occurs.

Apart from offering lump sum amount in case of death caused due to an accident, personal accident cover also offers medical expense reimbursement and unemployment allowance caused due to temporary or permanent disability from an accident. Hence, read thoroughly about personal accident cover benefits.