Components of Motor Insurance: Everything You Need to Know About Motor Insurance

If you’re looking to buy a vehicle insurance policy then this is the right place to begin. Learn all about the key components of your motor insurance premium to enable making a more informed purchase that addresses your needs within your defined budget. IDV: IDV means Insured’s Declared Value. It is deemed to be the ‘SUM INSURED’ for the purpose of tariff calculation and is usually fixed at the commencement of each policy period for each insured vehicle. IDV is calculated by adjusting the current Manufacturer’s Listed Selling Price (*see below) of the vehicle with depreciation percentage listed in the table below:

Vehicle’s Age	% of Depreciation
Not exceeding 6 months	5%
Exceeding 6 months but not exceeding 1 year	15%
Exceeding 1 year but not exceeding 2 years	20%
Exceeding 2 years but not exceeding 3 years	30%
Exceeding 3 years but not exceeding 4 years	40%
Exceeding 4 years but not exceeding 5 years	50%

  For vehicles that are obsolete and aged over 5 years, the IDV will be the value agreed between Bajaj Allianz General Insurance (insurer) and you (insured). *Manufacturer’s Listed Selling Price = Invoice Value + Taxes, excluding Registration and Insurance Third Party:

• Motor third-party insurance or third-party liability cover, which is sometimes also referred to as the 'act only' cover, is a statutory requirement under the Motor Vehicles Act.
• It is referred to as a 'third-party' cover since the beneficiary of the policy is someone other than the two parties involved in the contract i.e. the insured and the insurance company. The policy does not provide any benefit to the insured; however it covers the insured's legal liability for death/disability of third party loss or damage to third party property.
• A third party insurance policy is a policy under which the insurance company agrees to indemnify the insured person, if he is sued or held legally liable for injuries or damage done to a third party. The insured is first party, the insurance company is the second party, and the person you the insured injure or who claims damages is the third party.

  PA Cover for Passengers: If you have opted for this cover (which is available on extra premium) then there is compensation payable to the family members of the passengers in case of death. There is no cost of medical bills or any expenses payable to the injured passengers. Voluntary Deductible: Voluntary deductible is your option to opt for bearing a certain amount of loss from every claim. Insured may opt for a higher deductible over and above the compulsory deductible that can help him/her earn discount in OD premium. For this option, you are eligible for a discount on Own Damage Premium (ODP) as listed in the table below:

Voluntary Deductible	Discount
INR 2,500	20% on the OD Premium of the vehicle, subject to a maximum of INR 750/-
INR 5,000	25% on the OD Premium of the vehicle, subject to a maximum of INR 1,500/-
INR 7,500	30% on the OD Premium of the vehicle, subject to a maximum of INR 2,000/-
INR 15,000	35% on the OD Premium of the vehicle, subject to a maximum of INR 2,500/-

Know how a motor insurance calculator assists you in determining your premium and offers other benefits to make your research and purchase easier.