Here are a few terms which will make you understand insurance better
Deductible: A deductible is that amount of the claim that needs to be borne by the policyholder in case of a claim. For instance, if the deductible is of Rs 1,000, the first Rs 1,000 in case of a claim is borne by the policyholder. You can choose a higher deductible to bring your premium down, but that might be a mistake because you will end up paying a higher amount.
Insured declared value: The premium in the case of own damage (OD) vehicle cover is decided by the insured declared value (IDV) of the vehicle. IDV is the value that the insurer will pay if your car is completely damaged or stolen. In that sense, IDV is the sum insured and is calculated based on the invoice of your car minus depreciation.
Return to invoice: The Return to Invoice (RTI) is an add-on option which covers the gap between the insured’s declared value and the invoice value of the car. It’s an option that will fetch you the entire amount of loss that you incur in case of an accident leading to replacement of parts.
Engine protection cover: Automakers mention that it is unwise to crank up the car when it is stuck in water because it can damage the car engine. This add-on cover can be used to cover such instances along with the repairing cost of electrical circuit failure at a nominal additional cost.
No claim bonus: It is the discount that you get on your premiums for each year you don’t make a claim. This bonus is applicable on the premiums that apply for the OD cover in motor insurance. The maximum discount over a period of time is usually capped at 50%—on the premium.
Zero depreciation: This additional cover gives you the legal right to claim the complete replacement cost of the parts damaged in case of an accident which the policy covers. This is useful, especially in case of plastic parts. The concept of part replacement over repairs with new age cars means you stand to benefit by adding this cover. However, this cover is only applicable on cars that are not more than five years old from the date of purchase.