Understanding the language of insurance is crucial for making informed decisions when purchasing any type of insurance. Before we delve into part two of car insurance terms explained, be sure to read and familiarize yourself with the terms explained in part one.
Here, we will demystify ten common car insurance terms to help you navigate the world of motor insurance with confidence.
Accident
A sudden, unplanned and unforeseen mishap.
Consequential loss
This refers to indirect loss caused by damage to the insured vehicle.
For instance, your car is involved in an accident and stops moving. It requires to be towed to the garage but in the towing process, your bonnet gets scratched or damaged. The damages on the bonnet due to towing would fall under consequential loss/damage as it is not a direct impact from the accident.
Excess
This is the amount that your insurer asks you to pay when you submit a claim. It is a way of accepting a small portion of the risk yourself.
For instance, your car insurance policy indicates that the insured will pay an excess of KES 10,000 when an accident occurs. If your car was damaged in an accident and the cost for repairing the damage is KES 40,000, you will be expected to pay the first KES 10,000 and the insurer will pay the remainder.
Excess protector
This is an additional payment that you make together with your premium to keep you from paying the excess fee.
Liability
This refers to your legal responsibility for any bodily injury or property damage you cause while driving.
Policy endorsement
This refers to amendments or updates that are done to a policy document after it has been issued, that change the terms of the original policy.
Policy year
This is the period between inception and the expiry of an annual policy.
Pre-Accident value
Refers to the market value of your vehicle before the accident.
Sum insured
It relates to the value of the insurance and this is the basis upon which premium is calculated and claim paid.
Third party
Any person other than you or your authorized driver who has been injured or whose property has been damaged.
In conclusion, apart from being a mandatory cover, motor insurance is very essential to protect your car against heavy repair expenses that may arise due to unexpected events like a road accident.
Knowing the above-mentioned car insurance terminologies will help you to purchase the right motor insurance policy for your car.
For any queries on motor insurance in Kenya, feel free to contact us on 0703099120 or visit CIC Motor Insurance.
