Compensation
One of the basic principles of insurance is that when the insured has suffered a loss he should be placed in exactly the same financial position as he was in before the loss took place. Compensation is a term that can be used to describe salary or earnings, in car insurance we are using it in the context of “what is seen as an equivalent.”
If you are involved in a car accident, the compensation you will receive, according to the laid down terms of your policy, should place you in the same situation you were in before the accident. However, there are limits to all insurance benefits; if not, no insurance company will survive financially. All the benefits and compensation applicable to the different risks are listed in your policy schedule.
Compensation can take on various forms: – when you claim after an accident, your car will be repaired as compensation for the damage to the car. You may also receive medical compensation for injuries you may have sustained in the accident. When claiming compensation you must follow the insurance company procedure which will include the completion of the claim form, reporting the loss or accident damage to the police and other rules as specified in your policy.
You can only claim for loss or damage if the specific event is covered in your car insurance policy.