One cannot buy a two-wheeler insurance policy without understanding the jargon. To understand your insurance policy documents with ease, you must know some common terminologies related to two-wheeler insurance. If you don’t know these, you might have trouble buying, renewing, as well as raising claims. Therefore, here’s a quick guide for you to understand all the terms associated with bike insurance
- First, second & third-party
The insured member, along with their two-wheeler, is termed as the first-party.
The insurance company offering the coverage is referred to as the second-party.
The person(s) who were involved in the accident with the first-party are known as the third-party.
It is the maximum monetary compensation that the insurance company will provide to the policyholder in the event of a claim. It is also called the maximum sum insured.
Premium is the amount you pay the insurer for offering you the insurance policy. You are supposed to your premium on time before the policy term ends to maintain the cover. The amount payable as two wheeler insurance premium
depends on various factors like the vehicle cost, make and model, add-on benefits availed, etc.
- Third-party liability cover
This cover provides compensation for damages to the third-party’s person or property in the case of an accident with the insured vehicle. Indian laws make it mandatory to have a basic third-party coverage policy for your vehicle. However, this cover does not compensate for damages sustained by the policyholder or their vehicle.
- Comprehensive cover
A comprehensive insurance for two-wheeler provides extensive coverage over and above the third-party liability, i.e. it also compensates for damages sustained by the policyholder. Moreover, it provides coverage against damages caused due to natural or man-made calamities, theft, etc. You can even purchase add-ons to extend the benefits.
- No-claim bonus (NCB)
If the insured hasn’t made any claims in the previous policy term, then they’re eligible for a concession on premium during policy renewal. It is offered as a percentage discount on the premium amount.
- Insured Declared Value (IDV)
You must have come across the term and wondered what is idv in bike insurance
? To put is simply, in the case of theft or irreparable damages to the insured vehicle, the maximum sum payable by the insurance company is termed as the Insured Declared Value (IDV). It represents the current market value of the bike.
- Zero Depreciation Cover
This cover offers zero deduction on the value of parts replaced during repair without factoring in depreciation. This means that you will receive the complete replacement cost as opposed to the depreciated amount in the event of a claim. Also, this cover is optional (add-on) and can be availed with a new policy as well as during renewal.
- Personal Accident Cover
Another law-mandated cover, it provides compensation to the insured in the case of injuries or death due to an accident. Compensation is also provided to the rider in the event of partial or total disability.
Before purchasing the policy, you must go through the policy documents to check what is included/excluded in/from your coverage. This will come in handy when you have to raise a claim. You can always opt for additional cover if your policy excludes a certain benefit.
Need for two-wheeler insurance
Purchasing a two-wheeler insurance policy is convenient. Many individuals flout traffic rules, which is a big reason for accidents. No matter how skilled you are at riding a motorcycle, an accident is unpredictable. For situations like these, you require a two-wheeler insurance policy to cover the accident costs. Also, it is mandatory by law to have third-party two-wheeler insurance to drive your vehicles on Indian roads.