5 Things You Must Know about Two Wheeler Insurance
Two Wheeler Insurance: When it comes to traveling on Indian roads, two-wheelers are one of the most popular modes of transport. Whilst buying a new two-wheeler requires considering a lot of factors including, design, mileage, affordability, among others. But, there’s definitely a lot more to buying a new bike than just the actual purchase. As important as it is to make the right decision when buying a bike, it is equally important to make the correct decision when buying bike insurance.
But, as a matter of fact, insuring your two-wheeler is usually the last thing on your mind. However, you need to be pragmatic about the fact that motor insurance is an integral part of your two-wheeler buying process.
We are all aware that motor insurance is mandatory as per the Motor Vehicles Act, 1988, and this is why most of us end up buying the least possible third-party bike insurance. While purchasing third-party cover obviously seems lucrative as you have to shell out lower premiums, but, is there any point of buying insurance if it doesn’t provide any personal benefits?
So, if you have bought third-party bike insurance without considering the benefits of a comprehensive insurance policy, we’ve got your back with some great information.
Here is a List of 5 Things that you must know about Two Wheeler Insurance
- Type of Two Wheeler Insurances
There are two types of two-wheeler insurances: –
- Third-party insurance – It is the most basic cover mandated by law which provides coverage against the damage or loss suffered by third-party as a consequence of an accident involving the insured vehicle.
- Comprehensive insurance – It is an all-inclusive cover which provides coverage against third-party loss and damage, damage or loss of vehicle, as well as personal accident cover.
In addition to the above types of insurance policies, there are two types of policies based upon the coverage tenure. You can opt for a one-year policy which offers coverage for a tenure of one year or a multi-year policy that is valid for a longer term of up to 3 years.
Bike Insurance Coverage
Before you buy bike insurance online, you need to be familiar with what a two-wheeler insurance policy covers and what it does not.
To help you get a better understanding of two-wheeler insurance coverage, here is a list of perils that are commonly covered in a comprehensive bike insurance plan-
- Loss or damage to an insured vehicle caused due to natural and man-made calamities.
- Natural calamities can include lightning, earthquake, flood, storm, cyclone, hailstorm, frost, landslide, rockslide, etc.
- Manmade calamities can include burglary, theft, riot, strike, malicious act, etc.
- Personal accident cover – It covers injury , disability, or death suffered by the rider as a consequence of an accident. Personal accident cover for pillion rider can be purchased as an add-on.
- Third party liability – It covers the legal liability including accidental damages, disability, or death caused to any third-party, as a consequence of an accident.
Exclusions of a Two-Wheeler Insurance Policy
To ensure that your purchase of bike insurance online is a viable one, you need to understand each and every detail of the policy. To have a complete understanding of the policy, understanding the exclusions of the policy is just as important as understanding the coverage offered by it.
Here’s a list of the common exclusions in a two-wheeler insurance policy: –
- Any accident, loss, or damage that is caused outside the geographical area
- Claim arising out of any contractual liability
- Any accident, loss, damage and/or liability caused in case –
- The vehicle is used out of the limitations of use
- The vehicle is driven by any person other than a driver as stated in the driver’s clause; this includes not driving under the influence of alcohol or drugs, and having effective driving license, among others.
- There is any consequential loss
- Of any damage or loss due to nuclear or radioactive material
- Of any damage or loss arising out of activities like hostility, riot, invasion, war etc.
Once you have a complete understanding of motor insurance, its coverage, inclusions and exclusions, only then you can make the right choice when it comes to buying bike insurance online.
Additional Covers with Two-Wheeler Insurance
To help you extend your policy coverage and enjoy better benefits with your two-wheeler insurance policy, there are add-on covers. Riders or add-on covers provide extra coverage on payment of additional premiums. So, if you think that you need more coverage with your insurance, you can do so by buying additional coverage at a nominal extra premium.
Here are a few common two-wheeler insurance riders that you must add to your existing insurance policy: –
- Personal accident cover for the pillion rider
- Depreciation cover for specific parts of the insured vehicle
- Vehicle on-road assistance insurance
Insured Declared Value (IDV)
IDV or Insured Declared Value is the maximum sum assured fixed at the time of buying a policy that is provided in case of total loss or theft of two-wheeler. So, in case your two-wheeler suffers damages that are beyond repair in an accident or gets stolen, IDV is the compensation that the insurer will provide you.
The full amount of IDV is paid in case of Total loss as well as a constructive total loss (when more than 70% of the vehicle is damaged, and it isn’t prudent to get it repaired.
IDV is determined by the market value of your bike after deducting for depreciation (wear and tear with age). As a vehicle age, depreciation increases, IDV decreases, and as a result, the premiums fall. It is the most important factor that determines your two-wheeler insurance premium.
No Claim Bonus (NCB)
A two-wheeler plan is a one-year or multi-year (up to 3 years) contract that has to be renewed as per the policy term. In case you make a claim, you get the claim amount. But, if you do not make a claim during a year, you are entitled to earn a bonus on your premium. This bonus is known as No Claim Bonus, and it increases for every subsequent claim-free year. The rate of discount is fixed which starts at 20% for the first year, and then increases to 25%, 35%, 45% and 50% (maximum limit) in subsequent years.
Making an informed decision is always better. So, when you buy bike insurance online, compare the insurance plans based on the policy features, benefits and inclusions and exclusions, to make the right choice.