In Two-Wheeler Insurance, Everything You Need to Know About IDV And NCB

All two-wheelers in India are required to have a two-wheeler policy. However, instead of merely obtaining it, one needs to actively acquire all information about it to better make use of the insurance policy's benefits. In terms of your two-wheeler and its insurance, the insured declared value (IDV) and the no-claim bonus (NCB) are key considerations. The insured declared value of a motorcycle is referred to as the IDV. Before acquiring a two-wheeler insurance policy, this is an important element to consider. In the event of total damage to the motorcycle, the IDV determines the amount of compensation the policyholder will get for repair/replacement costs. In the event of a total loss due to an accident or theft, the insurer will pay the policyholder a specific sum insured as compensation.

All About IDV And NCB In Two Wheeler Insurance

What Does IDV (Insured Declared Value) Mean?

A two-Insured wheeler's Declared Value is essentially its current market price. When renewing a two-wheeler insurance policy, it must be precisely disclosed since it impacts not only the premium amount but also the claim amount that will be paid out in the event of any losses. The lower the IDV, the older the two-wheeler. The IDV value is negotiated directly between the policyholder and the two-wheeler insurance provider if the two-wheeler is an obsolete model or more than 5 years old. When the insurance coverage is acquired or renewed, this amount remains constant. This figure is used if your two-wheeler needs to be deemed a total loss when you make a claim for damages. It's also the maximum amount that the insurance company will payout to the insured. Aside from that, the IDV value plays a role in calculating the insurance policy premium amount since the higher the IDV reported, the higher the premium amount. The method for calculating the IDV of a two-wheeler is as follows: (the price of the two-wheeler stated by the company- its current depreciation value) + (the cost of the bike's accessories not included in the listed price- current depreciation value of the parts involved)

What Is a No-Claim Bonus, and How Does It Work?

A No Claim Bonus is given to two-wheeler insurance policyholders who have not made any claims on their policy in a single financial year. It is applied to the sum of the two-wheeler insurance policy's "Own Damage Premium." When your two-wheeler insurance coverage is renewed, you will receive this incentive. It is, nevertheless, critical to renew it on time. It's valid if you renew your coverage within 90 days after the expiration date. The NCB can range from 20% to 50% depending on how many following financial years the policyholder has gone without making a claim. As the insurance is renewed regularly and the discount grows, the amount of premium that must be paid decreases. It is feasible to transfer a two-wheeler insurance policy's No Claim Bonus because it pertains to the two-wheeler and not the owner. The original insurance carrier will then offer a "No Claims Certificate" to substantiate the discount. 

Take Away

A two-wheeler insurance policy's IDV and NCB are both critical components. They play an important role in calculating the premium for a two-wheeler insurance coverage. As a result, you must be aware of the right information surrounding them and make accurate and timely declarations. This will not only help you save money, but it will also help you avoid any potential fines.

Also read - Do You Need To Check The Expiry Date On Your Bike Insurance Policy? Here Are Three Simple Ways To Do It.