Significant Terms In Two-Wheeler Insurance

A two-wheeler insurance policy is crucial to be owned by every bike owner in India. But, without proper knowledge, you can never utilize the insurance policy properly. To better understand the insurance policy, you need to be aware of the necessary terms used in the document under different components. To help you select the right insurance plan, here are enlisted some crucial terms of a two-wheeler insurance policy:

Insured Declared Value (IDV)

The Insured Declared Value (IDV) is the value of your two-wheeler prevailing in the market. It is the sum assured of your policy that refers to the maximum amount that you are entitled to receive as a claim amount in case your bike or scooter gets stolen or damaged beyond repair. The value of IDV is based on multiple factors which are considered while calculating it are bike’s make and model, bike registration number, date and location of registration, etc. The premium of your policy is directly proportional to your bike insurance policy’s IDV. However, you can make changes to your IDV value during your two-wheeler insurance renewal. 

Third-Party Liability

Third-party bike insurance, also known as liability only cover, is the basic insurance cover that compensates for any claims or financial liabilities arising from third-party damage. It is mandatory coverage under the Motor Vehicles Act in India and includes damages incurred to the third-party person, vehicle or property caused by the insured bike. Third-party insurance gives no coverage against the damage incurred by the insured vehicle. However, no compensation is given if the rider was driving the bike without holding a valid license or under the influence of alcohol during the accident. 

Comprehensive or Own-Damage Cover

The own-damage car insurance cover provides compensation to policyholders for repair costs incurred on the repair or replacement of the insured two-wheeler parts. However, it does not compensate third party liabilities and therefore, a comprehensive bike insurance policy is recommended. Comprehensive bike insurance covers the damages or loss to the insured car, but it also covers your liabilities towards the third-party. Both the own-damage cover and comprehensive bike insurance plan comes with add-on options to enhance your plan’s coverage. 

Personal Accident Cover 

Personal accident cover is designed to safeguard policyholders from financial and personal losses an accident or a mishap. This cover provides policyholders with coverage for accidental death, permanent or total disablement, and permanent partial disablement due to an accident. The personal accident cover of Rs. 15 lakh is given to the owner or rider of the two-wheeler and not the pillion. It comes with a comprehensive two-wheeler insurance plan that gives coverage for treatment of any injury incurred by you in an accident.

No Claim Bonus (NCB)

The No Claim Bonus (NCB) is a reward provided by the insurance company which can be availed by the policyholder for every claim-free policy year. In simple terms, NCB is an award in terms of a  discount which policyholders can apply to avail a reduction on their bike’s next year premium if they have not raised any claim in the policy year. With each year without a claim, the NCB benefit tends to increase from 20% and can accumulate to the maximum of 50% with five consecutive claim-free years. However, a single claim in between can terminate the NCB accrued over the years.

Conclusion

Before purchasing any two-wheeler insurance policy, every policyholder should go through the terminologies of bike insurance. The terms of insurance can confuse you while their awareness can help you choose the right policy easily and avail of its benefits without facing any unpleasant surprise during the crisis.

Also Read:

Factors That Decide Bike Insurance Premium

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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.