When you own a two-wheeler, you need to make sure that you take care of it and maintain it properly too. It is your companion on the heavy-traffic roads of the city, and you sure it functions optimally at all times. Apart from its maintenance, you also need to get two-wheeler insurance, as it is mandatory under the Indian Motor Vehicles Act, 1998.
Having an insurance policy not only saves you from a hefty penalty, it also gives you peace of mind when riding your bike on the road.
Here is a quick guide to what you need to know when buying insurance for your two-wheeler.
1) The Type of Cover You Opt For
While it is compulsory to buy a third party liability cover that compensates any property or person damaged or injured through your two-wheeler, it does not take into account the damage caused to you and your bike. If you want coverage for yourself and your bike too, you need to buy a comprehensive two wheeler insurance policy that takes into account these factors too.
2) Factors the Affect Premiums
The premiums of your bike insurance policy vary depending upon the engine capacity, type of coverage taken — whether third party or comprehensive, the model and make of the bike and city of registration. Remember, the higher the engine capacity, the higher the premium. Premiums are different for different cities. Since a third party policy offers limited coverage, the premiums are lower.
3) No Claim Bonus
You, as a policyholder are entitled to a discount on your premium, if you have not made a claim for the entire year. This is known as the No Claim Bonus (NCB). For the preceding claim free year, the rate of discount is generally fixed and begins at 20%. For every succeeding claim free year, the rate rises to 25%, 35% and 45%, right up to 50%. This bonus reduces the renewal premium payable.
4) Insured Declared Value
You need to pay special attention to Insured Declared Value (IDV) when buying an insurance policy for your two-wheeler. It basically refers to the effective value of the vehicle that needs to be paid should the vehicle get lost or damaged. IDV is calculated by adjusting your bike’s market depreciation value against the depreciation. The depreciation increases and premiums fall as the bike ages.
5) Claim Processing
The essential part of your plan involves raising and settling your claim in case damage occurs. If you want to make a claim, your first step involves informing your insurer about the same. The insurer then completes the required formalities and makes the claim settlement. Only when the insurer has deducted depreciation on parts, do they offer you the IDV. If the repair costs rise above 75% of the IDV, the vehicle is said to be a CTL (Constructive Total Loss).
You can easily pick an insurance policy for a two-wheeler, now that you are aware of the basics and are familiar with the main concepts that go into buying insurance of your two-wheeler.