Common Two Wheeler Insurance Terms You Should Know About
Updated On Oct 25, 2020
A quick guide that will help you understand with ease some common terms associated with two-wheeler insurance.
The world of two-wheeler insurance has its own set of jargons and one cannot comprehend a two-wheeler insurance policy document without understanding them. Also, understanding the important terms help you escape the trouble when buying, renewing, or making insurance claims. Therefore, here is a quick guide that will help you understand with ease some common terms associated with two-wheeler insurance: Learning about the above-mentioned terminologies is sure to help you make an informed decision when it comes to buying or renewing a two-wheeler insurance policy online.
1. First, Second, And Third Party
The insured member along with their two-wheeler is known as the third-party, the insurance company offering the coverage is known as the second party, and the person(s) involved in the accident with the first party is known as the third party.
2. Third Party Cover
Third-party liability cover provides compensation for the damages to the third-party individual or property in case of an accident with the insured two-wheeler. In India, it is mandatory to own at least a third-party liability cover for your two-wheeler. However, a third-party insurance policy does not cover you against damages sustained by your own two-wheeler.
3. Comprehensive Cover
This type of cover option provides protection for third-party liabilities, as well as compensates for the damages sustained by the policyholder’s two-wheeler. Also, it covers the insured against damages caused due to theft, natural or man-made calamities, etc. A comprehensive insurance policy comes with several add-on benefits that the policyholders can purchase as per their budget and requirement.
4. Insured Declared Value (IDV)
Insured Declared Value is the maximum sum payable by an insurance company in case of theft or irreparable damages caused to the insured two-wheeler. IDV in two-wheeler insurance represents the current market value of the two-wheeler.
5. Zero Depreciation Cover
It is an optional cover in two-wheeler insurance policy that provides a room for higher claim amount by providing for no deduction on the value of parts replaced in a two-wheeler based on depreciation.
6. No Claim Bonus (NCB)
It is a discount that the insured is eligible for if he/she has not made any claim in the policy term. The benefits are offered on the own damage renewal premium.
7. Personal Accident Cover
It is a law mandated cover that provides protection against legal and monetary liability to the insured in case of injuries or death due to an accident. The policy offers compensation even in case of partial or total disability.
Bike insurance add-ons are additional benefits that the policyholder can purchase with a comprehensive insurance policy voluntarily by paying an extra premium. Some common add-on benefits in two-wheeler insurance include emergency assistance cover, pillion rider cover, roadside assistance cover, zero depreciation cover, etc.
An insurance company does not cover the insured against all the expenses. For instance, the insurance company does not pay for the expenses arising out of accidents due to over-speeding or in a state of inebriation. There can be several exclusions under a two-wheeler insurance policy that a policyholder must be aware of in order to avoid any discrepancy at the time of claim settlement.
10. Grace Period
Every bike insurance policy comes with a validity period. After the policy gets expired, some insurance companies allow the policyholders to renew their policies within 30 days without any inspection. This period is known as the grace period. The duration of the grace period may vary from insurer to insurer.
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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.