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Know The Basics Of Two Wheeler Insurance Policy

Published On Feb 02, 2022 11:00 AM By InsuranceDekho

Bike riders are more vulnerable to danger than car passengers, hence riding a two-wheeler is often regarded as riskier than driving a car. Read along to know more!

Bike riders are more vulnerable to danger than car passengers, hence riding a two-wheeler is often regarded as riskier than driving a car. To be safe, it is usually a good idea to buy two-wheeler insurance coverage. According to the coverage they give, there are three primary categories of two-wheeler insurance policies.

Know The Basics Of Two Wheeler Insurance Policy

Insurance Plans for Two-Wheelers

The three types of insurance plans available for a two-wheeler are as follows:

  • Third-Party Liability Insurance

In the event of an accident, this sort of policy provides coverage for third-party bodily injury, death, or property damage, and it protects you from having to pay these fees to satisfy these responsibilities. This plan's coverage for third-party property damage is restricted to Rs. 1 lakh. The Motor Vehicle Act of 1988 makes having this type of insurance mandatory, and driving without one might result in a fine of Rs. 2,000 and/or a three-month jail sentence.

  • Own-Damage Policy for Individuals

This sort of policy is meant to compensate you if your bike is damaged as a result of a road accident, theft, fire, natural disaster, or any other unforeseen event. Own-damage coverage was previously only offered as part of a full bike insurance package, but it is now available alone as well.

  • Bike Insurance That Covers Everything

A comprehensive insurance policy combines both own-damage and third-party liability coverage. It protects your bike from damage as well as third-party liabilities like injury, death, or property damage. This plan covers road accidents, theft, natural disasters, man-made disasters, riots, and other third-party liabilities.

What Does A Two-Wheeler Insurance Policy Exclude?

The following circumstances are not covered by a two-wheeler insurance policy:

  • Driving Illegally

It will not be covered if the damage or accident is caused by illegal driving, such as driving without a license, driving while under the influence of alcohol, etc.

  • Damage that isn't the result of a mishap

Wear and tear, mechanical/electrical failures and breakdowns, and consequential damages from a disaster are all covered under this policy.

  • Outside of the Geographical Area Covered

Every insurance coverage is only valid in the area specified in the policy document.

Two-Wheeler Insurance Terms to Know

You should be familiar with the following words when it comes to two-wheeler insurance:

  • Declared Insured Value (IDV)

The IDV is a crucial element used by insurance companies to calculate the maximum amount of money that will be guaranteed to the policyholder in the event that the insured's bike or scooter is stolen or completely destroyed. The IDV is based on the bike's current market value. Furthermore, the IDV is vulnerable to depreciation, which implies that it loses value over time.

  • NCB (No Claim Bonus)

This is the incentive offered by insurance companies to policyholders who have not filed a claim in the preceding year or longer, depending on the contract. It is only available to individuals who renew their insurance on a regular basis and within 90 days of their expiration date. Furthermore, it is only accessible in own-damage plans, not third-party policies. The NCB increases each year that goes without a claim, from 20% the first year to 25% the second, and up to 50% the third year, depending on the number of claim-free years.

  • Add-ons

These are optional coverage options for comprehensive and standalone own-damage motorcycle insurance policies. These are available for a fee. Zero depreciation, engine protection, and tire cover are some of the most popular and most-sold bike insurance add-ons.

Take Away

In a word, a two-wheeler insurance policy is a coverage under which the insurance company is obligated to reimburse you for financial obligations incurred as a result of your bike, depending on the kind of policy. Having a two-wheeler insurance plan is a sensible option since it not only assists you in meeting legal obligations but also assists you in meeting financial uncertainties as needed.

Also read - What Is Excluded Under A Two Wheeler Insurance Policy

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.

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