Owning a bike is a matter of pride for you, we know. So, it is natural that you would only want the best care and protection for your vehicle. And for the best protection for your much-loved two-wheeler, you need comprehensive bike insurance.
We also understand that the world of motor insurance can be a bit overwhelming for a first-timer. Jargon and technical terms can come in the way of understanding and selecting the correct policy that meets your requirements. To help you out in this process, we have listed down the major bike insurance terminologies. Let’s check them out.
- Third Party Insurance
This is insurance that covers any damage or losses to a third party in the case of an accident involving your bike. This does not cover own damages sustained by you. It is legally necessary to have third-party insurance according to the Motor Vehicles Act, 1988 and therefore, all insurance companies will offer this policy.
- Comprehensive Insurance
Comprehensive bike insurance offers protection from own damages along with coverage for damages to the third party in case of an accident. A standard comprehensive bike insurance policy will also offer to protect your bike from any risks arising out of theft, natural calamities like earthquakes, floods, typhoons, etc.
- Add-ons
An add-on in insurance refers to additional covers offered by the insurer that you can opt in for to ensure better protection of your bike. Add-ons are available only with a comprehensive insurance policy. They come at an extra charge to your premium. Zero depreciation, return to invoice, engine protection, roadside assistance, etc are some popular add-ons.
- No-claim bonus (NCB)
NCB refers to a bonus or a discount given by the insurance provider during renewal if you have not made any claims during the previous year.
- Insured Declared Value (IDV)
This refers to the manufacturer’s estimate of the current market value of your two-wheeler. It is calculated by deducting the depreciation that your vehicle has undergone. In the case of total loss of your bike, this is the amount the insurance company is liable to pay to you. Note that the registration cost, road tax and insurance cost are excluded while calculating the IDV.
- First, second, and third party
These terms can come up during the settlement of a bike insurance claim. The policyholder is called the first party, the insurance provider is referred to as the second party, and the other person/s involved in the incident is the third party.
- Cashless claim
If your bike gets damaged and you take it to a garage that is affiliated with your insurance provider, then the bill can be paid by the insurer directly to the garage. This is called a cashless claim.
- Reimbursement claim
In case your bike suffers losses or damages, and you go to the garage and pay the bills from your pocket, you can then raise a claim with the insurer. After inspection of the bike, the insurer will pay you the cost of the repairs. This is called the reimbursement claim.
We hope this article has increased your understanding of bike insurance. Good luck in choosing the best policy out there.
