Sometimes understanding a bike insurance policy is difficult. It includes terms which are technical and complex to understand. Thus, some people choose to ignore the meaning and buy a policy without reading it thoroughly. To solve this here is the meaning of a few complex terms or jargons used in bike insurance:
Popular Jargons used in Bike insurance
IDV is the short-form of Insured Declared Value. IDV in insurance is the approximate market value of your two-wheeler. This is not the resale price of your bike. IDV in insurance is the base value which is used to determine the cost of your bike insurance policy. In case your bike is stolen or is considered as ‘total loss’ after an accident you will be compensated with an amount equal to IDV.
NCB is the short-form of No Claim Bonus. This is a discount on your 2 wheeler insurance premium awarded for not raising a claim against your bike insurance policy. No Claim Bonus is cumulative in nature and increases with each claim-free policy year. It can reach up to 50% discount on the cost of your bike insurance policy.
A deductible is a contribution paid by the owner of a bike at the time of claim. There are two types of deductibles in a 2 wheeler insurance policy. Voluntary Deductible and Compulsory deductible. You can choose to pay the voluntary deductible. This will reduce the cost of your bike insurance policy but will also reduce the claim amount paid by the insurance company.
Insurers might take a look at your bike before issuing an insurance policy. Inspection is also conducted if your insured bike meets with an accident. This type of insurance is conducted to understand the scope of damage to your bike.
Depreciation is the reduction in the monetary value of your bike. A bike depreciates with time due to wear and tear, and from usage. At the time of claim, an insurer will subtract the amount of depreciation before releasing the claim amount.
6. First, Second and Third Party
In bike insurance the policyholder i.e. the owner of the bike is the first party. The insurance company that insures the bike is the second party and any other person affected by the insured bike is called the third-party.
7. Third-party Liability cover
This is a type of bike insurance policy which covers the cost of repairing damages caused to the third party because of the insured bike. This policy does not cover the cost of repairing the insured bike.
8. Comprehensive Cover
This is a type of bike insurance policy which covers any third parties affected by the insured bike as well as the cost of repairing damages caused to the insured bike itself. Apart from 3rd party bike insurance and own damage cover, it also offers a cover for theft, vandalism, floods, earthquakes, etc.
9. Cashless Claim
When a bike gets damaged you can take it to a garage, which is a part of your insurer’s network for repairs. The insurer will coordinate with the garage and pay the bills corresponding to the repair cost of your bike. All you have to do is pay the deductible amount and collect your repaired bike. This is called a cashless claim.
10. Reimbursement Claim
When your bike gets damaged, you will have to inform your insurer who will then arrange an inspection to assess the extent of the damage. You can now take your bike to a preferred garage and pay the repair bills. After your bike is repaired, you can raise a claim with your insurer for receiving the cost of repairs. This type of claim is a reimbursement claim.
Add-ons are extra coverage options which can be bought with a comprehensive bike insurance policy. You can buy Add-ons to customize your insurance for bike to suit your requirements. Most popular Add-ons are Zero Depreciation Cover, Pillion Rider Cover, Roadside Assistance add-ons, etc.
12. Grace period
A bike insurance policy can have a validity of one or three years, after which it expires. After a bike insurance policy expires, some insurers allow you to renew the policy within 30 days without inspection. This is called a grace period. The duration of the grace period depends upon the terms and conditions of the insurer.
How to Buy Two-wheeler Insurance Online?
To buy two wheeler insurance online, simply visit the insurer’s website, submit the details related to you and your bike, and make the payment. Do not forget to go through the terms and conditions of your bike insurance policy.
Read informative Two Wheeler Insurance Articles at Acko.
Read all our insurance & non insurance related articles here.