Two-Wheeler Insurance Basics: Understanding Your Ideal Coverage

Buying a two-wheeler insurance

On Indian roads, a two-wheeler is handier than a four-wheeler. We live in the second-most-populous country in the world. This leads to traffic jams and long travel times. However, a two-wheeler can help us cut through traffic with ease and save time, money, and a lot of trouble. However, while the risk of accidents is high on Indian roads, two-wheelers are more prone to getting into an accident or a collision. Hence, an insurance policy that can help you manage the costs of damage to the vehicle or self or third-party is a must. Today, we will talk about the basics of two wheeler insurance and how you can determine the ideal insurance coverage for your bike.

Types of two-wheeler insurance

There are three types of two-wheeler insurance policies available in the market:

  1. Third-party liability policy – This policy covers financial losses or damages arising to third-party property or person from an accident or a collision involving your two-wheeler. However, it does not cover damage/loss to your vehicle.
  2. Own-damage policy – This policy covers any damage or losses caused to your two-wheeler on account of an accident by external means, natural calamities like earthquake, lightning, fire, flood, etc., theft, riot, terrorist activity, and other natural or man-made disasters.
  3. Comprehensive policy – A comprehensive policy offers you protection against own-damage as well as third-party liability in the event of an accident or collision and natural or man-made disaster.

How to calculate the premium for your bike insurance?

Here are some important factors that affect the premium calculation of a two-wheeler insurance policy:

1. Insured Declared Value

The Insured Declared Value (IDV) or the Sum Insured is the maximum amount that the insurance company will pay for a claim. It is calculated by using the manufacturer’s listing price, model and brand, and adjusted as per the depreciation rates. The insurance company’s website lists the depreciation rates based on the age of the vehicle.

2. Cubic Capacity of the vehicle

The IRDAI releases the third-party policy rates on a yearly basis, based on the cubic capacity of the vehicle. As the cubic capacity of the vehicle increases, the premium rate rises too. The Indian Motor Tariff has created three categories of cubic capacity:

  • 0 – 150CC
  • 150 – 350CC
  • 350CC and above

3. Geography

As per the India Motor Tariff, India is divided into two parts:

  • Zone A – includes the top 8 cities namely, Mumbai, New Delhi, Kolkata, Chennai, Ahmedabad, Pune, Hyderabad, and Bangalore.
  • Zone B – the rest of the country

Vehicles registered in Zone A have higher premium rates than Zone B.

4. Age of the vehicle

As the vehicle gets older, the premium rates increase. In other words, with all other aspects remaining the same, new two-wheelers have a lower premium than older two-wheelers.

5. Discounts

Vehicles with the latest anti-theft devices or vehicle owners who are members of the Automobile Association of India usually get a discount on the premium rates. No Claim Bonus (NCB) is also offered by insurers to vehicle owners who haven’t filed any claim during the term of the policy.

Different types of claims admissible under bike insurance

Most two-wheeler owners are concerned about getting the claim processed in time. If your two-wheeler gets damaged due to an accident or collision, it is important to inform the insurer immediately about the situation. There are four situations that you can consider:

1. Total Loss or Constructive Total Loss

If the damage to your vehicle is so bad that the cost of repair or retrieval is more than 75% of the Insured Declared Value (IDV), then the vehicle is said to be in Constructive Total Loss (CTL). In such cases, the two wheeler insurance company reimburses the IDV minus the depreciation.

2. Theft of the vehicle

If your two-wheeler gets stolen, then the first thing you do is register a First Information Report (FIR) at the nearest police station and submit a copy of the same to the insurance company. If the vehicle is not recovered by the police, you receive the reimbursement from the insurer.

3. Damage to the vehicle

If your bike gets damaged and requires repairs, then you need to inform your insurance provider. Major insurance providers have a network of cashless garages where you can get your vehicle repaired, and the insurer will pay the costs directly to the garage owner. If a network garage is not accessible to you, you can get the bike repaired at any garage and get the repair costs reimbursed post submission of the required bills.

4. Third-party damages

If an accident caused by your vehicle damages third-party property, or injures a third party or leads to their death, you can reimburse the third-party through your insurance policy. Firstly, file an FIR of the incident, get the details of the damage from the third-party, and inform your insurer. The insurer will get in touch with the Motor Accidents Claims Tribunal, and reimburse the third-party as per the tribunal’s ruling.

How to buy two-wheeler insurance online?

Buying a two-wheeler insurance policy for your vehicle is simple:

  • Visit the website of the two wheeler insurance company
  • Provide the details of your two-wheeler and your personal details
  • Choose the plan and add-ons to customize the plan as per your requirements
  • Pay the premium
  • Receive the policy document at your registered email address

Summing Up

As a proud owner of a two-wheeler, you need dual protection – a helmet to protect you and a two-wheeler insurance policy to protect your vehicle. Remember, third-party liability cover is mandatory for all vehicles in India, including two-wheelers. However, a comprehensive policy offers better protection and ensures that you don’t suffer financial losses if your vehicle gets damaged due to a natural or man-made disaster or gets into an accident. Assess your riding habits and be sure about what you need from the insurance policy. Research the market, compare policies and ensure that you choose the right plan. Good Luck!

Donegal Dollop

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