5 Key Terms in Bike Insurance
Riding a bike can be as much fun as it can be dangerous and so, having two-wheeler insurance becomes essential. Apart from taking care of your two-wheeler on the financial front, the right insurance for your bike will also protect you and the accompanying rider.
5 Key Terms in Two-Wheeler Insurance
Despite these crucial benefits, individuals are often discouraged from buying online insurance for their bike. This is because the jargon in a bike insurance policy document can prevent making informed decisions. Insurance-seekers are often unaware of the meaning of common terms used in insurance for bike document such as:-
- Insured Declared Value (IDV) is the maximum sum assured for the insured two-wheeler.
- No Claim Bonus (NCB) is a discount on your premiums if no claims are made.
- Third-party insurance covers liabilities to the third party in the event of an accident, etc.
However, the world of the internet can help iron out these creases and thereby encourage the purchase of online insurance of bike. With the rising threat of road accidents, having a third-party insurance cover is mandatory under the Motor Vehicles Act.
Five Important Bike Insurance Terms
When insurance-seekers check their bike insurance policy, they need to be aware of the crucial terms to understand what is covered and what is not covered under their policy. To help you in your journey to choosing the right insurance for bike, we have enlisted the crucial terms that every insurance-seeker must be aware of:
- Insured Declared Value (IDV)
In layman’s terms, the IDV is the current market value of your bike. It is the insurance sum assured, i.e., the maximum amount you will receive in claim settlement if your vehicle is stolen or it gets damaged beyond repair. The factors that are considered while calculating the IDV for your bike include:
- Manufacturer, make and model of the bike
- Details of bike registration and the city of registration
- Date of bike registration
- The ex-showroom price of the vehicle, etc.
The bike insurance premium is directly proportional to the IDV of your bike. During your bike insurance renewal, the IDV will have changed and so before undertaking the online renewal of bike insurance, check your current IDV from your local arena dealership. You can use the Tata AIG bike insurance premium calculator to get an estimate of your bike insurance premium.
- Third-Party Liability
Third-party bike insurance, the most basic insurance type, covers the policyholder against any claims or financial liabilities arising from third-party damage. It is a mandatory cover under the Motor Vehicles Act in India and includes damages incurred to the third-party person, vehicle or property caused by the insured bike. Third-party insurance does not cover the cost of damage to the insured vehicle. Additionally, no damage will be covered if the rider was under the influence of alcohol at the time of the accident or if he/she was riding without a valid license.
- Own-Damage Cover
In the event of an accident, the own damage insurance compensates the policyholder for the expense incurred on the repair or replacement of the parts of the insured two-wheeler. It does not compensate for liabilities to the third party, and so it is often recommended to purchase comprehensive online insurance of bike that covers damages to the insured two-wheeler, third-party liabilities, and also protects your bike against additional unforeseen circumstances.
- No Claim Bonus (NCB)
The NCB is a reward that is provided by the insurance company that can be availed by the policyholder for a claim-free policy term. In other words, NCB is a discount on the bike insurance price that is awarded in the form of a reduced premium amount if a vehicle owner has not made a single claim during the term of the motor insurance policy. The maximum NCB discount is capped at 50%, which you earn after five consecutive claim-free years.
- Personal Accident Cover in Bike Insurance
Personal accident cover protects one from financial and personal losses in the unfortunate event of an accident. Under this cover, the policyholder gets coverage for accidental death, permanent or total disablement suffered from an accident, and permanent partial disablement owing to an accident. This cover is offered only to the owner/rider of the bike and not the pillion.
- Tata AIG bike insurance
Tata AIG bike insurance provides a comprehensive cover to ensure wholesome protection for yourself as well as your two-wheeler. Not only does it cover the loss and damages to the insured vehicle, but it also covers third-party liabilities and a personal accident cover of ₹15 lakhs for the owner/rider. It comes with seven unique add-on options for an enhanced layer of protection that is especially helpful to cover new and expensive bikes.
Before online renewal of bike insurance or purchase of a new bike insurance policy, it is important to be aware of the terms to avail of its complete benefit and avoid unpleasant surprises in times of crisis.
A quick revision of the article with a few commonly asked queries:
What are the terms used in insurance?
The most common terms that are a part of bike insurance include: ⦁ Bike insurance premium ⦁ Bike insurance renewal ⦁ Owner-driver ⦁ Insured Declared Value ⦁ No Claim Bonus ⦁ Third-Party, Own-damage and Personal Accident covers
What are the names of the three coverages for a motorcycle?
The primary coverages for motorcycle are:
⦁ Third-party insurance that covers liabilities to the third-party property, person, or vehicle ⦁ Own-damage insurance provides compensation for expenses incurred on the repair or replacement of the parts of the insured two-wheeler and ⦁ Comprehensive insurance protects the two-wheeler against miscellaneous scenarios while taking care of third-party liability and accidental cover for the rider.
What is the policy type in bike insurance?
Bike insurance or two-wheeler insurance policies are segregated based on the type of cover they provide. The most common types include third-party, own-damage, and comprehensive insurance.