Insured Declared Value (IDV) and No-claim Bonus (NCB) are crucial variables in any two-wheeler insurance policy. While the first one determines the amount up to which you will get covered against unforeseen circumstances involving your insured two-wheeler, the second one translates into lower policy premiums. The details about both the aspects concerning two-wheeler vehicles are mentioned below:
What is IDV and its Purpose?
The IDV in two wheeler insurance is determined when the insurance coverage is purchased or renewed. The IDV of a motorcycle is referred to as the IDV. Before acquiring a two-wheeler insurance policy, this is an essential element to consider.
In the event of complete damage to the motorbike, the IDV determines the compensation the claimant will get for repair/replacement costs. In case of destruction due to an accident or robbery, the insurer will pay the policyholder a specific amount as compensation.
Your motorcycle's value starts to depreciate as soon as you buy it. Your vehicle's IDV is directly proportionate to your insurance premium. As a result, your insurance price will decrease as your vehicle ages. The charge will be lower if the IDV is low.
How Can You Figure Out the Insured Declared Value?
The method for calculating your bike's actual insured stated value is as follows:
IDV = current market value – (depreciation value + road tax +registration & insurance costs).
You may also use an online IDV calculator to determine your motorbike's insured value. Several IDV calculators are simple to comprehend and free to use.
Essential Considerations Before Calculating IDV
Before calculating IDV, there are a few things to think about.
- Check websites offering an accurate IDV assessment.
- If you suffer complete loss or theft of your bike, the IDV is the highest reimbursement you would get.
- The correct declaration value will make the claims procedure go more smoothly.
- Examine the premium price and see whether it has been appropriately calculated using your bike's IDV.
- Ascertain that the premium cost is calculated using the IDV.
IDV Value for Two-wheelers Over the Age of Five Years
If the bike is older than five years or is an obsolete edition, a consensual understanding decides the insured stated value between you and the insurer. The insurance provider cannot refuse to renew your two-wheeler insurance policy if you have had adequate coverage for the previous five years.
However, most add-on covers may not be accessible after five years. This includes zero-depreciation bike insurance coverage, engine and gearbox coverage, and return to invoice coverage, among other things.
Furthermore, some bike insurance companies may increase the cost of the bike because it is older and more prone to break down sooner rather than later. This may occasionally put a few two-wheeler owners out of business. Therefore, it is essential to examine the available options to pick the most satisfactory two-wheeler insurance coverage.
What is NCB?
An NCB in two wheeler insurance is a decrease in premium granted by insurance companies to policyholders who have not made a single claim throughout the policy duration. It comes to you on renewal.
NCB Benefits in Two-wheeler Insurance
- Helps Reduce Your Premium Amount
The NCB reduces your renewal premium amount. After five consecutive claim-free insurance years, you can reduce your premium by up to 50%. The premium can be reduced by 20% for the second year, 25% for the third year, 35% for the fourth year, 45% for the fifth year, and 50% for the sixth year. This comes on renewing the policy on time or within 90 days of the policy expiration date.
Read more - How to Calculate NCB for Two Wheeler Insurance?
- Easily Transferable
The NCB you earn for driving safely and without filing a bike insurance claim is yours to keep. As a result, you can transfer it to the new company if you wish to do so. You can benefit financially from it.
How Can You Transfer Your NCB to a New Bike Insurance Policy?
You can transfer your NCB while buying a new bike or when switching to a new insurer.
- Step 1: Notify your existing insurance provider that you are switching to a new bike insurance plan.
- Step 2: Provide an NCB certificate to your new insurance provider after that.
- Step 3: The new insurer will check the documents and details thoroughly before approving the NCB transfer.
- Step 4: If you do so on renewal, pay the applicable premium, which would obviously be lower.
Documents Necessary for NCB Transfer
Here are the documents that you'll need to transfer your NCB from your previous bike insurance to your new one:
- The NCB transfer document.
- The original policy copy.
- Certificate of insurance (Form 51)
- Buyer-seller agreement forms (Form 29 and Form 30)
- Old bike registration certificate transfer or ownership transfer certificate (when selling the old bike).
- A delivery note (when selling the old bike).
- NCB certificate.