Riding a two-wheeler on Indian roads can be both adventurous and dangerous, so getting bike insurance is crucial. It has even been mentioned in the Motor Vehicles Act, 1988. In addition to the financial security of your two-wheeler, bike insurance online protects you, your vehicle, and the pillion.
While bike insurance saves you financially and legally, many refrain from buying it because of the unfamiliarity they have with the various terms used for this insurance type. The terms could be related to policy purchase, renewal, and even claims.
Before purchasing a two-wheeler insurance plan, you must understand the most important technical terms to make buying, renewing, or reporting a claim easier for you. Knowing the jargon used in bike insurance will help you make an informed decision. We have thus explained some popular two-wheeler insurance terms that you may not be familiar with. Let's begin!
Here are Those Key Terms Frequently Used in Bike Insurance
To help you choose the right two-wheeler insurance policy, we have listed the most important terms you should know:
The amount you annually pay towards your bike insurance to cover certain risks is called the premium.
The calculation of the bike insurance premium depends on certain factors like the kind of bike you own, the purchase of additional coverages, location, year of manufacture of the two-wheeler, etc.
Insured and the Insurer
Bike insurance is the financial protection the insurer provides to the insured against damage or loss caused by the vehicle. The company providing the motor insurance is the insurer, and the person/entity/property covered under the policy is called the insured. The insurer charges a premium that the insured needs to pay on or before the due date to prevent the policy from getting expired and losing the policy coverage.
First, Second and Third Party
- The first party – The person who owns the bike insurance policy is the first party.
- The second party – The insurer who covers the bike against losses is the second party.
- The third party – The people involved in the accident are called the third party.
Third-party Bike Insurance
In case of an accident with the insured two-wheeler, a third-party bike insurance policy compensates for the damage caused to the third party. In India, you must mandatorily have third-party bike insurance.
Comprehensive Insurance Coverage
Comprehensive bike insurance protects the two-wheeler of the insured and, at the same time, offers third-party coverage. It comprehensively protects against theft and natural or man-made disasters and includes add-on options that you can purchase according to your budget and needs.
Insured Declared Value (IDV)
IDV in bike insurance is the market value of the bike, up to which an insurer will pay in case of damages due to an accident, natural or man-made disasters.
Zero Dep Insurance
Zero depreciation bike insurance additional coverage guarantees a higher claim amount by eliminating the capital cost allowance or the depreciation value of the replaced items in a two-wheeler.
An insurer does not cover all the costs, for example, any loss to the two-wheeler due to drunk driving. You must know of these exclusions to avoid discrepancies in claim settlement.
You can add a few additional coverages under comprehensive bike insurance online. Examples of bike insurance add-ons are emergency assistance, passenger protection, roadside assistance protection, zero depreciation protection, etc.
No-claim Bonus (NCB)
The NCB in bike insurance is a premium discount provided by the insurer if, during the policy year, no claims have been made by the vehicle owner. You can get the maximum NCB refund of 50% after five years of no claim.
A mandatory two-wheeler insurance excess is part of the amount of damage you have to pay out of pocket. All owners must pay the compulsory excess at the time of claim settlement.
While the mandatory deductible is required by law, the voluntary deductible is optional. It is an amount the insured wishes to pay out of pocket when settling the bike insurance claim. This reduces the premium amount.
Protection Against Personal Accidents
Personal accident insurance in bike protects you against monetary losses if you are subject to accidental death, permanent or total disability, or permanent partial disability. Only the insured gets this coverage.
You need to know the terms and conditions and understand technical jargon or terminology associated with bike insurance to avoid unpleasantries, especially during a claim or an emergency. This will make it easier for you to research and compare various factors among different bike insurance companies before you buy the best bike insurance.
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