To secure yourself financially and to remain on the right side of the law, purchasing a two wheeler insurance plan is necessary. However, it includes various terms that are not easy to understand. People tend to skip reading about these and purchase the policy without knowing what they’re getting into.
Hence, here are a few insurance jargon explained in simple words:
- First-Party, Second-Party, and Third-Party
These are terms often used in motor insurance. The person who owns the bike (and the policy) is known as first-party, your insurer is considered as the second-party. Meanwhile, any person who suffers damages due to the insured bike is termed as the third-party.
- Third-party liability cover
Buying a two wheeler insurance third party plan is mandatory as per the Motor Vehicles Act, 1988. As the name suggests, it offers coverage only for the damages caused to the third-party.
- Comprehensive cover
A comprehensive cover not only covers third-party liability but also looks after own damage. Not only that, damages caused due to man-made or natural calamities are also covered under this policy along with theft protection and so much more.
- No-claim bonus
When you don’t raise a single claim in a previous policy term, the insurance company offers you a concession termed as No-Claim Bonus (NCB). This NCB increases with each claim-free year. The highest it can offer you is 50% concession on your bike insurance premium.
- Insured Declared Value (IDV)
It is the current market value of your two-wheeler. In case your bike gets stolen or there is a case of ‘total loss’ due to accident, you will receive the amount equal to IDV.
This is the amount that you must pay while making a claim. You have two types of deductibles in a two-wheeler insurance policy: voluntary and compulsory deductible. Under voluntary, it is your choice to pay the amount, but remember it will also reduce the claim amount that the insurance company is supposed to pay. Contrariwise, compulsory deductible is the fixed amount that must be paid compulsorily to the insurer.
Before offering you the insurance policy, the insurer conducts an inspection to check the condition of your bike. In case of accidents as well, your two-wheeler will be inspected before your claim is processed.
- Additional coverages (Add-ons)
These can only be bought along with a comprehensive cover and help enhance your existing plan. You can opt from the various add-ons available such as roadside assistance, engine protector, etc. according to your needs.
As time passes, your bike is likely to get damaged, which would reduce its monetary value. Therefore, when you raise a claim, the depreciation amount will be subtracted.
- Grace period
Two wheeler insurance renewal is important once the policy term is over. If you don’t do so, your insurance policy will lapse. However, several insurers offer you with grace period of 30 days, wherein you can still renew your policy without having to go through the inspection process or losing out on the accumulated NCB.
- Cashless claim
In case of damage caused to your two-wheeler, you can take it to an insurer network garage. Under this, the bills will be settled between the insurer and the network garage. You only have to pay the deductible amount and the rest will be taken care of.
- Reimbursement claim
If your bike gets damaged and you can’t find any network garages nearby, you can take it to a preferred garage and pay the bills yourself. Later, you can file a claim to be reimbursed for the expenditure.
Purchasing a two-wheeler insurance policy online is much more convenient than the traditional method. All you have to do is visit the insurance company’s website and provide the necessary details. Now that you know the meaning of all technical terms used in two wheeler insurance, make a wise choice and buy a plan as per your needs.