Whenever a claim is made in car insurance, the payouts are made after consi...
You might know your two-wheeler inside out but do you also possess the same knowledge about your vehicle’s insurance policy? If not, read on –
A two-wheeler insurance policy has lots of aspects which you should have knowledge of. Let us see what they are –
- The type of cover – law mandates that your two-wheeler must have a 'third party liability cover which would compensate any person or property damaged through your two-wheeler. While this policy is mandatory, it does not cover your vehicle or yourself against any damages. For covering own damage a comprehensive policy is available which would also cover any damage sustained to the bike along with the mandatory third party cover.
- The premium factor – premium for your bike depends on a lot of factors which include:
- The make and model of the bike
- The engine capacity
- City of registration
- Type of cover taken (Third Party or Comprehensive)
- Insured Declared Value – Do make special note of the term 'IDV’ mentioned in the policy paper . Insured Declared Value or IDV of your vehicle is calculated by adjusting the market value of your bike against the depreciation. There is a specific table of depreciation for easier calculations. As the bike ages, depreciation increases and the premiums fall. The IDV is the effective value of the vehicle which is payable if the vehicle is completely damaged or lost.
|Age of the Vehicle||Percentage of depreciation for fixing IDV|
|Not exceeding 6 months||5%|
|Exceeding 6 months but not exceeding 1 year||15|
|Exceeding 1 year but not exceeding 2 years||20|
|Exceeding 2 years but not exceeding 3 years||30|
|Exceeding 3 years but not exceeding 4 years||40|
|Exceeding 4 years but not exceeding 5 years||50|
- Additional Covers – while a comprehensive policy covers your vehicle’s damages, certain additional covers are also available like collision cover, fire cover, insurance against the pillion rider, etc.
- No Claim Bonus – A two-wheeler plan is a one-year contract renewable every year. If there is no claim, the company pays nothing. However, for every claim free year, the policyholder is eligible to earn a No Claim Bonus which increases for every subsequent claim-free year. The rate of discount is almost fixed which starts at 20% for the first year and then increases to 25%, 35%, 45% and 50% (maximum limit) in subsequent years. This bonus reduces the renewal premium payable.
Below are some comprehensive plans and their comparative analysis for a new Yamaha Fascino bike bought in August 2015 registered in Mumbai:
|Insurer||IDV||Premium (including taxes)||Features|
|HDFC Ergo||Rs.49, 400||Rs.1442||
Covers loss to vehicle, third party liability and personal accident cover of Rs.1 lakh for driver/owner
|Reliance General||Rs.44, 000||Rs.1167||
A comprehensive policy including a third party liability, own damage and driver cover
|Bajaj Allianz||Rs.49, 706||Rs.1256||
A comprehensive cover with Rs.1 lakh personal accident cover included
Just buying a two-wheeler is not enough. Know what the insurance policy covers and costs so that you are free from any ambiguity.