Two-Wheeler Insurance Terms You Should be Aware Of

by Kanika Shelatkar Insurance Consultant

Owning a two-wheeler has become more of a necessity for many people because of the ease with which you can travel from one place to another, and even escape traffic easily as compared to four-wheelers. However, these bikes are also easily susceptible to accidents or mishaps that can cause injury to you, others, your vehicle as well as to cars of others. Precisely why it is essential to have the policy to secure your two-wheeler. However, before you go ahead and select the insurance company from whom you can purchase or renew the corresponding insurance policy, you need to be aware of some of the bike insurance-related terminologies which will help you to make the best choice.

First Party / Second Party / Third Party

In terms of the two wheeler insurance, the first party is the person who purchases the policy for your two-wheeler. In contrast, the second party is the insurance company that offers the policy, and the third party is the person/property involved in the accident caused by the first party.

Coverage

This is defined as the maximum possible monetary liability for the insurance company whenever a claim is filed by the first party.

Premium

This refers to the amount paid by you to the insurance company against the insurance, which is offered for the said policy duration. It depends on a lot of factors such as the age of the vehicle, IDV, make and model, registration area, and more. The premium amount needs to be paid on or before the beginning of the policy period. 

No Claim Bonus (NCB)

This is referred to as the reward provided to the insured member for not filing any claim during the entire duration of the insurance policy. For example, say you don’t file a damage claim for the whole year for which you have paid a premium for your 2 wheeler insurance, then, you can get the NCB as a discount on own damage premium renewal.

Insured Declared Value (IDV)

It is the maximum amount payable by the insurance company to the insured member for a scenario of total loss or any damage claim of the two-wheeler. This IDV is calculated as the cost of the bike minus depreciation on its parts, excluding any insurance premiums paid as well as bike registration charges.

Once you make yourself acquainted with these commonly used terms in the two-wheeler insurance policy document, you will be able to get complete clarity on the benefits of the policy and remove all possible ambiguities.

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Created on Apr 1st 2020 01:01. Viewed 424 times.

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