Purchasing a two-wheeler insurance is imperative for vehicle safety against various damages. However, sometimes, bike insurance terminology leaves people confused, especially when they research and compare two-wheeler insurance policies from multiple insurance providers.
Many individuals do not know what IDV is in bike insurance, the meaning of a no-claim bonus, or anything else.
Two-wheeler insurance has its jargon that the policy owner needs to comprehend. In this guide, we will focus on the standard two-wheeler insurance policy terms.
Commonly Used Two-wheeler Insurance Policy Terms
Below are some of the standard terms associated with the bike insurance policy. These terms will smooth the process of understanding terminology before you buy a bike policy online.
Parties Under Bike Insurance
A prevalent term in two-wheeler insurance is parties. There are different parties in two-wheeler insurance plans, such as first party, second party and third party. The first party is the policyholder itself. It means the one who insured their two-wheeler.
The second party is usually the insurance company, which compensates the insured in the event of accidents. The second party charges the premium in return for two-wheeler insurance. The third party is the person who is affected by the accident by the first party’s vehicle.
Comprehensive Cover
This is a type of two-wheeler insurance policy that provides extensive coverage to vehicle owners. Compared to other bike insurance, comprehensive coverage provides coverage against various natural and man-made disasters.
The policy also compensates the policyholder against third-party and own damage. This type of bike insurance policy comes with different add-ons or riders to enhance the protection.
Third Party Cover
Another term that is common in insurance services is third-party cover. It is the insurance plan that protects against third-party damages and property by the insured vehicle. The third-party insurance policy is mandatory as per Indian law.
All vehicle owners need to buy bike insurance online before getting on the road. Driving without a basic bike insurance policy can lead to fines and penalties from the authorities.
Own Damage Cover
Own damage cover, or OD, is another type of coverage offered by the insurance company. This coverage helps protect the insured vehicle against damages and losses caused by accidents, fire, and natural or man-made calamities. It also covers damages that are beyond repair or total loss of the vehicle.
Zero Depreciation Cover
This is the add-on or rider with the comprehensive bike insurance policy by leading insurers like Tata AIG. It is an optional offering by the insurance company to offer extensive coverage to their customer. Generally the vehicle is a fixed asset which starts losing its value because of the deprecation.
The depreciation is due to vehicle age, availability of new models and general wear and tear. However, with this coverage, no deduction is applied to insured vehicle repair parts on the basis of depreciation at the time of making a claim. Due to this, individuals receive a higher claim amount.
No Claim Bonus (NCB)
Another common insurance company term that helps reduce the bike insurance policy premium is the no-claim bonus. It is an offer by an insurance provider for policyholders who have not raised a claim for a year.
The discount on the premium varies from insurance company to company. The offering encourages vehicle owners to safely ride their bikes and not submit a claim for minor damages.
Insured Declared Value (IDV)
Insured declared value, or IDV is the most popular term in a bike insurance policy. It is the actual market value of the vehicle. It helps in deciding the insured vehicle premium or the claim amount. For example, if a person’s vehicle is lost or stolen, then the IDV will be the actual market value of the vehicle after factoring the depreciation and deductibles.
The higher the IDV of a bike, the higher will be the premium. Individuals have the flexibility to choose an insured declared value at the time of buying a bike policy online. It is suggested to choose the right IDV to get the proper compensation.
Network Garage
Another popular insurance term is network garages. The purpose of these network garages is to provide cashless repair service to insured vehicles in the event of accidental damages. The insurance company generally has a tie-up with different garages all across the country.
At the time of raising a claim, the policyholder can take the vehicle to any of these network garages for repair. The policyholder does not need to pay any charges to these garages. All the dues are settled by the insurance company directly.
Roadside Assistance (RSA)
It is another offering by the insurance company, where they provide roadside assistance to policyholders in case of mishaps. This add-on comes with a comprehensive bike insurance policy.
The purpose of the add-on is to offer emergency assistance to policyholders in the event of mishaps such as flat tyres, dead batteries, etc.
Grace Period
All the insurance policy comes with a tenure. An individual can buy motorbike insurance for a specific number of years, and after that, they need to renew their policy.
If the individual fails to renew their two-wheeler insurance policy, the insurance company gives a specific extra day time to renew the policy. This extra time is called the grace period.
The grace period for bike insurance policy varies from insurance company to company.
Conclusion
When you buy bike insurance online, the policy paper uses different terminology. Individuals need to be aware of this terminology to understand the policy coverage, inclusions, and exclusions. These terms will help them understand the policy and ease the claim process, too.
