Buying a 2 wheeler insurance plan? Ten things to remember

When buying a new bike, you consider a lot of factors- affordability, design (make and model), brand value, mileage and other technical details. Insuring your bike is either the last thing you think about or rather don’t consider at all. The only time it demands your attention is when you intend to drive your two-wheeler on the road and that mandates a valid insurance cover. So, deprived of any options you blindly buy whatever policy your dealer offers without ever considering the basic pointers that you should know about your two-wheeler insurance. Here is a list of 10 basic things to know about your two-wheeler insurance.

1) Type of plan- there are basically two types of plan. a) Liability only policy- it is a mandatory third party policy that covers bodily injury and/or death or property damage of any third party. Personal accident cover is also granted only for the owner-driver. b) Package policy or comprehensive plan- apart from including the above liabilities, it also includes damage to your own vehicle. The first policy is mandated by law but opting for the second one is your choice.

2) Factors affecting your premium- the features of your bike affect the premium you eventually pay. For instance, the cubic capacity (cc) of your bike is an important consideration. According to India Motor Tariff, there are three categories- 0-150CC, 150-350CC, 350CC and above.

As the capacity increases premium increases. Moreover, the city of purchase is also important. There are two zones. Zone A consists of Ahmedabad, Delhi, Chennai, Hyderabad, Kolkata, Pune, Mumbai and Bangalore. Zone B includes all the others. Zone A cities are charged higher premiums than Zone B cities. 3) Types of coverage available- there are varieties of cover available for your two-wheeler insurance. Examples are- collision coverage, fire, theft and vandalism cover, insurance for the pillion rider, etc. So, choose the cover that would fulfill your requirement.

4) Uninsured motorist cover- though a third party cover is mandatory, yet, as is the habit of the common population, many drivers don’t have a valid cover (the cover may have been lapsed and not renewed). If you are involved in an accident with an uninsured rider, you won’t be able to get any claim and have to bear all the expenses. So an Uninsured motorist cover would help you in these cases.

5) NCB- you are entitled to receive a No Claim Bonus for every claim free is the discount on your premium. The NCB starts at 20% for the preceding claim free year and for every subsequent claim free years, the rate increases to 25%, 35%, 45% limiting to 50%

6) Cap on third party claim- the third party damage claim footed by the insurer is limited to Rs. 1,00,000. However, as per the Motor Vehicles Act, you can also restrict the cover to Rs. 6000 minimum. 7) IDV- short for Insured Declared Value, it is the value for which the vehicle is insured and remains fixed during the term of the policy. It is calculated on the basis of the manufacturer’s listed selling price after adjusting depreciation based on the age of the two-wheeler.

8) Change of ownership- if you sell your bike you can transfer your existing insurance as well. The transferee will have to inform the insurer within fourteen days and provide all the necessary information regarding the vehicle. 9) Change of vehicle- your existing plan can continue when you substitute your two-wheeler for another one provided that the premium would be adjusted on a pro-rated basis and your new bike should be of the same value.

10) Claim processing- raising and settling your claim in case of damage is the most important part of your plan. You will have to inform your insurer who will complete the necessary formalities and settle the claim. There is a concept of constructive total loss (CTL) . A vehicle is considered as a CTL when the cost of repair or retrieval exceeds 75% of the IDV. In this case the insurer will give you the IDV after deducting the depreciation on parts. These are the basic pointers that you need to remember while opting for your two-wheeler insurance policy. Just buying a bike is not all when there is the most pertinent question of insurance attached with it. When you pay so much attention to the technicalities of the bike you are buying why not adding a few technicalities of the insurance plan as well? It may prove worthwhile in the long run, isn’t it?

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