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Fundamentals of Two Wheeler Insurance

No matter which vehicle you own, having a valid motor insurance policy for your vehicle is very important for your safety and that of the vehicle at the same time. Just like car insurance insures your car, two-wheeler insurance insures your two-wheeler. Keep the following fundamentals of two-wheeler insurance in your mind before you buy a policy for your bike:

The Types of Plans Available

Broadly, there are two types of motor insurance policies offered by the insurers in India. They are:

1. Liability Specific Policies

Liability specific plan is a mandatory third-party plan, which provides coverage for the damage to the vehicle of a third party, including the coverage against bodily injuries or the death of that person. The facility of claiming personal accidental coverage is available for the rider or owner. Liability specific plans do not provide coverage for damage to your own vehicle.

2. Comprehensive Policies

A comprehensive plan provides coverage against the damages to your own vehicle along with body injury/ death/damages to a third party vehicle and the person.

If you apply for a two-wheeler Insurance policy, by default you get a liability-specific policy. It is completely up to you if you want to select a comprehensive policy added to your liability-specific policy.

Factors Influencing the Premium of Two Wheeler Insurance

There are various factors that influence the premium of two-wheeler insurance. They are:

1. Cubic Capacity of the Engine

The cubic capacity of the engine of a motor vehicle is classified into the three categories as mentioned below:

  1. 0-150 CC
  2. 150-350 CC
  3. 350 CC and above

Keep in mind that an increase in the cubic capacity means that the premium of your insurance would be increased correspondingly.

2. Purchase Zone

The purchase zone is considered as a prominent factor in determining the insurance premium for the two-wheelers.

1. Zone A - The cities mentioned below are included in Zone A:

  • Bangalore
  • Ahmadabad
  • Delhi
  • Chennai
  • Kolkata
  • Pune
  • Mumbai
  • Hyderabad

2. Zone B- Apart from the cities falling under the Zone ‘A’, the remaining cities fall under the category of Zone ‘B’.

The premium charged for the vehicles bought in Zone ‘A’ cities is generally higher than that for those bought in Zone B cities.

Two Wheeler Insurance

What coverage can you choose?

Two-Wheeler Insurance offers a variety of features in terms of coverage to make a selection from. The cover offered is against collision, theft, fire, vandalism along with the pillion rider insurance. Pick one or pick all of them; it’s your call.

1. IDV

The insured declared value of the bike is determined with the help of the age of the vehicle. It is the specific amount for which your bike is insured. The value is determined by keeping the selling price along with the depreciation amount based on the automobile’s age.

2. NCB

When you are a responsible rider and you don’t file a claim for your two-wheeler insurance during an entire year, you get a deduction on your premium amount which is known as No Claim Bonus (NCB).

The minimum No Claim Bonus that you are eligible to get on your insurance premium is 20 per cent. For every passing year, the No Claim Bonus discount is hiked by 5 to 10 per cent every year. The maximum limit for the NCB is 50 per cent.

3. Limited Third-Party Claims

Third-party damages up to Rs. 7, 50,000 can be claimed by a policyholder. The limit is set by the Insurance Regulatory & Development Authority (IRDA) of India. If you wish, you can select to reduce the cover to the minimum sum of Rs. 6,000. The specific premium of coverage will entirely depend on your insurance plan.

You may like to Read: Guide to Third Party Bike Insurance

4. Ownership Change

When you have made your mind to sell off your two-wheeler at any point, you have the option of transferring your insurance plan to its new owner. All you need is to inform your insurer within 14 days of selling your vehicle.

5. Vehicle Change

If you wish, you can go forward using your existing bike insurance when you buy a new bike. Make sure you remember that the insurance premium would be changed to the pro-rata basis.

6. Uninsured Rider Cover

There are so many vehicle owners who don’t have any third-party cover, though it is mandatory as per the Motor Vehicle Act. When you meet with an accident due to the negligence of a third party person who is uninsured, the uninsured rider coverage acts as a layer of protection to the third party.

The Verdict:

It would be imperative to understand the fundamentals of two-wheeler insurance coverage. As two-wheeler insurance is mandatory for every individual who owns a bike or scooter, you must have the basic knowledge about the same.