5 Things You Must Know Before Purchasing Bike Insurance
Riding a bike is a passion for many. The thrill associated with it is unparalleled. But while riding, you must be careful about safety. Wearing industry-standard safety gear, following the traffic rules, and being alert is the necessary precautionary measures you must follow. Similarly, another pivotal way to secure your bike against financial losses is to buy a robust insurance cover.
In India, as per the Indian Motor Vehicle Act, all bike owners must buy bike insurance policy. Riding without valid insurance is a punishable offence, and it can lead to a hefty fine. If you are a first-time bike insurance buyer, here a few essential things to know to get the best coverage.
1. Know the type of coverage you want
Insurance companies in India offer two types of bike insurance policies – third-party cover and comprehensive cover.
The third-party liability cover is a mandatory requirement. It is a primary type of insurance policy that covers only the damages caused to the third-party’s vehicle or property and physical injuries. Under third-party liability, you cannot claim compensation for the damages caused to your own bike.
The comprehensive cover, as the name suggests, provides complete protection. It covers both third-party liabilities as well as damages to self.
So, when you buy new bike insurance policy, you must assess your needs, and choose the right coverage accordingly.
If you own a luxury bike or if you travel a long distance, it is better to buy a comprehensive policy. Whereas, if you use your bike occasionally, or use it for commuting in your locality only, a third-party cover will be sufficient.
2. Be informed about NCB
The insurance companies reward safe drivers with NCB or No Claim Bonus. The reward is generally offered to encourage the policyholder to drive safely and to discourage them from making frequent claims.
If you have not filed for any claim during a policy year, you are eligible to get NCB from your insurer at the time of policy renewal. The NCB keeps increasing every year for not filing a claim, and it can be as high as 50%. So, when you renew your policy or buy two-wheeler insurance online, ask the insurer about NCB and its term and condition so that you can take advantage of it subsequently.
3. Know about the exclusions
Most people in India assume that their bike insurance policy will provide compensation for all damages. But, this is not true. Every insurance company and every policy has specific exclusions. While buying the plan, you must carefully read the policy documents to know about the exclusions.
Exclusions are mostly the conditions or situations in which the insurer is not liable to pay for the damages caused to your bike. Generally, most insurance companies will reject your claim under the following circumstances:
· Accidents caused due to mechanical or electrical breakdown
· Damages occurred to the wear and tear of the bike parts
· Loss or damage to the vehicle due to acts of terrorism or war
· Damage to the bike if the driver was riding without a valid license
· Accidents occurred if the rider is proved guilty of riding under the influence of alcohol, drugs, and other intoxicating substances
4. Buy Add-on covers
Apart from the basic coverage assured by your bike insurance, it is paramount that you widen your coverage scope with add-on covers or riders and get better financial protection against accidents and road mishaps. The add-on covers are additional coverage options that you can purchase by paying an additional premium.
The insurance companies offer a variety of add-on covers to suit the varying needs of the people. When you buy bike insurance online, you must check the add-ons provided by the insurer. The most common types of riders’ people buy are –personal accident cover, zero depreciation cover, and roadside assistance cover.
5. Get your Insured Declared Value Assessed Correctly
The Insured Declared Value or IDV is the current market value of your bike. If your motorcycle gets stolen or gets damaged beyond repair, the insurer will pay you the IDV. In other words, the insured declared value is the maximum compensation you can get from the insurance company.
It is therefore critical that you declare the correct value to the insurer as it will have a direct impact on your premium amount. Since the value of the bike keeps changing due to wear and tear, the insurance company will calculate the IDV every year upon renewal.
The insurance companies using the following formula to determine the IDV:
IDV = Price listed by the manufacturing company – depreciation + the additional accessories installed on your bike – depreciation
No matter, if you opt for an online bike insurance purchase or if you buy your policy from an insurance agent, be wary of the critical things mentioned above to get the best out of your bike insurance policy.