Insurance Terms You Should Know While Buying a Policy for Your Two Wheeler
What is the first thing you look for in a two-wheeler? The brand, mileage, colour and engine of course. While all these things are important, you must not ignore the significance of motor insurance. Not only does it safeguard your two-wheeler from damages, but also protects your finances when an unfortunate event occurs.
The concepts of insurance can be a bit tricky to understand. Hundreds of terms and conditions can leave you puzzled. But, if you’ve done your homework before buying a policy, then it becomes easy to go through any insurance document. You can also compare it with other options.
More or less, most insurance companies give similar benefits to their customers. Since the final decision has to be made by you, here are a few terms or terminologies that you should know before you buy a two-wheeler insurance policy:
- Comprehensive Insurance: This is one of the most popular insurance plans. Comprehensive insurance insures your bike against the risk of theft or any damage that occurs during an accident to both the parties involved. In simple words, it covers almost every defect in your two-wheeler. A claim can be made in events like natural calamities or man-made disaster as well.
- Premium: Your insurance company or agent would define this term as the amount you must pay yearly towards your policy. But, sometimes, your premium includes extra charges. It is important to understand why you pay a certain amount every year. For example, if your two wheeler’s engine capacity is high, then your premium will also increase. Another factor is the zone under which your city falls. Typically, there are three zones – Zone A, Zone B and Zone C. Zone A cities attract higher premium.
- Insured Declared Value (IDV): Probably the first question after reading this term is – what is IDV in bike insurance? It is simply the current market value of your two-wheeler. Your insurer allows you to claim only a certain amount in case of total loss or theft. Ideally, as your vehicle gets old, the value of IDV decreases.
- Riders: If you feel like your current policy does not provide enough cover, then you can extend the coverage by adding certain riders to it. These are basically add-ons that ask you to pay an extra premium for benefits like personal accident cover, road-side assistance, etc.
- Claim: When your vehicle requires repair due to certain defects or damage, you can claim the amount you spend on it. Your insurer mentions the claim settlement ratio in your policy to give you an idea of the cover you’re entitled to.
However, you must understand that buying an insurance policy does not guarantee a hundred per cent protection to your vehicle. You should pick bike insurance only if it promises to meet most of your needs.