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  • A Beginner’s Guide to Two Wheeler Insurance

    Mr.Rajan was all set to buy a new two-wheeler - he had done his research, picked the dealer carefully after reading reviews, arranged for funds and had kept all documents ready for the registration. But, when he came to learn that an insurance is mandatory for two-wheelers according to the Indian law, he was quite baffled. Rajan was clueless about the ABC’s of two wheeler insurance and had to spend a lot of time & energy to learn about the process and terminologies of two-wheeler insurance.

    Given below is a complete guide to two wheeler insurance that will help beginners cruise through the process with ease.

    Why do I need a Two Wheeler Insurance?

    Even though about 10 million new two-wheelers are bought every year in India, the development in roads and other transport infrastructures are still insufficient to accommodate all vehicles. With poorly implemented traffic rules and roads with bumps and potholes, even a skilled two-wheeler driver will struggle. In case of any unprecedented mishap like road accident, theft of vehicle or damage to third-party property, a two-wheeler insurance will help you to cover the costs.

    Also, it is compulsory by law to have an insurance to drive your vehicle on Indian roads.

    Types of Two-Wheeler Insurance in India

    A third party two wheeler insurance policy or liability only policy is a basic policy required by the law. This policy covers the death, bodily injury and damage to property caused to a third-party.

    A comprehensive policy or package policy covers loss or damage to the two-wheeler by natural or man-made causes and theft in addition to what is covered by a third-party policy. A comprehensive cover offers protection against natural calamities including floods, storms etc. and man-made calamities including riots, strikes and vandalism.

    How is the Insurance Premium Calculated?

    When it comes to two wheeler insurance premium, the features of your vehicle play an important part. The Cubic Capacity (CC) of the vehicle, city of purchase and the coverage opted for and cover opted for accessories are some of the factors that decide the premium. Add-on covers are also offered by select insurers and you must pay an extra premium for add-on covers.

    What is IDV?

    Insured Declared Value (IDV) is a value that remains constant during the policy term and it denotes the value for which the vehicle is insured. Below is the formula for calculating the IDV of a two wheeler. IDV = {Manufacturer’s Ex-Showroom price + sales tax + cost of accessories not included in listed selling price} - {Cost of depreciation + registration & insurance costs}

    Two Wheeler Insurance Renewal

    It is important that you renew your insurance before the due date to maintain continuity. Most of the insurance companies offer one year insurance policies while select companies also offer long term insurance for two-wheeler. If you policy has lapsed, you must get your vehicle inspected in order to renew the insurance.

    No-Claim Bonus and its Benefits

    NCB or No-Claim Bonus is the discount on your premium if you have not made a claim during that year. Introduced to reward safe driving, policy holders can avail up to 50% discount for claim free years.

    What happens if I sell my vehicle?

    If you sell your vehicle, you will be able to transfer your two-wheeler insurance also. The new owner will have to notify the insurer within fourteen days after purchase and give all relevant information regarding the vehicle to transfer the insurance.

    How do I file a Claim?

    In case of an unfortunate mishap, you will have to contact your insurer through mail or phone to initiate the claims process. You will be asked to submit the claims form along with relevant documents like driving license, FIR (in case of theft) and estimate of repairs (in case of an accident). After the damage is assessed by a surveyor, you will receive suitable compensation from your insurer.

    If you are wondering how to select the right insurance policy for your vehicle, make use of third-party comparison sites to compare the coverage and premium costs. Learning the terms associated with motor insurance will save you a lot of hassles in future and will also prove useful in the long run.

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