Navigating the complex technical terms in bike insurance can feel overwhelming, especially if you are new to it. These terms are often called jargon. Understanding how to decode them will give you an edge during claim settlement and help you make an informed decision when purchasing a bike insurance policy.
This article will explore the key terms related to bike insurance.
What are the Most Essential Bike Insurance Terminologies?
If you are wondering what are the basic terms used in a bike insurance policy, here is a list of them:
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Premium
Premium is the amount you pay for your bike insurance policy each year. You typically pay the two-wheeler insurance premium in periodic instalments to the insurer to cover certain risks. The bike insurance premium depends on several factors, such as the manufacture year, location, variant, and the two-wheeler’s make and model.
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Insured and Insurer
Bike insurance is a means by which you can protect yourself financially from losses or damages incurred by the vehicle. Here, the insurer is the one who provides the insurance, while the insured is the person or asset the policy covers. However, when it comes to bike insurance, the two-wheeler becomes the insured asset.
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Own Damage (OD) Cover
Own Damage (OD) Cover is a part of the bike insurance plan that safeguards you against replacement and repair costs when your bike gets damaged because of an explosion, fire, accident, or man-made or natural calamities. It also includes damages that are beyond repair and covers theft of any scooter or bike.
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Insured Declared Value (IDV)
Insured Declared Value (IDV) comes into action in situations of ‘total loss’ where your two-wheeler becomes irreparable and needs a vital replacement. It is the maximum payable sum calculated depending on your vehicle’s market value, excluding the depreciation rate.
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No Claim Bonus (NCB)
No Claim Bonus or NCB is the reward you get for not filing any claim during the policy period. Insurers offer it either as a discount on the premium amount that comes with bike insurance or an enhanced sum insured. This kind of reward depends on the insurer. Here, you can claim the benefit at the time of renewing your bike insurance policy.
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Add-On Riders
Add-on cover addresses the damages or losses (e.g., emergency roadside assistance) not covered in your standard policy. These include Engine Protection Cover, Zero Depreciation Cover, Roadside Assistance Cover, among others. For an added premium, they help enhance your protection.
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Cashless Garages
You must get your insured bike repaired when it gets damaged. Your insurer compensates your losses in such cases. A cashless garage option speeds up the process by letting you repair your bike, whereas the insurer settles the cost amount directly with the partnered garage.
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Zero Depreciation Cover
Zero depreciation cover includes the depreciation value of the damaged parts of your bike. With such a cover, your insurer will no longer be able to deduct the depreciation value from the amount claimed. Hence, when your own bike gets damaged, you can simply reduce your out-of-pocket expenses.
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Deductibles
Bike insurance companies are responsible for paying the claim amount up to a limit. The remaining part falls under a deductible, which you need to bear. Deductibles are categorised as voluntary and compulsory. As per your preference, the latter is adjustable, while you pay the former as a mandatory obligation.
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Exclusions
A bike insurance plan is less likely to cover all conditions. In certain cases, damages stay out of reach of an insurance policy, often referred to as exclusions. A few of the conditions generally uncovered are drunk driving, illegal racing, not riding without carrying valid insurance, etc.
Final Thoughts
The premium on a bike insurance policy can be calculated using a bike insurance calculator. Your bike insurer ensures you have proper protection against major mishaps involving your bike. Therefore, it’s important to choose the right type of bike insurance and provider from a leading motor insurance company like Bajaj General Insurance.
