Many people who wish to buy an insurance policy find the jargon associated in the process to be a little challenging. As such, many of them do not purchase a policy just to avoid dealing with the technical terms or, contrariwise, purchase one without understanding its terms completely. Since purchasing an insurance policy for your two-wheeler is compulsory, it is only logical that you understand its technical terms.
Mentioned below are a few technical terms that are used in insurance parlance:
- First-, second-, and third-party
The owner of the bike is known as the first-party, while the insurance company that offers you the policy is termed as the second-party. Lastly, any person getting affected by the insured vehicle is called the third-party.
- No-claim bonus (NCB)
If you do not raise any claims within a policy term, you are eligible to receive a concession on the premium amount at the time of policy renewal. This is termed as the no-claim bonus or NCB. It keeps increasing with each claim-free year and you can avail a maximum concession of 50% on the premium cost.
A deductible is the amount you are supposed to bear during a claim. There are two types of deductibles when it comes to automobile insurance, namely compulsory and voluntary. While compulsory deductible, as the name suggests, is mandatory, you get to choose the amount of voluntary deductible that you want to pay. This voluntary deductible is inversely proportional to your two wheeler insurance premium, i.e. higher the voluntary deductible, lower is your premium.
- Insured Declared Value (IDV)
Insured declared value (IDV) is the approximate market value of your vehicle and is the maximum sum assured on your two-wheeler insurance policy. It is calculated at the time of purchasing an insurance policy after considering factors like the model, age of the vehicle, etc. In the event of a theft or total loss, the insurance company will repay you an amount that is equal to the IDV.
The decrease in the monetary value of your two-wheeler with time is termed depreciation. Moreover, any damages caused to the vehicle due to accidents further depreciate its value. Insurers deduct a fixed depreciation amount before releasing a claim.
The insurance company appoints people to inspect your vehicle before giving you a policy. The inspecting insurance officer checks the condition of your vehicle during this procedure to ensure that the details mentioned by you are correct.
- Third-party liability cover
The cost of repairing the damages caused to a third-party due to the insured vehicle is borne by the third party insurance for bike. However, it does not provide coverage for repairing the insured two-wheeler.
- Comprehensive cover
It covers third-party damages as well as provides coverage for any damages caused to the insured vehicle itself. Along with this, it also covers theft as well as man-made and natural calamities, etc.
- Cashless claim
If your bike gets damaged in an accident, you can take it to a garage that is in your insurer’s network list for repairs. The insurer will bear the repairing costs after you pay the deductible amount when you make a cashless two wheeler insurance claim.
- Grace period
After your two-wheeler insurance policy term expires, some insurers offer an extension wherein you can renew your policy without having to get your bike inspected. This particular time is termed as a grace period.
Buying two-wheeler insurance online is not a complicated process. All you need to do is visit the insurance company’s website, compare the policies you prefer, and purchase one that suits you best, all from the comfort of your own home.