Factors to consider when insuring your new two-wheeler

The decision to buy a two-wheeler is not taken in two weeks. However, it takes several weeks or even months to find a brand, model and variant that meets your requirements.

Likewise, a similar thought process goes into choosing the right insurance partner for your brand new two-wheeler.

Sumit Chhazed, Co-Founder and CEO of OTO, says, “Some people view two-wheeler insurance as a luxury rather than a necessity, ignoring the fact that it is purchased to protect their lives and assets at the time. of an unforeseen event such as a road accident, theft and civil liability.

So, under the Motor Vehicle Act, the Government of India has made it compulsory for every bicycle owner to take out a two-wheeler insurance policy to protect the rider and the bicycle from unavoidable expenses during events that arise. Unexpectedly.

Therefore, according to experts, before you embark on buying a two-wheeler insurance policy, you may need to consider the following crucial points to avoid regretting them later.

1. Font Type: There are many two-wheeler insurers on the market. Accordingly, you are free to choose according to your preferences. But, when it comes to the type of policies, there are essential elements:-

  • Third Party Insurance Policy – ​​“The Government of India has made it mandatory for every bike owner to insure their two-wheeler under the Third Party Insurance scheme. The policy provides protection against damage caused by you to property/property of a third party and does not cover theft or damage to your own vehicle,” Chhazed explains.
    • For example – Permanent injury, death of a person, property damage
    • The policy is only valid for 1 year and will require you to renew it every year unless the policy is long term.
  • Own Autonomous – As the name suggests, it covers own damages suffered due to accidents, thefts, fires and natural and man-made calamities. Under this, says Chhazed, “the insured can choose to obtain a stand-alone, third-party policy from the same insurer or from a different insurer. In addition, the insured can extend coverage using add-ons.
  • Comprehensive – The policy is the combination of a third party and a sole proprietor that protects you against damages caused by you as well as third party expenses. For example, if your e-bike or two-wheeler is damaged in a fire, you can claim compensation according to the plan’s standards.
  • Additions – As the name suggests, explains Chhazed, “these are the additional covers that can be had with comprehensive or stand-alone policies and this further strengthens the cover”. These covers come with an additional premium, but are worth every penny.
  • Zero Depreciation Hedge – An asset is bound to depreciate over time. Generally, the depreciation of two-wheelers is the responsibility of the insured. But with this add-on, the insurer can claim the depreciation costs.
  • Other – Loss of personal effects, tire damage cover, daily allowance, engine boot cover, loss of key cover, passenger assistance cover, NCB protection, roadside assistance cover and consumables cover, return to invoice.

2) Insured Declared Value (IDV)

IDV represents the current market value of the vehicle. The IDV is the maximum amount you can claim in the event of a loss and the value decreases as the age of the bike increases.

3) Insurance premium

The insurance premium depends on many factors. The prime factor among them must be the cubic capacity. Chhazed explains, “According to Indian Auto Tariff, cubic capacity is classified as 0-150CC, 150-350C and 350CC and above. The higher the displacement, the higher the quantity. Another dependent factor is location. Depending on the location, there is zone A and zone B. Cities falling under zone A attract higher bounties than the latter.

4) Claims settlement rate

CSR determines the effectiveness of an insurance company in settling claims. It designates the ratio between the claims paid by the insurance company and the total number of claims occurring during a given financial year. Thus, says Chhazed, “to make a better decision, one must be aware of the CSR of his insurer”.

5) No claim bonus

The AON is an additional premium awarded to the insured by the insurer for not having claimed damages in a given year. “The policyholder benefits from a reduction of up to 50% on their premium when renewing the insurance next year,” adds Chhazed.

6) Digital purchase

Opting for buying insurance online has a number of advantages, as it does not involve any intermediary or agent. There will therefore be no commission, which will reduce the cost of the policy. In addition to this, experts point out that there is no paperwork and it is the most profitable purchase than the traditional purchase, which translates into low cost premiums.

Chhazed concludes, “With all of this being said, make a rational decision before purchasing two-wheeler insurance considering the above factors and the credibility of the insurer. Because once a decision is made, there is no going back.

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