Know Your 2 Wheeler Insurance Policy
A two wheeler
insurance
policy plays an important role when your vehicle is damaged or stolen.
Hence, it is important to know the basic terms of an Insurance policy.
It helps while taking and renewing policy and passing the claim of
vehicle. Let us have a look to some important points of a two wheeler
insurance policy and its act.
The insurance policy premium is decided as per the guideline given in the
India Motor Tariff Act 2002
which is in accordance with the provisions of part II B of the
Insurance Act 1938. There are basically two types of insurance policy
comes under this act.
- Liability Only Policy: This covers Third Party
Liability for bodily injury and/ or death and Property Damage. Personal
Accident Cover for Owner-Driver is also included.
- Package Policy: This covers loss or damage to the vehicle insured in addition to above.
Factors Affecting Insurance Policy Premium
These are the following factors which affect a rating of two wheeler insurance policy.
Insured’s Declared Value (IDV): It is the value of
the vehicle for which is insured under the two wheeler insurance policy.
It remains fix for the tenure of the insurance policy. IDV is fixed on
the basis of manufacturer’s listed selling price. There is also IDV for
side car accessories etc., the selling price of which is fixed in
similar fashion if it is not listed with the manufacturer’s selling
price. IDV is calculated after appropriate depreciation applied as
applicable. Here is the table of depreciation.
After five years the IDV depends on mutual understanding between buyer and insurance company.
CC (Cubic Capacity) of two wheeler engine
As the CC of two wheeler engine increases the rate of premium also
increases. There are three kind of classification, according to India
Motor Tariff which are not exceeding 150cc, Exceeding 150cc but not
350CC and 350CC and above. Further the minimum value insured for each
category are Rs. 5,000, Rs.6,000 and Rs. 7,000 respectively.
Geography
India Motor Tariff has divided geography in two parts for India, Zone
A and Zone B. Zone A includes cities such as Ahmedabad, Banglore,
Chennai, Hyderabad, Kolkatta, Pune, Mumbai and New Delhi while Zone B
includes rest of India. The premium rating is higher in case of Zone A
compared to Zone B.
Age of the vehicle
Premium rating increases with the age of vehicle. In short, there is higher rate of premium as the age of vehicle increases.
There are certain other things also which we should know are:
Geographical area: Normally an insurance policy covers only territory
of India. However, you can increase the geographic extension to
neighboring country as well which includes Bangladesh, Bhutan, Nepal,
Pakistan, Sri Lanka and Maldives. An extra amount of Rs. 500 in case of
package policy and Rs.100 in case of other than package policy is
applicable for extension of geographical area. It is to be noted that
insurance cover does not apply when such vehicle is in transit by the
way of air or sea for the purpose of ferrying in these geographical
area.
Extension of policy term: An extension of policy term is not possible
beyond the twelve months except the condition where further extension
of less than twelve month is taken with the purpose of arriving at a
particular renewal date or for any other reasons convenient to the
insured, by payment of extra premium calculated on pro-rata basis,
provided such policies are renewed with the same insurer immediately
after the expiry of such an extension.
NCB (No Claim Bonus): A policy holder is eligible for NCB when there
is no claim made during the tenure of policy. It should be noted that
NCB applies to own damage section only. The following table shows the
rate of NCB for each year where claim is not made.
Transfer of Ownership
When there is transfer of ownership of a two wheeler, the insurance
policy should also be transferred in the name of transferee. The
transferee shall apply within fourteen days from the date of transfer in
writing under recorded delivery to the insurer who has insured the
vehicle, with the details of the registration of the vehicle, the date
of transfer of the vehicle, the previous owner of the vehicle and the
number and date of the insurance policy so that the insurer may make the
necessary changes in his record and issue fresh Certificate of
Insurance.
Change of Vehicle: A vehicle insured under a policy can be
substituted by another vehicle of the same class for the balance period
of the policy subject to adjustment of premium, if any, on pro-rata
basis from the date of substitution.
Third Party Property Damage (TPPD) Cover: The third party damage is
limited to Rs. 1 lac in case of two wheeler insurance policy. However,
the insured can at the inception of the policy, opt to restrict to the
TPPD cover to the statutory limit of Rs. 6000/- as provided in the M. V.
Act.
Insurance policy: The two wheeler insurance policy, which we take or
get from our dealer, is a package policy. The insurance policy of a two
wheeler is basically divided into two parts. First Part cover Insured
Name, address and phone number, Policy Number, Date of Issuance, policy
term, Geographical area.
Second part cover Insured Motor Vehicle details and premium
collection such as Reg. details, year of mfg, make of the vehicle, cc,
coverage, IDV, Engine No, Chassis No, and seating Capacity.
Further, IDV is bifurcated for the vehicle price, side car price and
other accessories price. Further you will see the policy divided into
two parts A. own damage and b. Third party premium for the purpose of
Premium calculation. The premium is calculated as mentioned above under
the own damage and Third Party Premium section. Own damage section is
for the vehicle and accessories part. It will also show the discounts as
applicable such as NCB, Anti Theft device, Automobile Association,
Handicap etc. Third party section shows insurance premium amount for
third party coverage.
Claim Processing
It is the most important part for a two wheeler insurance policy. If
your vehicle is damaged due to accident or any other reasons such as
specified in India Motor Act, you should first inform the insurance
policy company. You have to also inform the finance company if there is
any pending amount of two wheeler loan. Generally if you have taken an
insurance policy from the dealer, the dealer will do all the necessary
formalities for claim processing. In such case you can inform the dealer
instead of insurance policy Company about the damage in the vehicle.
Most of the insurance companies now offer cash less claim processing
facility which is very helpful in case of damage of vehicle.
Total Loss/ Constructive Total Loss (TL/ CTL): A vehicle will be
considered to be a CTL, where the aggregate cost of retrieval and / or
repair of the vehicle subject to terms and conditions of the policy
exceeds 75% of the IDV. In such cases the company will give you the IDV
amount deducting the depreciation of parts as shown below. The following
rates of depreciation shall apply for replacement of parts for partial
loss claims in respect of all categories of vehicles / accessories.
Rate of depreciation for all other parts including wooden parts is to be as per the following schedule
Theft /Stolen Vehicle: In case if your vehicle is stolen. The first
thing you need to do is, registering FIR (First Information Report) in
the police station and inform your insurance company. Then you need to
give the copy of FIR to insurance company for claim processing. If your
vehicle is not found for a specific period the insurance company will
process your claim. You may have to transfer ownership to your insurance
company using your title certificate.
Please take care of following additional points for your two wheeler insurance policy.
Do not forget to renew your policy on time to avoid extra hassle. No
claim will be processed for the period when the vehicle is not covered.
Make sure that all the details on insurance policy are correct. Incorrect information may cause trouble in claim processing.
If you are renewing your insurance policy after the term of insurance
policy make sure your vehicle is in good condition while inspection.
Any note in inspection may affect claim processing.
If your vehicle is damaged make sure to explain how it was damaged and the damage to the vehicle is due to accident only.
Make sure to claim No Claim Bonus if you have not raised any claim during the tenure of policy.