Common Clauses in Insurance Policy for Bikes and What They Mean

Bike insurance is crucial for legally riding in India and staying financially protected. However, when you plan to buy an  insurance policy for bike, you may get confused with the terms and clauses in the policy. Hence, in this article, we will discuss the common clauses for you to understand to make an ideal choice when choosing the right coverage for your bike.

11 Commonly Used Terms in Bike Insurance Policy

Understanding the commonly used terms in bike insurance policy will help you make an informed decision when choosing the right plan according to your insurance requirements. Here are some common terms that you must know:

1. Premium

It is the amount that you must pay to the insurance company every year to avail the bike insurance benefits. You must pay the premium periodically to receive financial coverage for specific risks. In addition, the insurance company considers the bike’s model, manufacture year, location and other crucial factors to determine the premium amount.

2. Sum Insured

The sum insured refers to the total amount you can receive from the insurance company when you file for a bike insurance claim. However, the sum insured may differ depending on the plan. If you have opted for a comprehensive plan, you will receive wider coverage than basic or third-party bike insurance.

3. Third-Party Liability Insurance

It is a type of bike insurance that offers coverage for the damages and injuries caused to the third party because of your bike. According to the Motor Vehicles Act of 1988, third-party insurance to legally ride your bike in India. However, it does not cover the financial losses to you or your bike in case of an unfortunate incident.

4.  Standalone Own Damage Insurance

A standalone bike insurance plan offers you financial coverage if your bike gets damaged by thefts, accidents, natural calamities, etc. It provides financial assistance against such incidents and enables you to repair and replace the bike components without paying anything from your pockets.

5. Insurer

Insurer refers to the insurance company that offers your financial protection in case of damages or losses against your bike. The insurer charges a premium from you periodically for taking the risk to provide your financial security to your bike. However, you must pay the premium within the specific renewal due date to enjoy the insurance benefits.

6. No Claim Bonus

As the name suggests, insurance companies like ACKO Insurance offer you a discount if you have not filed any insurance claim during the insurance tenure. You can claim this benefit when you renew your existing bike insurance, as it offers approximately a 50% discount if you have not filed any claim for five consecutive years. Moreover, the discount increases gradually with each consecutive claim-free year.

7. Insured Declared Value

The Insured Declared Value refers to the approximate market value of your insured bike. Using this value, the insurance company determines the premium of your bike insurance. In addition, it is the maximum amount the insurance company will pay you when you file an insurance claim against loss or theft of your bike.

8. Policy Inclusions and Exclusions

The bike insurance plan inclusions refer to the things the insurance company will offer you coverage. In short, the insurer will provide financial assistance for the things included in the inclusion list. On the other hand, an exclusion comprises certain circumstances or scenarios when the insurer will not offer any financial assistance. Hence, you must go through the inclusion and exclusion lists before choosing a bike insurance plan.

9. Zero Depreciation Cover

It is an add-on feature that you can opt for in your insurance policy for bike. It offers financial assistance for the depreciation of the replaced parts of your insured vehicle. You can utilise this benefit to file a higher claim amount, as you will get coverage for the total value of the damaged part.

10. Cashless Claim

One of the biggest benefits of a bike insurance policy is the cashless claim feature. It allows you to repair your damaged bike at the insurer’s network garage without paying anything from your pocket. The insurance company has tie-ups with these garages, and they pay directly to the garage on your behalf.

11. Reimbursement Claim

A reimbursement claim feature allows you to repair your damaged bike at a garage according to your preference. Under this facility, you have to bear the expenses of such repairs initially. However, the insurance company will reimburse the amount once you submit the original bills or receipts of the repair work.

Final Words

Henceforth, the bike insurance plan contains several terms and clauses which are crucial for you to understand to choose the perfect insurance policy. Once you understand the clauses, you can look for better plans and compare the features to select the ideal insurance plan that fits your requirements.

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