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Don't get fooled by insurance terms, here's your foolproof guide

By Finserv MARKETS - Mar 12,2019
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don't-get-fooled-by-insurance-terms, here's your foolproof guide.

With nearly 1.5 lakh deaths due to road accidents, India’s roads are the most dangerous in the world. While two-wheeler insurance has been made mandatory by IRDAI, it is often found that been found that people who take insurance are either inadequately covered or don’t completely understand how to pick the right insurance for their needs. This puts them at a very high risk given the poor safety of our roads.

We have put together a guide that will help you decide how to pick the right insurance.

  • Zero Depreciation cover:

As the vehicle you own gets older, the value of its parts depreciates so whenever you make a claim, the insurance company takes this depreciation into consideration while making the payment for your claim. Zero Depreciation Cover gives full coverage and doesn’t take depreciation into factor. In case of damage to the bike, when you make a claim, the zero depreciation cover helps you get a complete claim for the cost of the damaged parts without taking depreciation into account.

  • No-Claim Bonus:

NCB or No Claim Bonus is a reward given to the policyholder by the insurance company in the form of discount for every claim-free year on the two-wheeler insurance. At Finserv MARKETS, in case you transfer your policy from another company, you can still get up to 50% No-Claim Bonus.

  • Insured Declared Value:

Insured Declared Value Or popularly known as IDV, is the market value of the bike. In case your bike meets with an accident or is stolen, the IDV is a form of deemed compensation that will be paid to you. Also, note that the IDV is calculated on the current value of the bike which takes depreciation into account and not on the purchase value.

  • Comprehensive coverage:

A Comprehensive insurance is a detailed insurance policy which ideally, every two-wheeler owner should prefer as it insures and covers for damage, accidents, natural calamities, and man-made calamities. Two-wheeler insurance at Finserv MARKETS involves no vehicle inspection on your insurance renewal in case of a policy lapse. You can also read about difference between third party cover vs. comprehensive insurance before choosing an motor insurance policy.

  • Personal accident cover:

Personal accident cover provides compensation for physical injury or accidental death to the rider or the owner of the two-wheeler. Cover for the pillion rider can also be purchased additionally. So, in case of an unfortunate accident, you get financial protection against death and disablement that was caused by the accident.

  • Surveyor:

Surveyor is the authorized person who examines the two-wheeler and reports the condition to the insurer, which helps in deciding the claim or the renewal amount. So, whenever you make a claim, a surveyor will check your bike and make a report. It will be through this report that the insurer will decide the claim amount.

  • Accidental Bodily Injury:

Life throws a curveball when you least expect it. In case of an accident, if you are injured or have become partially or permanently disabled, the insurance company will compensate you for your loss based on your policy.

  • Agent:

An agent is a mediator between the company and the policy-holder. While being a point of contact, an agent also helps you to choose the best-suited policy by providing you with comprehensive information. He understands your needs and accordingly suggests an appropriate solution to you.

  • Basic Limit:

Basic limit is the minimum liability (sum) that can be purchased as insurance. Basic limit is decided either by the law or by the insurance company.

  • Beneficiary:

A beneficiary is an individual who will receive the benefits of the policy and is also referred to as the nominee. In case of death of the insured person, the person who has been nominated (nominee) will receive the total sum of the insurance. The beneficiary can be anyone from your family or next of kin. Be it your spouse, parents or children.

  • Cancellation:

Cancellation is the discontinuation of the two-wheeler insurance by the policyholder or the company before its expiry date. Depending on the grounds of cancelling the policy, you may or may not receive the paid premium.

  • Coverage:

The maximum protection the insurance company provides in a given amount of premium is known as coverage. The coverage helps the policyholder or his/her beneficiary in recovering from the unexpected financial losses or an event by providing the insurance sum. You can always opt for the add-on covers if you are not satisfied with the policy coverage.

  • Capital Sum Insured:

In case of death or an accident, which could lead to a disability, the insurance company provides a total lump sum amount that either the policyholder or a nominee will receive. The payable amount depends on the severity of the injury.

Also, while you are looking for the best two-wheeler insurance, make sure you don’t make these mistakes –

  • Guaranteed return policies

There is nothing called ‘guaranteed return’ policies, and in case there is then the return might be as low as 5% p.a. so if you come across a policy which promises guaranteed returns, please read the fine print or check with the company or your agent.

  • Not choosing the right IDV

IDV is usually the current market value of the bike. It is calculated based on the manufacturer’s price minus depreciation (decided on the basis of your bike’s age). Most policyholders feel that if they declare a lower IDV than the market value, they will pay less premium. But people who do this don’t realize that they will be compensated a lower claim amount in case of an accident.

Whenever you consider taking the best two wheeler insurance for your bike, do remember to check all the inclusion and exclusions in the said policy. If you are looking for two wheeler insurance renewal online or are looking for a new one, you can find one on Finserv MARKETS. Apply to insure your ride, today!

“Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we works towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.”

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522