Insuring a two-wheeler is advisable to meet legal obligations and for protection against financial losses in the event of a contingency. But two-wheeler owners can get confused about the insurance policy that suits their requirements—third-party insurance, comprehensive or standalone policy. Third-party insurance is the most basic policy that must be availed before your vehicle hits the road, and the Motor Vehicles Act mandates every owner to have one. Standalone policy insures ‘own damages’. Comprehensive policy is a combination of standalone and third-party.
Sumit Chhazed, the co-founder & CEO of OTO—the two-wheeler financing start-up—shared with FE that insurance customisation is possible only with standalone or comprehensive plans. “It can be done with the help of add-ons or riders, but it comes with an additional premium that is worth every penny,” Chhazed said.
Two-wheeler insurance add-ons may differ from one insurance company to another, but here are some common ways to customise it:
Zero depreciation cover
The most common property of an asset is that it is exposed to wear and tear or loses its value with continuous usage. The burden of the cost of depreciation falls upon the policyholder by default, however, with Zero depreciation/Nil depreciation cover, the insurance company would cover the 100% depreciation for all parts of the vehicle except for batteries, tubes and tyres which are covered only 50%. It can opt for with a standalone own or comprehensive policy. However, nearly all insurance companies allow a maximum of 2 zero depreciation covers within a tenure, yet there are a few insurers who would allow unlimited covers during the tenure.
Bike malfunctioning is something that comes out of the blue and it can put you in a situation where you have to be rescued. However, if your bike has roadside assistance coverage, you can simply call the number provided by the insurer and help comes to you within the stipulated time frame. Be it a flat tyre or if your vehicle is towed, everything gets settled with the help of the insurance company. Apart from this, the facilities for puncture assistance, emergency fuel delivery, repair on the spot, cab service, accommodation, vehicle key lock-out assistance, spares shipment, route guidance, and teleassistance will be arranged for.
Passenger assistance cover
As the name suggests, it covers the person who sits behind the rider or the pillion rider or the passenger from fatal injuries in the event of mishaps as the life of the passenger is as important as the life of the rider.
Return to invoice
A basic insurance plan such as a standalone own damage policy or comprehensive covers the damages sustained by your bike in the event of mishappenings. But in case of Constructive Total loss which is 70% beyond repair or if the bike gets stolen, the insurance company offers Insured Declared Value (IDV) which is the market price less depreciation. IDV is relatively lesser than the invoice value made at the time of purchasing as it includes both registration charges and road tax.However, RTI add-on bridges the gap between the IDV and invoice price, also ensuring that you receive the invoice price over the IDV.
Protection of NCB
No Claim Bonus is a reward or discount offered by the insurer if the insured has made no claims for damage during the entire tenure of the insurance policy. The discount comes in the range of 20-50%. Here, the insured can either retain the amount, transfer the policy to a different insurance company, or pay a reduced premium – only applicable if not even a single claim hasn’t been made or if the insurance policy has not lapsed. The discount becomes null otherwise.Others are engine safe cover, loss of personal belongings, key loss cover, daily allowance, consumables cover and tyre damage cover.To sum up, add-ons are of prime importance to a two-wheeler owner who travels most often or uses a motorcycle for daily commute as it offers a safe, hassle-free ride and thereby provide them extra protection from their basic insurance plan.