If you own a two-wheeler in India, it's mandatory to have a third-party liability insurance policy. However, you can enhance the coverage by purchasing a comprehensive insurance policy. The two-wheeler insurance policy provides financial protection against theft, accidents, and natural calamities. To make the most of the policy, you need to understand the terms related to it. In this article, we'll discuss two important terms: IDV and NCB, and their significance in two-wheeler insurance policies.
What is IDV and NCB in Two Wheeler Insurance?
IDV stands for
Insured Declared Value, and NCB stands for No Claim Bonus. These are important
terms that you need to understand while purchasing or renewing a two-wheeler
insurance policy.
The Insured Declared
Value (IDV) is the maximum sum insured that an insurer will provide in case of
theft or total loss of the insured vehicle. It is the current market value of
the vehicle, which is determined by the insurer based on the manufacturer's
selling price and the vehicle's age. The IDV is the maximum amount that you can
claim in case of total loss or theft of your two-wheeler.
The No Claim Bonus
(NCB) is a discount offered by the insurer on the premium of the two-wheeler
insurance policy if no claim has been made during the policy period. It is a
reward for safe driving and maintaining the vehicle in good condition. The NCB
can be availed as a percentage of the premium, which increases every year that
you don't make a claim.
How is NCB calculated?
The NCB is
calculated based on the number of claim-free years. The percentage of NCB
increases every year as follows:
- 1st year: 20%
- 2nd year: 25%
- 3rd year: 35%
- 4th year: 45%
- 5th year and above: 50%
You can avail of a
maximum NCB of 50% on your two-wheeler insurance premium.
Can NCB be transferred?
Yes, the NCB can be
transferred from one insurer to another while renewing the two-wheeler
insurance policy. However, the transfer of NCB is allowed only if the policy is
renewed within 90 days of its expiry. You will have to provide proof of the NCB
earned in the previous policy period to the new insurer.
What is the significance of NCB in two-wheeler insurance?
The NCB is a
significant aspect of a two-wheeler insurance policy, as it can help you save
money on the premium. The discount on the premium can be as high as 50% if you
have not made any claim in the previous policy period. By maintaining a
claim-free record, you can not only save money but also become a responsible
driver.
How is IDV calculated?
The IDV is
calculated by deducting the depreciation from the manufacturer's selling price
of the vehicle. The depreciation is calculated based on the age of the vehicle
and the wear and tear it has undergone.
Factors that affect IDV
The IDV of your
two-wheeler is determined by several factors, including the make and model of
the vehicle, its age, and its geographical location. The following are the
factors that affect the IDV of your two-wheeler:
- Age of the vehicle: The older the
vehicle, the lower its IDV.
- Make and model: The make and model of
the vehicle determine its market value, which affects the IDV.
- Geographical location: The IDV is also
affected by the location of the vehicle. If you live in an area with high
rates of theft or accidents, the IDV may be lower.
- Accessories: The IDV may also be
affected by the accessories added to the vehicle, such as a music system,
alloy wheels, or any other modifications.
Is it possible to increase or decrease the IDV?
Yes, it is possible
to increase or decrease the IDV of your two-wheeler. However, you should be
careful while doing so, as an incorrect IDV can lead to financial losses in the
event of theft or total loss of the vehicle.
If you want to
increase the IDV, you can request the insurer to do so while purchasing or
renewing the policy. However, this will result in an increase in the premium
amount. On the other hand, if you want to decrease the IDV, you should do so
only if the current IDV is higher than the market value of the vehicle.
What happens if you understate or overstate the IDV?
Understating or
overstating the IDV can have serious consequences in the event of a claim. If
you understate the IDV, you may receive a lower payout than expected, while
overstating the IDV may result in a higher premium and a lower payout.
In case of a claim,
the insurer will calculate the IDV based on the market value of the vehicle. If
the IDV declared by you is lower than the market value, the insurer will pay
only the declared IDV amount. On the other hand, if the IDV declared by you is
higher than the market value, the insurer will pay only the market value of the
vehicle.
Conclusion
In conclusion, IDV
and NCB are important terms that you need to understand while purchasing or
renewing a two-wheeler insurance policy. The IDV is the maximum sum insured that
an insurer will provide in case of theft or total loss of the insured vehicle,
while the NCB is a discount offered by the insurer on the premium of the
two-wheeler insurance policy if no claim has been made during the policy
period.
By maintaining a claim-free
record, you can avail of the NCB and save money on the premium. However, you
should be careful while declaring the IDV, as an incorrect IDV can lead to
financial losses in the event of theft or total loss of the vehicle.
FAQs
- Is it mandatory to have a two-wheeler
insurance policy in India?
Yes, it's mandatory to have a
third-party liability insurance policy for two-wheelers in India.
- What is the Insured Declared Value
(IDV)?
The Insured Declared Value (IDV) is the maximum sum insured that an
insurer will provide in case of theft or total loss of the insured vehicle.
- What is the No Claim Bonus (NCB)?
The No Claim Bonus (NCB) is a discount offered by the insurer on the
premium of the two-wheeler insurance policy if no claim has been made during
the policy period.
- How is NCB calculated?
The NCB is calculated based on the number of claim-free years, and the
percentage of NCB increases every year.
0 Comments:
Post a Comment