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.

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.

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.

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

[Source: http://autofarm.blogspot.in/2012/03/know-your-2-wheeler-insurance-policy.html]