There are two types of policies – Third party insurance and Comprehensive Insurance Policy

Third party insurance policy covers legal liability of the insured towards death, injury to persons and damage to property of the third party. This cover is a must and minimum as per the Motor Vehicles Act for using any vehicle in a public place. This is also known as ‘Act only’ Insurance or Liability only cover.

Comprehensive insurance policy covers the damage or loss to the vehicle due to accident, theft, fire or natural disaster, in addition to the third party liabilities.

The dealer will arrange for the insurance, as insurance is mandatory for vehicle registration under Motor Vehicles Act. But, if the insurance is to be purchased online, the details of the new vehicle like Engine capacity, Engine Number and Chasis Number is required. Based on the Proforma invoice, the details can be filled up in online mode.

Details of the previous insurance policy is required if no claim bonus is to be availed.

The premium is calculated on the following factors for the Own Damage cover (Comprehensive cover) and the Third party cover.

• Engine CC – Engine Cubic capacity
• The IDV (Insured Declared Value) of the vehicle
• Where the vehicle is registered - Your geographical location
• No Claim Bonus, accumulated over claim free years
• Any add-on cover for extra electrical or electronic fittings, cover for pillion riders etc
• Discounts for membership of Automobile Associations, anti theft devices etc.

IDV is the Insured Declared Value of the vehicle. It is the sum insured fixed at the commencement date of the policy and normally filled by the proposer in the proposal form. It is the amount which the insurer will pay at the time of claim, if the vehicle is lost or stolen or damaged beyond repair. IDV will decrease with the increase in the age of the vehicle.

Insurance company gives discount on the Own Damage section premium for a claim free year to incentivise accident free driving. This is called No Claim Bonus. The discount starts at 20% and is cumulative. The discount increases with every claim free year. NCB can be availed when policy is renewed before the expiry date. The benefit can be also availed if the policy is renewed before 90 days from the date of expiry.

Add-on covers provide additional protection or extra benefits / less deduction when a claim is preferred. Extra premium is to be paid and they are optional.

Zero Depreciation cover - no depreciation on parts to be replaced in a claim.

Electrical or non electrical extra – This cover is for the insurance of extra items fitted in the vehicle. This is part of own damage section of comprehensive policy.

Personal Accident cover for pillion riders.

The main discount is the No Claim Bonus (NCB) – discount for claim free year.

Membership discount – Discount is given if the insured is the member of recognised Automobile Association of their respective region. For example, for Chennai, the membership is to be with Automobile Association of Southern India.

Loyalty Discount – some insurers give discount for insured for their continuous renewal.

Occupational Discount – some insurers give discount for professionals as they are deemed as safe drivers.

Installation of anti-theft and safety devices – Discount is given as this improves the risk against theft.

Discount for longer tenure – for 2 or 3 years.

The following are the exclusions of two wheeler insurance policy.

(Policy may be referred for exact wordings, as there may be some changes from one insurer to another)

• Damage due to normal wear and tear of the vehicle
• Depreciation or any consequential loss due to normal use of the vehicle
• Loss from mechanical or electrical breakdown
• Damage to tyres and tubes in the normal course
• Any loss due to vehicle being used for purpose other than for which it is meant to be used
• When the vehicle is driven by the person without proper driving licence
• Loss occurring when the driver is under the influence of drugs or alcohol
• Any loss due to nuclear risks

A Long Term Two Wheeler Insurance Policy is issued for a longer term more than 12 months. The policy is for a term of 2 to 3 years. The policy need not to be renewed after 12 months.

• No hassle of renewing after 12 months
• During the term of the policy, the IDV of the vehicle is not changed. This depends upon the insurer, as some reduces the IDV for the second and third year.
• Insurers are not allowed to revise the premium rates during the tenure of the policy even when a claim is made under the policy.
• Discounts are given for long term policy depending upon the tenure

Yes, the policy can be cancelled. The premium refund depends upon the tenure utilised, the terms of the policy and differs from one insurer to others. Some insurers give refund even when a claim is made. Although the refund terms & conditions vary from one insurer to another, they should be reviewed before purchasing the policy.