Bike Insurance 194 views April 8, 2021

Before purchasing a Two-wheeler Bike Insurance, understand terms like Insured Declared Value (IDV) and No Claim Bonus (NCB) as they can impact your premium outgo. IDV is the maximum sum insured amount that an insurer will give you upon filing a claim under the policy. The IDV value is similar to the market value of the vehicle. It means the IDV will change with your two-wheeler’s market price. So, IDV is the present market value of your two-wheeler. Whereas an NCB is an accumulated value that will increase after every claim-free year, helping you get a discount on premium payment upon renewal. If you want to know more about IDV and NCB, keep reading this post!

Why is IDV Important in Two-Wheeler Bike Insurance?

IDV is important in 2-wheeler insurance because if your Bike is declared as a total loss, you can get compensation from your insurer up to the IDV value of your 2-wheeler. The formula to generate IDV is as follows –

Insured Declared Value (IDV) = (Company’s listed selling price – Depreciation value) + (the cost of bike’s accessories that are excluded from the listed selling price – their depreciation value)

You should also know that your Bike IDV is fixed at the time of renewing or purchasing 2-wheeler insurance. 

Note – If the age of your two-wheeler is 5 years or its model has now become old-fashioned, its IDV will be mutually decided between the insured and the insurer. 

Do You Get Any Benefits If Your Bike’s IDV is High? 

Your premium of bike insurance depends on the IDV, especially in the case of comprehensive two-wheeler insurance. So, if your bike’s IDV is higher, you need to pay a higher premium rate. And as the bike ages, the IDV decreases, which means your payable premium will be low after renewal. So, the question is – Should a High IDV Help You in Two-Wheeler Insurance? Yes, it will help you get a high protection cover for your bike, but at a higher premium.

Note – You should declare the correct IDV of your bike while buying or renewing an insurance policy. It is essential because this will impact your premium amount and the claim amount that you will receive in case of any risk.

How Does the IDV Help You Get High Claim Amount in Two-wheeler Bike Insurance?

If your declared IDV is high, your insurance company will give you a high claim amount when a risk arises. Under Two-wheeler Bike Insurance, you can file a claim in case of a theft claim, total loss claim, accidents, etc. If you want to know the correct IDV of your two-wheeler, you can do it online with the help of a premium calculator. It is easily accessible to customers on the insurance company’s official website. With this online tool, you can calculate the policy premium and can get a suitable premium amount for your policy.

Does NCB Reduce Your Premium Amount?

Yes, with the help of No Claim Bonus (NCB), you can get a discount on your two-wheeler bike insurance premium payment. As per the Insurance Regulatory and Development Authority of India (IRDA), an insured person can get 10% to 50% of NCB in a two-wheeler insurance plan if he/she does not file a claim for 1 to 5 years.

Every two-wheeler insurance policyholder is eligible for NCB in case of no claim in the previous policy year.  Even if you switch your insurer while renewing your two-wheeler policy, you can transfer your NCB as well. To get this benefit, you need to apply for an NCB transfer at your previous insurance company and they will provide you a ‘No Claims Certificate’ at no additional cost.

The percentage of NCB increases based on the subsequent claim-free years. Check out the table below and learn how you will earn NCB on Own Damage Two-Wheeler Bike Insurance after claim-free years.

Claim Free Year (In Years)No Claim Bonus
120%
225%
335%
445%
550%

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