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Top 10 Terms Related to Bike Insurance You Didn’t Know


You must have come across a set of jargons related to 2 wheeler insurance policies. Understanding these terms will help you during the purchase/renewal of the bike insurance policy. It will also ease your journey of raising claims and their settlements. Thus, we bring to you an array of two-wheeler insurance terms that you must be aware about.

1.   Policyholder

A policyholder is an individual who purchases the policy for the protection of his/her two-wheeler. The policyholder must adhere to the terms and conditions of the policy. He/she is the one to pay the premium amount to the insurance company.

2.   Premium

The premium is the amount the insured member pays to the insurer in return for the insurance cover. The premium is for a fixed term and payable every year. The insurer decides the final amount of premium based on several factors such as the model, make, age and condition of the vehicle, modifications done to the motorcycle, etc.

3.   Third-Party Cover

This type of bike insurance policy is a liability-only cover. As per the IRDAI, taking a third-party cover is mandatory. IRDAI also fixes the premium for this cover every year. Here, the protection is only for the injuries or damages that affect the third-party property, two-wheeler, or person. This cover does not provide protection to the policyholder or the damages to his/her property or vehicle.

4.   Own Damage

An own damage covers for the damage, loss, or accident to the insured vehicle, along with the third-party liability for property damage, insured’s injury or death. Under this 2 wheeler insurance cover, the insurance company pays the incurred expenses for repairs or replacements of the parts damaged in an accident.

5.   Comprehensive Cover

This type of cover offers third-party liability. It also covers for damage/injury/death to the insured, his/her bike, and its occupants. It also offers cover against own damage, natural calamities, accidents, man-made calamities, etc. The premium for a comprehensive policy depends on the make, model, and cubic capacity of the vehicle. You may opt for a 1-year or a 2-3 years of tenure cover for the policy. Some of the limitations of this cover are accidents due to driving under the influence of alcohol or drugs, regular wear and tear of the motorcycle, damage because of a nuclear war, etc.

6.   Add-on Cover

Insurance companies offer a variety of add-ons to make comprehensive coverage even more inclusive. These are individual covers. When added to the existing policy, may increase the premium amount. But these are worth every penny as the covers are for several risk factors. Some of the two-wheeler add-on covers to look for are related to roadside assistance, engine protection cover, zero depreciation cover, consumables cover, etc.

7.   Compulsory Deductible

The insurer fixes an amount that the policyholder has to bear on own when making a claim. This amount is a compulsory deductible. The 2 wheeler insurance company pays the remaining sum after deduction of this amount. A compulsory deductible is lower if the vehicle is in good condition, and vice-versa.

8.   Voluntary Deductible

The policyholder chooses an amount that he/she wishes to pay from own pocket when raising a claim. This amount is a voluntary deductible. This amount depends on the affordability of the insured. One of the advantages of choosing a higher limit of voluntary deductible is a lower premium amount. When the insured makes a cashless claim or claims a reimbursement, then he/she has to pay both voluntary and compulsory deductible amount.

9.   Insured Declared Value (IDV)

IDV is the market value of the vehicle. It also accounts for the depreciation value in percentage depending on the age of the two-wheeler. Insured declared value is the maximum sum which the insurance company assures to the policyholder in the event of total loss or theft of the vehicle. The IDV is highest if the motorcycle is new. The IDV reduces as the vehicle gets older.

10.                     No Claim Bonus (NCB)

If the insured does not raise claims against the bike insurance during the previous policy year, then the insurer offers a discount on the premium at the time of your bike insurance policy’s renewal. NCB is represented as a percentage of discounts on the total premium amount.

Final Words

The above-mentioned are some of the two-wheeler insurance terms that you must know. For a more inclusive list of terms, keep a lookout on this page, or get in touch with your insurance provider.

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Disclaimer :The information published on this website is for the public's reference only. Content of this information is to provide an overview of your Insurance needs and should not be relied upon for personal, medical, legal or financial decisions and you should consult an appropriate professional for specific advice for Travel/Health/Motor. Bharti AXA General Insurance Company Limited makes no representations about the suitability, reliability, timeliness, and accuracy of the information, travel, services, or any other items mentioned on this subject for any purpose whatsoever.

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