How Does a Two Wheeler Insurance Plan Aid in Times of a Total Loss to Your Vehicle?
When policyholders buy bike insurance online or offline, they may find it difficult to understand the concept of total loss/constructive total loss. Once they understand the terminologies and components of bike insurance, the total loss concept is simple and beneficial to a policyholder.
Meaning of total loss/constructive total loss
Your insurance company may repair, replace, or reinstate a part of your bike, your entire bike, or certain accessories when needed. Otherwise, you may be reimbursed for the loss or damage caused to your bike. In such cases, the liability of your insurance company shall not exceed-
- The insured’s declared value (IDV) of the bike in the event of a total/constructive total loss.
- In case of a partial loss, the liability of the insurance company will not exceed the actual cost of repair and/or replacement of any bike parts lost or damaged. This amount is calculated after taking depreciation and deductibles into consideration.
* Standard T&C Apply
Declaration of total loss
You can declare your bike a total loss or constructive total loss when your bike is highly damaged. Such severe damage may have occurred because of events like accidents, fires, or any other calamity. This is when your bike is declared a total loss.
- Your insured vehicle will be treated as a total loss or “constructive total loss” if the aggregate cost of repair and/or retrieval of the vehicle is over 75% of the IDV of your vehicle. This decision is subject to the terms and conditions of your policy.
- If your bike has suffered damage, it is beyond any economical repair.
- Usually, when you declare a total loss, the insurance company considers the scrap value of your vehicle after deducting the mandatory deductibles. These mandatory deductibles are usually mentioned in the terms and conditions of your bike insurance.
* Standard T&C Apply
Process of a total loss/constructive total loss claim
As a policyholder, you need to follow the claim process thoroughly in the event of a total loss. When the damage to your bike has occurred, contact your insurance company immediately. A total loss is a settlement that takes some time, and you may have to bear the expenses of your daily travel as your bike is damaged.
Once you have filed a total loss or constructive total loss claim for your bike, the insurance company will begin its assessment. Upon checking, if the company finds that the damages are repairable but will cost an amount that is more than the IDV of your bike, your insurance claim will fall under the category of ‘beyond economic repairs’.
If the total cost of repair and/or retrieval of your vehicle is over 75% of the IDV of your bike, your claim will be treated as a total loss/total constructive loss. The categorization of your claim depends upon the terms and conditions of your two-wheeler insurance. * Standard T&C Apply
Remember that after a total loss claim on your two-wheeler, it is mandatory for you to cancel the Registration Certificate (RC) of your bike as per Section 55 of the Motor Vehicles Act of 1988. A total loss claim means that every penny of your bike insurance price is worth it, as it provides you with financial security for any issues related to your bike. Insurance is the subject of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.