Buying a bike in India is one of the most common things. While it is common to buy a bike, it is extremely valuable to anyone who owns it. It has become a phase of life these days. This means that sooner or later everyone will get a bike. Therefore, the automobile industry in the country has grown tremendously, with models in various types and price ranges being displayed in showrooms. As competition in the market increases, it’s getting harder and harder to find a vehicle that fits your needs.
The convenience of going to work with your own vehicle instead of a crowded public transport bus is unmatched. You can also immediately make plans for weekends away from the city. The easy availability of auto financing options like loans made it easy to buy your dream bike without having to worry about financial issues. Banks and non-bank financial institutions have developed innovative bike finance products with affordable monthly installments (EMIs) that make buying a bike easier than ever before.
When you buy a vehicle, you should also remember the appropriate two-wheeler insurance. Bike insurance is mandatory for all bike owners and riding without insurance is a punishable offense. When purchasing a bike insurance online, keep a few things in mind so that you can get the best coverage at a reasonable cost. This means that you need to know all the nuances of two-wheeler insurance and the myths that surround them. The best example of this is depreciation value and other concepts associated with it.
What is depreciation?
Depreciation can best be described as the loss of monetary value of a bike. This decrease in value is a result of the increasing age of the vehicle. The older the bike, the greater the depreciation. For example, two bikes of the same model have different monetary values because they were made in different years. In addition, the driving history and the general condition of the bike are also a determining factor in the monetary value of the bike.
What is the depreciation value of the bike?
The first thing you need to understand is that your bike is an asset. Each asset has a different market value. This value changes over time after purchasing the property. It appreciates/increases or depreciates/decreases. In the case of a vehicle, under normal circumstances its market value will decrease over time. This includes the monetary value of a vehicle from its purchase price, the vehicle’s age, driving record, etc. It means deducting the current market value on the basis of. The current market value you will have after depreciation has been deducted from the original market. is called the depreciation value of the vehicle. One of the best things you can do against this is get the right coverage when you buy two-wheeler insurance.
What is IDV?
The terms and words you’ll find when you buy a bike policy online are very confusing, and a phrase that often appears in documents is Insured Declared Value (IDV).
This is the abbreviation for Insured Declared Value (IDV). It is the maximum amount you can get under your insurance policy in case your vehicle is lost completely. This includes major damage from an accident or bike theft. The insurance company will determine your bike’s insurance premium based on IDV. Therefore, it is important that you choose the right amount as your IDV.
Now the IDV you get paid when the total loss occurs is the current market value of the vehicle. Therefore, your IDV will be the market value of your vehicle at the time of policy purchase. If your IDV is low now, your bike has a low market value. This means less coverage for your vehicle to receive when you make claim through the two-wheeler insurance app. You can decide on a higher IDV for your vehicle during renewal via an insurance application. But that will cost you a higher premium. So, your IDV has an impact on the premium you pay for your policy. Therefore, when purchasing a policy, you should focus on the IDV your insurance company will provide you with.