Constructive Total Loss in Bike Insurance - What Is It?

Posted on: Dec 28, 2021 | | Written by:

Constructive Total Loss in Bike Insurance - What Is It?

Published on December 28, 2021. EST READ TIME: 3 minutes

Sometimes, accidents can leave you in a situation where, despite having 2 wheeler insurance, you might wonder if the insurer will pay for the damage. One such situation is irreparable damage to your bike. It's a situation where the cost of repairs surpasses the current market value of your bike or when repairing it is nearly impossible. To deal with such cases, insurers have incorporated a term called constructive total loss in their policies. If you are unaware of this term, read this blog to the end.

What is a total loss/constructive total loss bike insurance claim?

The term total loss or a constructive loss in a 2 wheeler insurance comes into play when your bike is severely damaged in an accident. A constructive total loss occurs when the damage to the bike is such that the cost of repair equals or surpasses the bike's original cost or the sum insured. To understand this term in a better way, look at the below pointers.

• Total constructive loss is when your bike is irreparably damaged.

• Total constructive loss is when the cost of repairs surpasses 75% of the bike's insured declared value IDV.

• When you file a 2 wheeler insurance claim for total loss, the insurer pays the IDV after deducting the compulsory deductibles.

What to do in case of a total loss/constructive total loss claim?

In case your bike is damaged severely, go through your 2 wheeler insurance provider’s claim settlement process carefully. Inform your insurer right away after your bike suffers damage. Following your intimation, the insurer will send a surveying officer to the site to assess the extent of the damage.

Following the assessment, if the surveying officer finds that your bike can be repaired, but the repair costs surpass the IDV, the insurer will categorise your damage under ‘beyond economical repairs’. Keep in mind, the insurer records total constructive loss only if the repair value, or say, insurer’s liability surpasses 75% of IDV. The insurer, after deducting the mandatory deductible, pays the insured declared value that is inclusive of your bike's wreck value.

How to file a total loss/constructive total loss claim?

When your bike is damaged irreparably, and you want to make a total constructive claim, here are the steps to take with your 2 wheeler insurance company.

Step 1 - Visit the official website of the company.

Step 2 - Go to the claim section, enter your policy details, and answer a few questions.

Step 3- Upload a soft copy of all relevant documents.

Step 4- Click on the 'Submit' button to raise your claim request.

How is bike insurance total loss/constructive total loss calculated?

In case of total constructive loss, a 2 wheeler insurance company usually refers to the following table to calculate insured declared value (IDV).

Age of the bike	IDV percentage (respect to the ex-showroom price)
If your bike is less than six months old.	95%
If your bike age is between 6 months and 1 year.	85%
If your bike age is between 1 year and 2 years.	80%
If your bike age is between 2 years and 3 years.	70%
If your bike age is between 3 years and 4 years.	60%%
If your bike age is between 4 years and 5 years.	50%
If your bike is older than 5 years.	IDV is decided after the mutual consent of the insurer and policyholder.

To understand this table in a better way, let's take an example.

Assume Mr Venkatesh, a Bangalore-based IT engineer, has a bike that got irreparably damaged in an earthquake. The bike he owns has an ex-showroom price of INR 80,000, and he bought it 8 months ago. In this case, the insured declared value (IDV) will be INR 68,000, as per the table outlined above. Here, Mr Venkatesh is eligible to receive the claim amount of INR 68,000 (exclusive of mandatory deductibles) from the 2 wheeler insurance company.

So, to wrap up, knowing every aspect of constructive total loss might save you a lot of money in the long run. Check with the insurer about the terms and restrictions associated with severe or irreparable bike damage when getting 2 wheeler insurance.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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