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Decoding Invoice Protection Add-on Cover For Your Bike

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Published on December 10, 2020. EST READ TIME: 3 MIN

The law mandates that as a two-wheeler owner, you must have a valid third-party insurance policy and non-compliance with this rule often leads to heavy penalties. The experts, however, suggest bikers go for a COMPREHENSIVE BIKE INSURANCE POLICY that covers both the damage to your vehicle and that of a third party. It safeguards from the financial loss that happens due to damages done to your vehicle from fire, explosion, or lightning as well as against cases of vandalism or terrorism. But what happens when there is a total loss of the bike like when it is stolen or gets damaged beyond repair? Here’s the catch! You may not get the full value of the bike unless you have Invoice Protection add-on in your new bike insurance policy

Let’s learn more about this significant add-on cover. 

1. What is Invoice Protection Cover?

It is an add-on cover to your NEW BIKE INSURANCE POLICY that comes in handy when there is a total loss of the vehicle. You can claim an ex-showroom price with this cover.

So, supposedly, the price of your bike was Rs. 75,000 when you bought it and in its second year, the insurer and you agree to lock the Insured Declared Value (IDV) of the bike at Rs. 50,000. IDV value considers the depreciation value of the bike since it was bought. The higher the IDV, the more insurance premium you pay, and therefore, bike owners don't opt for steep IDV. Now, unfortunately, your bike gets stolen or gets swept away by floodwaters and there is little hope of its recovery. In such a scenario, you will get the IDV value from the insurance company if you have a comprehensive plan, but you will get the showroom price if you have the Invoice Protection cover. In fact, additionally, you will get reimbursement for registration charges, road tax, and other charges that you paid while buying the two-wheeler.

Also, don’t confuse it with Zero Depreciation cover as the former is primarily used when the bike is lost forever, whereas the latter plays its role in cases of partial repairs. Invoice Protection or as sometimes referred to as Return to Invoice doesn’t compensate for small repair works.

Benefits of Invoice Protection Cover

Invoice Protection Cover is important because of the high rate of depreciation. The moment a bike rolls out of a showroom, it loses its 5-10%. By the fourth or fifth year, the bike loses nearly 50% and IDV becomes half the price you bought your bike for. IDV will not include registration charges, on-road tax, etc. as well.
-  If you are wondering if you should get the add-on cover, then it depends on how you treat your bike. If you are someone who takes great care of the bike, gets it regularly checked and clean, and have anti-theft devices installed, or have spent a fortune in customizing it, then you should definitely. Because a four or five-year-old bike in great condition will attract many buyers, who would be willing to pay almost up to 70-80 percent of the bike, which would be a sizable increase from the IDV.
-  Another crucial reason is that unfortunate incidents happen and happen often. The theft of bikes is quite common. Bikes also become an easy target of vandalism during riots. Then there are several natural disasters that can completely destroy your favourite ride.

Conclusion

Despite our best efforts to keep our bike protected, mishaps happen. If you have an Invoice Protection cover as an add-on to your new bike insurance policy, you will be able to easily buy the same model without paying anything from your pocket. However, please note that some insurers reserve this cover only for bikes that are less than five years old. So, it’s better to check the terms and conditions with the insurance provider before buying the insurance from them.

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

This blog has been written by

Mukesh Kumar | Motor Insurance Expert | 36+ years of experience in insurance industry

A veteran in the insurance industry, Mukesh Kumar has the expertise of handling various functions like Business Development, Underwriting, Claims, Human Resources, Quality Management and Marketing. With rich knowledge of the industry, he loves to share his views on topics of insurance sector and takes special interest in educating people on advantages of having insurance.

Mr. Mukesh Kumar recommends "getting your two wheeler insured from HDFC ERGO, a brand serving more than 1 crore+ customers. With overnight repair services and more than 6,800+ network garages, you can be assured of help in event of any damage to your vehicle."

Few other articles:

• How to buy a two wheeler insurance online?

• What Is Covered Under Third Party Bike Insurance?

• Advantages of third party two wheeler insurance

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