Constructive Total Loss in Bike Insurance

Know about constructive total loss in bike insurance, its calculation, and claim process.
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Constructive Total Loss in Bike Insurance
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3 mins
29-November-2023

When it comes to bike insurance, one term that often arises in the unfortunate event of a severe accident or irreparable damage is ‘constructive total loss.’ It is essential for policyholders to comprehend this concept thoroughly to navigate the claims process successfully.

In this article, we will delve into what constructive total loss means in the realm of bike insurance, how to file a claim, the calculation of Insured Declared Value (IDV), and crucial aspects to keep in mind.

What is total loss/constructive total loss in bike insurance?

Total loss or constructive total loss in bike insurance is a situation where the motorbike gets damaged or lost beyond repair in a severe accident or any other critical incident. As per insurance norms, if the cost of repairs to your bike exceeds a certain percent of its insured declared value (IDV), then the bike is considered to be at a total loss.

Alternatively, if repairing the bike would lead to a situation where the result of the repair would be unroadworthy or unsafe, leading to its total loss, the insurance company may settle the claim under the category of constructive total loss.

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

Filing the claim for total loss or constructive total loss in your bike insurance policy needs to be done with utmost sincerity and diligence. Following the guidelines for filing the claim will help you get the deserved compensation as soon as possible.

Here are the steps involved in filing a claim for total loss or constructive total loss in bike insurance:

  • Inform the insurance company: The first step is to inform your insurance company as soon as your bike gets severely damaged or lost. You may do this either through your insurance agent, the customer care helpline of the insurance company, or by directly visiting the branch office.
  • Lodge an FIR and acquire a copy: The next step is to lodge a First Information Report (FIR) on the loss or accident at the nearest police station. Acquire a copy of the same as the insurance company would ask for it while filing a claim.
  • Submit documents: After registering the complaint, you will need to submit some documents to the insurance company, including the claim form, the copy of the FIR, and the policy document.
  • Wait for inspection: After submission of the documents, the insurance company will arrange for an inspection of your damaged or lost bike. The inspector would prepare a report, which would help the insurance company determine the compensation amount under the applicable category.
  • Receive compensation: After approving your claim, the insurance company will offer compensation that can involve repairing the bike or reimbursing its insured declared value (IDV) for the lost bike.

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

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

Age of the vehicle

IDV in the percentage of ex-showroom price

Under 6 months

95%

6 months to 1 year

85%

1 to 2 years

80%

2 to 3 years

70%

3 to 4 years

60%

4 to 5 years

50%

Beyond 5 years

Mutual decision between the bike owner and the insurer


Things to know about constructive total loss bike insurance claim

The following factors need to be kept in mind while filing a constructive total loss claim:

  • The compensation amount is calculated as per the present market value of your bike before its damage.
  • The bike's insurance policy should be in effect as of the date of the incident.
  • Filing a claim for constructive total loss requires a high level of transparency and honesty.
  • The cost of the repairs must exceed a certain percentage of the insured declared value, which is usually around 75%.
  • The insured declared value is the maximum amount that the insurance company pays in case of total or constructive total loss.

    In conclusion, constructive total loss in bike insurance is a significant aspect that policyholders should be well-versed in to navigate the claims process smoothly. Understanding the intricacies of IDV calculation, following the correct procedure for filing a claim, and being aware of crucial factors can contribute to a hassle-free experience during a challenging time.

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