Constructive Total Loss in Bike Insurance

Know about constructive total loss in bike insurance, its calculation, and claim process.
Get Quote
Constructive Total Loss in Bike Insurance
Get Quote
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.

Related videos

Disclaimer

*T&C Apply - Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Life Insurance Corporation of India (LIC), Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Company Limited, HDFC ERGO General Insurance Company, TATA AIG General Insurance Company Limited, ICICI Lombard General Insurance Company Limited, New India Assurance Limited, Chola MS General Insurance Company Limited, Zurich Kotak General Insurance Company Limited, Star Health & Allied Insurance Company Limited, Care Health Insurance Company Limited, Niva Bupa Health Insurance Company Limited, Aditya Birla Health Insurance Company Limited and Manipal Cigna Health Insurance Company Limited under the IRDAI composite registration number CA0101. Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure & policy wordings carefully before concluding a sale. Tax benefits applicable if any, will be as per the prevailing tax laws. Tax laws are subject to change. BFL does NOT provide Tax/Investment advisory services. Please consult your advisors before proceeding to purchase an insurance product. Visitors are hereby informed that their information submitted on the website may also be shared with insurers. BFL is also distributor of other third-party products from Assistance service providers such as CPP Assistance Services Private Limited, Bajaj Finserv Health Limited. etc. All product information such as premium, benefits, exclusions, value added services etc. are authentic and solely based on the information received from the respective Insurance company or the respective Assistance provider company.

Note - While we have made all the efforts and taken utmost care in gathering precise information about the products, features, benefits etc. However, BFL cannot be held liable for any direct or indirect damage/loss. We request our customers to conduct their research about these products and refer to the respective products sales brochure and policy/membership wordings before concluding sales.