Two-wheeler insurance is similar to wearing a helmet while riding your two-wheeler, a helmet is a physical security whereas an insurance policy is a financial security. Technically, a two-wheeler or bike insurance is a contract between you and an insurance company, through which you get compensation or paid in case of any loss or physical damage to your two-wheeler. Such a loss or damage can be due to collisions, thefts, natural calamities, sabotage or even fire. Two-wheeler insurance also covers third-party liabilities arising due to injuries/damages as a result of a bike accident. The Motor Vehicles Act, 1988, makes it mandatory to avail at-least Third-party Liability Insurance for every rider. Riding a two-wheeler in India without a valid Third-party Liability Insurance is a punishable offense.
The amount of premium that you pay while buying the policy becomes the cost of your insurance policy. The final payment depends on the following factors:
The market value of your bike affects the premium. This is also known as the insured declared value (IDV). IDV is the maximum amount that you can get during a claim. The sum assured does not exceed the IDV of your bike.
The higher the value, the higher the premium.
A Third-party Policy only covers the third-party liability arising due to accidents. On the other hand, a Comprehensive Insurance Policy covers own-damages apart from third-party liabilities. It also provides protection against fire, theft, sabotage, natural calamities, etc.
The wider the coverage, the higher the premium.
An old two-wheeler is likely to have a lower IDV. A lower IDV means a lower premium. However, an old bike is more susceptible to damages. This higher risk can push premiums.
The older the bike, the lower the premium (if it is in a good condition).
To ensure a better financial protection you might buy extra coverage in the form of Add-ons. You need to pay extra for such Add-ons.
The more the Add-ons, the higher the premium.
Your bike is more susceptible to losses in the absence of Anti-theft Devices and other security features. By installing these, you reduce the chances of loss.
The better the security, the higher the chances of your insurer offering you discounts.
If in a year, you do not make any claims, you get a no-claim bonus (NCB). This NCB can be in the form of discounts on your premium.
The cleaner the claim history, the lower the premium.
You need not buy a fresh bike insurance policy every year.
This can either be done online, through mobile phone applications, or via the traditional ways of renewing through your agent or visiting the branch.
Some of the insurance companies have their own mobile apps, while some have mobile websites working like an app. Basically, you can renew and pay for insurance from your phone too.
The process is similar to that of online renewal. You must enter all the information correctly. Check twice before making the payment.
This is the traditional way of renewing your policy. The process is more or less the same, except that, you will have to carve out time in your schedule for going to the branch or meeting the agent. You get your new policy, by post, if you pay by debit card, demand draft or cheque.
Depending on the type of two-wheeler policy you buy, you will be financially covered against third-party liabilities, theft, own damage, natural disasters, man-made disasters, etc. Lesser the cover, cheaper the policy and vice-versa.
Third-party Bike Insurance covers the damages to another individual, their vehicle or property due to accidents caused by your bike.
Comprehensive Bike Insurance offers Third-party Liability coverage as well as ‘Own Damage’ and ‘Personal Accident’ covers. This means it covers you, your two-wheeler and third-parties from all possible damage due to fire, theft, accident, sabotage, natural calamities, etc.
You can widen the scope of your insurance’s coverage by opting for additional covers. These additional covers are known as Add-ons. These Add-ons do not come cheap, you need to pay extra for buying these covers but they are extremely beneficial. Here are a few useful add-ons that you must know of:
The value of your bike and its parts reduces over time due to wear and tear. The insurance company takes depreciation into consideration, which results in a lower claim amount. You need to bear the difference in cost of repairs and claim amount.
Zero depreciation add-on pays or compensates you without calculating the depreciation of your bike. It also covers repair/replacement costs of rubber, nylon, plastic and fibre components of your two-wheeler.
Passenger cover also known as Pillion Rider Add-on protects the person seated behind you on your bike against financial losses.
If the pillion rider is injured, the treatment cost is taken care of.
This is different than the Personal Accident Cover for the rider. This Add-on is purely for the pillion rider.
NCB Protect ensures that your No Claim Bonus (NCB) is still valid even after you raise claims during a policy year.
A maximum of two claims a year are considered under NCB Protect.
In case of total loss or theft, this Add-on pays the original invoice value of your bike to you.
It also includes the registration charges of your two-wheeler and the road tax paid.
Understanding the bike insurance policy becomes easier if you understand the language used. Here are some of the words you need to be aware of while purchasing an online bike insurance policy in India:
In insurance, you are the first party. Your insurer is the second party. Everybody else becomes the third party. Third-party liability is the financial responsibility you assume if your bike causes loss or damage to a third party or their property.
The insurance company arrives at the premium amount, or accepts or declines your application based on the information that you provide. A material fact is such an information that would affect the insurer’s decisions. Your claim can be rejected if you do not disclose all the material facts about your bike.
It is a pre-determined amount that you pay from your pocket when you make a claim. There are two types of deductibles – Compulsory and Voluntary. A compulsory amount is deducted by your insurer at the time of claim. On the other hand, a voluntary excess is a cost you bear willingly over and above the compulsory excess. Only after paying this voluntary excess, you can get the rest of the claim amount from the insurance company.
This is a term used in the case of Comprehensive Insurance Policies.It covers you and your bike against any loss or damage due to accidents, and natural or man-made calamities.
First, check your personal needs, priorities, and requirements.Also, understand the requirements of your bike.Asking questions like how old is the bike? What is its current value? etc. will help you get an idea about the cover that you need.
Look at all the policy options available online. Compare the benefits they offer.Look out for extra services and Add-ons available for your bike. Even a Comprehensive Bike Insurance Policy does not cover certain liabilities. Be mindful of these exclusions before you apply. Do not simply go for the lowest option with regards to pricing, look at it holistically.
Based on your assessment and detailed examination, select the plan that best suits your needs and then apply.
Fill in the application form and pay the premium. This can easily be done online within minutes. The insurance company examines your bike and may approve your application.You must then read the policy documents carefully.