What is common between a helmet and a bike insurance policy? One protects you from injuries, the other protects your two-wheeler against losses and damages.
Read on to know more about this compulsory cover, two-wheeler insurance.
A two-wheeler or a bike insurance is a contract between you and your insurance company, by which you get compensation or payment 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. The two-wheeler insurance also covers liabilities arising due to injuries suffered by you or other individuals.
The whole idea of buying an insurance cover is to ensure that you have a financial cover during difficult times. For this, you must know what all does your insurance cover.
The exact details of the coverage depend on the type of the policy you select.
There are two broad types of bike insurance policies:
|Third-Party Bike Insurance||Comprehensive Bike Insurance|
|It covers the damages to another individual, their vehicle or property due to accidents caused by you.||It 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, and natural calamities.|
Here’s an example that will help you understand the covers better:
Raman is smart. You should be like Raman. But why? Let’s see:
Raman was passionate about vehicles. Slightly odd, but he had 4 bikes. He had a Comprehensive two-wheeler insurance for all four bikes.
Unfortunately, this is Raman’s sad story:
|Bike 1||Bike 2||Bike 3||Bike 4|
|Stolen in the third year. He never found the culprit or the lovely 1,000cc bike.||Friend rammed it into a tree and broke the bike’s handle.||Damaged due to water-logging during the monsoons.||The only bike that did not get damaged, but caused some—bumped into a car and dented it.|
Too many unfortunate incidents, but very much possible.
But, don’t feel sorry for Raman yet.
Here’s the second part of the story:
|Bike 1||Bike 2||Bike 3||Bike 4|
|The insurer paid the invoice amount. He bought a better bike.||The ‘own damage’ cover of the Comprehensive insurance paid for the repair.||The ‘engine protection’ cover of the insurance helped avoid repair costs worth Rs 35,000. The cover cost him Rs 3,000.||The ‘third-party’ cover of the comprehensive insurance paid for the damages caused to the car.|
You can widen the scope of your insurance’s coverage by opting for additional covers.
These additional covers are known as add-ons.
You pay extra for buying these covers.
Here are a few useful add-ons that you must know of:
Your insurance policy may not cover certain liabilities.
Make sure that you read these exclusions carefully while buying a policy. Here are the common two-wheeler insurance exclusions:
The premium amount that you pay while buying the policy becomes the cost of your insurance policy. This cost varies. It depends on several factors.
Here are a few of them:
|The value of the bike||- 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.|
|The extent of the coverage||- A third-party policy only covers the third-party liability arising due to accidents.|
- On the other hand, a comprehensive policy covers own-damages too, apart from third-party liabilities.
- It also provides protection against fire, theft, sabotage, natural calamities, etc.
|- The wider the coverage, the higher the premium.|
|The age of the bike||- 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).|
|The add-ons||- To ensure a better financial protection you might buy extra coverage.|
- You need to pay extra for such add-ons.
|- The more the add-ons, the higher the premium.|
|The security features||- 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 anti-theft discounts.|
|The claim history||- If in a year, you do not make any claims, you get a no-claim bonus.|
- This bonus can be in the form of discounts to your premium.
|- The cleaner the claim history, the lower the premium.|
Follow these 4 easy steps to buy an insurance for your vehicle:
Step 1 – Assess
Step 2 – Compare
Step 3 – Pick
Step 4 – Pay
You need not buy a fresh bike insurance policy every year. You can just renew your old policy in a few simple steps.
This can either be done online, through mobile phone applications, or via the traditional ways of renewing through your agent or visiting the branch.
Understanding the bike insurance policy becomes easier if you understand the language used. Let us simplify a few for you.
Yes, you can. Do not worry if you cannot find your policy. Simply inform your insurance company. If it was purchased offline, your insurer might charge a nominal fee for issuing a duplicate copy.
However, with the advent of technology and many insurers sending you a digital copy of your policy to your registered email id, things aren’t that difficult. Simply take a coloured printout of the digital copy and you are good to go. Inform your insurer nonetheless.
Insurance can be classified into two broad types – Life insurance and Non-life insurance. Non-life insurance is also known as General insurance. Motor Insurance or Auto Insurance is a type of general insurance. It is further divided into car insurance, bike/two-wheeler insurance, and commercial vehicle insurance.
By all means, you must renew your policy before it expires. As per the Indian Motor laws, it is illegal to ride a bike without an insurance. It is in your own best interest that you renew your policy. By doing so, you protect yourself from major financial losses due to accidents. Besides, you can lose your no-claim bonus if you fail to renew within the grace period of 90 days after policy expiry.