Two Wheeler Insurance

Buying an insurance policy for a two-wheeler has been made compulsory by the Indian law. To avoid financial crises in the events of mishaps, you should get your two-wheeler insured.

You can compare this to the safety of your helmet. It safeguards you against physical injuries and an insurance policy safeguards you against a financial crunch, due to the damage caused to your bike.

Let us understand what exactly a two-wheeler/ bike insurance is:

What is Two-Wheeler / Bike Insurance?

A two-wheeler or 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 third party liabilities arising due to injuries/damages as a result of an accident with your bike.

How much does Two-Wheeler Insurance cost?

The amount of premium that you pay while buying the policy, becomes the cost of your insurance policy. This cost varies depending on the following factors:

  • Value of the bike
  • Extent of coverage
  • Age of bike
  • Add-ons
  • Security features
  • Claim History

Here is a look at these factors in detail:

FactorReasonLogic
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 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 in the form of add-ons.
- You need to pay extra for such add-ons.
- The more the add-ons, the higher the premium.
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 discounts.
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 on your premium.
- The cleaner the claim history, the lower the premium.

Based on the above factors, the cost of your two wheeler insurance policy is determined by your insurer. Using the above factors, you also can deduce the cost of your bike insurance policy by using a bike insurance premium calculator.

Questions to ask yourself, before buying the best Bike Insurance Policy:

To get a clear understanding of your needs, you can ask the following questions to yourself. You will thereby identify the right bike insurance policy. Consider this as the checklist to follow before buying bike insurance:

  1. What is the manufacturing year of my bike? (To determine the age of the bike)
  2. Which type of bike insurance policy do I need? (To determine the scope of coverage)
  3. What’s my priority: Lower premium today or lower bills in the future? (To determine the amount of Insured Declared Value of the bike)

How to Renew Two-Wheeler Insurance Policy?

You need not buy a fresh bike insurance policy every year. You can just renew your old policy in a few simple steps.

  1. Online Renewal
  2. Mobile Phone Application
  3. Branch Renewal

This can either be done online, through mobile phone applications, or via the traditional ways of renewing through your agent or visiting the branch.

In either cases, follow these steps:

Online Renewal:

  • Go to your insurance company’s website.
  • Fill in the renewal form available there.
  • You might need your old policy details.
  • Ensure that you enter the correct details.
  • Keep your debit card or net banking details ready.
  • Once the form is complete, you get to check all the details that you entered.
  • Check the details, click on confirm, and proceed towards making the payment.
  • You will then get your renewed policy in a PDF file.
  • Save this and take a printout of the same.

Mobile phone application:

  • 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 website renewal.
  • You must enter all the information correctly.
  • Check twice before making the payment.

Branch renewal:

  • 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 with the agent.
  • You get your new policy, by post, if you pay by debit card, demand draft or cheque.

What are the Inclusions and Exclusions of a Two-Wheeler Insurance Cover?

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, etc.

There are two broad types of bike insurance policies:

Third-Party Bike InsuranceComprehensive Bike Insurance
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.

The whole idea of buying an insurance cover is to ensure that you have a financial cover for your bike after you face any loss or physical damage to your two-wheeler.

TABLE

Apart from these, one cannot file a claim under the following situations:

  • Damage when driving under the influence of alcohol or intoxicating drugs
  • Damage during war and similar conditions
  • Damage when policy is not active
  • Regular servicing and expenses due to wear and tear
  • Damage when driving without a valid license
  • Driving a bike that you do not own
  • Damages caused outside the geographical boundaries of the country
  • Mechanical or electrical breakdown
  • Tire or tube punctures (You get 50% of the cost of repair/replacement if your two-wheeler is damaged at the same time)
  • Damages caused while using the bike for illegal activities

Let us discuss this with an example:
Here’s an example that will help you understand the covers better:

Raman was passionate about vehicles.  He had 4 bikes. He had a Comprehensive two-wheeler insurance for all four bikes. Unfortunately, this is Raman’s sad story:

Bike 1Bike 2Bike 3Bike 4
Stolen in the second year. He never found the culprit or his bike.Friend rammed the bike into a tree and broke its handle.Damaged due to water-logging during the monsoon.Raman lost control of this bike and rammed it into a car, shattering the tail lights of that car. Raman’s bike escaped damage with some minor scratches.

Since Raman had made a smart move by getting all his bikes insured, thus he had to spend minimal amount of money for getting the bikes repaired. The larger chunk was paid by his insurance company.

Let’s see how insurance saved Raman from spending money from his pocket when his bikes got damaged.

Here’s the second part of the story:

Bike 1Bike 2Bike 3Bike 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.

Are There Any Extra Covers for Two-Wheeler Insurance?

You can widen the scope of your insurance’s coverage by opting for additional covers. These additional covers are known as add-ons. You need to pay extra for buying these covers. Here are a few useful add-ons that you must know of:

  • Zero Depreciation
  • Passenger Cover
  • Return to Invoice

Let us understand these in details:

Zero Depreciation

  • 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

  • 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.

Return to Invoice

  • 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.

How to Buy Two-Wheeler Insurance?

Buying a two wheeler insurance policy is fairly simple. Thanks to the internet, these days if you buy a policy online, you can download the policy document within a few minutes.

Follow these 4 easy steps to buy an insurance for your vehicle:

  1. Access
  2. Compare
  3. Pick
  4. Pay

Step 1 – Assess

  • 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.

Step 2 – Compare

  • 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 does not cover certain liabilities. Be mindful of these exclusions.

Step 3 – Pick

  • Based on your assessment and detailed examination, select the plan that best suits your needs.

Step 4 – Pay

  • 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

Which are the terms related to Insurance?

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 a bike insurance policy:

  1. Third-Party Liability
  2. Material Fact
  3. Deductibles / Excess
  4. Own-damage

Let us simplify these for you:

Third-party liability

  • 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.

Material fact

  • 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.

Deductibles / Excess

  • 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.

Own-damage

  • 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.

Frequently Asked Questions:

Q) Can I get a duplicate insurance policy if I misplaced my original policy document?

Yes, you can. Do not worry if you cannot find your old policy document. 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, many insurers send you a digital copy of your policy to your registered email id. Simply take a coloured printout of the digital copy and you are good to go. Inform your insurer nonetheless.

Q) What things should I keep in mind while buying the bike policy?

You need to know the following things while purchasing a bike insurance policy:

  • Check if the insurer or the agent is registered with Insurance Regulatory and Development Authority of India (IRDA).
  • Read the policy brochure carefully to understand the various offers, coverages and exclusions.
  • Fill in every detail correctly. Your claim can be rejected if you provide incorrect, incomplete or false details at this stage.
  • Ensure that you fill the form by yourself.
  • Keep all the relevant documents ready and up-to-date.

Q) What if I want to make certain changes in my two wheeler policy?

Here is what you need to follow if you want to make changes to your bike insurance policy:

  • You can do this with an endorsement. An endorsement is a written evidence of the fact that changes have been made in your insurance policy.
  • Say, you want to change your address in the policy, you must submit a letter to your insurer along with the proof of address change.
  • You will then get an endorsement letter from your insurance company, thus confirming the changes that you made.

Q) Is bike insurance a part of motor insurance? And, how is motor insurance different from general insurance?

Insurance can be classified into two broad types – Life insurance and 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.

Q) When my policy lapses, why should I not let it expire and renew it immediately?

By all means, you must renew your policy before it expires. As per The Motor Vehicles Act, 1988, it is illegal to ride a bike without a valid insurance policy. 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.