Two Wheeler Insurance

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.

What is Two-Wheeler/Bike 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.

What does Two-Wheeler Insurance cover?

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 InsuranceComprehensive 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 1Bike 2Bike 3Bike 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 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 pay extra for buying these covers.

Here are a few useful add-ons that you must know of:

Zero depreciation

  • The value of your bike and its parts reduces over time due to wear and tear.
  • The insurance company pays a reduced amount because of this ‘depreciation’.
  • Usually, you pay the remaining amount from your pocket.
  • Zero depreciation add-on pays or compensates you for the entire repair bill regardless of the depreciation.
  • It also covers repair/replacement costs of rubber, nylon, plastic and fibre components of your two-wheeler.

Passenger cover

  • Road accidents not only affect the rider, but also the pillion rider—the person sitting behind.
  • A two-wheeler insurance usually only covers injuries to the rider.
  • The passenger add-on cover compensates for any total or partial disability caused to the pillion due to the accident.

Return to Invoice

  • In the 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.

What does a Two-Wheeler Insurance not cover?

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:

  • Damages caused outside the geographical boundaries of the country
  • Normal wear and tear and general ageing
  • Damages caused if you do not have a valid license
  • Mechanical or electrical breakdown
  • Damages caused while riding under the influence of alcohol or drugs
  • 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

How much does Two-Wheeler Insurance cost?

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:

WhatWhyHow
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.

How to Buy Two-Wheeler Insurance?

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

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. help you get an idea about the cover that you need.

Step 2 – Compare

  • Look at all the options available.
  • 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.
  • Next, approach the company offering the plan.

Step 4 – Pay

  • Fill in the application form and pay the premium.
  • This can easily be done online within minutes.
  • The insurance examines your bike and approves your application.
  • You must then read the policy documents carefully.

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.

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

Online Renewal:

  • Go to your insurance company’s website.
  • Fill in the renewal form available there.
  • Ensure that you enter the correct details.
  • You might need your old policy 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 print out 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 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 if you pay by debit card, demand draft or cheque.

Bike insurance Jargon You Should Know

Understanding the bike insurance policy becomes easier if you understand the language used. Let us simplify a few 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 voulntary 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 and man-made calamities.

Things People Often Ask

Q) Can I get a duplicate insurance policy if I misplace my policy?

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.

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

  • 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.

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 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.

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 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.