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Second Hand Bike/Two-Wheeler Insurance: Everything Explored

Team AckoMay 16, 2022

Deciding which bike or two-wheeler to purchase is probably one of the hardest decisions. You ensure that the bike is in good condition, the documents are in place and you get a good price for the bike. A used bike or scooter provides an edge over new vehicles as they are low on budget. Like buying a bike, you have several options while selecting insurance coverage for the bike. You may think it is a difficult task; however, you will be surprised how easy it is to learn about insurance for second-hand bikes. Read on to know about second-hand bike insurance, its benefits, and important aspects of used bike insurance and how it can protect your used two-wheeler.

Second Hand Bike/Two Wheeler Insurance

What is Second-Hand Bike Insurance?

In recent times, two-wheelers have become an integral part of the transport for most commuters. It offers a quick solution to move from one place to another, a higher mileage, lower maintenance cost, etc. Bikes have a slight edge over four-wheelers during such situations mentioned above. Also, second-hand two-wheelers provide an alternative when your budget is low. An important part of buying a used bike or a scooter is the second-hand bike insurance. Many fail to insure their bike or transfer bike insurance.

Used bike insurance is similar to regular motor insurance for new two-wheelers. Two-wheeler insurance can either be Third-party or Comprehensive insurance policy. It protects the insured bike from damage and losses caused to third parties and the insured vehicle.

Why is it Necessary to Insure Your Second-Hand or Used Bike?

Bike insurance for your used bike or two-wheeler is not only a mandatory document, but it offers several benefits. Here is why a 2nd hand bike insurance is important:

Third-Party Risks

Third-party Liability insurance will protect you from legal liabilities arising out of damages or losses to the third party. The second-hand two-wheeler insurance will cover the cost you have to bear for third-party damages or losses. Hence, used two-wheeler insurance covers you against any risks towards third-party or to their property.

Theft of the Insured Bike

Imagine if your bike is stolen. You may have spent your savings or taken a loan to buy the used bike or scooter. A theft could leave you in despair and may affect your finances. The insurer will pay the current market value of the vehicle if it is stolen. Hence, protecting your liabilities in case of theft of your used bike with the two-wheeler insurance policy is an important aspect of owning a bike.

Natural Calamities

Natural calamities such as floods can wreak havoc on your bike. The bike can be beyond repair and cause total loss or damage. Bike insurance will pay the Insured Declared Value of bike or the current market value of the bike thereby recovering some losses.

Man-Made Calamities

Rioting, vandalism, bandh, etc. may cause damage to your vehicle and the cost of repairing may be expensive. However, with the comprehensive bike insurance policy, you can claim for the damages to the insured bike.

As per the Motor Vehicles Act, 1988, one must carry the bike insurance while driving on Indian public roads. It is a mandatory document along with the driving licence, registration certificate and emission certificate that the rider should carry at times.

Covers Own Damage

Through the comprehensive bike insurance, you can claim for Own Damage. In other words, in case of damages to the insured due to an accident, you can claim for the repair bill. The comprehensive policy also covers third-party liabilities as well. This makes it compelling to buy the comprehensive cover.

Add-on Covers for Second-Hand Two-Wheeler Insurance:

Similar to a two-wheeler insurance policy for a new bike, there are add-on covers for second-hand two-wheelers as well. They provide additional benefits and act as an exhaustive coverage for your bike. Add-on covers for used bike insurance are effective and offer coverages for liabilities not covered under the comprehensive policy or third-party plan. Below are the details of the add-on covers for bike insurance:

Return to Invoice Cover (RTI)

If your insured vehicle sustains total damage or is stolen, the insurance company will pay the current market value or the Sum Insured to you. However, with the Return to Invoice add-on, the insurer will pay up to the original invoice value of the bike. This includes registration charges and road tax as well.

Nil or Zero Depreciation Cover

In case the damage to the insured bike is due to an accident, the replacement of parts is paid by the insurance company after considering the depreciation of the parts. However, with the addition of the Nil or Zero Depreciation cover, the insurer will not consider the depreciation of the parts while settling the claim.

Engine Protection Cover

Under the comprehensive insurance policy, the engine is not covered. In case of a repair or replacement of the engine parts, you will have to bear the repair bill and the insurance company will pay for the same. With the Engine Protection add-on, the insurer will pay for the replacement or repair of the engine.

Breakdown Assistance

Imagine you are stranded on a highway with a puncture to the bike tyre or if the bike is not starting, you will surely need assistance to get the bike to the nearest garage. Roadside Assistance add-on will provide assistance in case of breakdown.

Consumables Cover

Engine oil, nuts and bolts, screws are not covered under the standard comprehensive bike insurance policy while settling a claim. Consumables add-on cover takes care of such expenses by paying for consumables.

How To Get an Insurance Policy for a Used Two-Wheeler?

You can get an insurance policy for a used bike either if you are unhappy with the existing insurance policy’s coverage/premium or if it has lapsed. You can buy second-hand two-wheeler insurance online from insurance companies. Below is the process to buy used two-wheeler insurance:

  • Visit the insurance company’s website.

  • You will have to submit the scanned copy of bike documents such as the registration certificate and your ID proof or you can enter the bike registration number, owner details and get a bike insurance quote.

  • Once you initiate the insurance process, the insurance company will send a surveyor to inspect the vehicle.

  • Pay the premium and get the insurance policy instantly to your email address.

Renew 2nd Hand Bike Insurance Policy Online

You can process the bike insurance renewal through an online method as well. Follow the same process as mentioned above if you want a new insurance company to insure your used bike. However, if you are looking to renew the existing policy, then follow the process below:

  • Visit the insurance company’s website.

  • Sign in with your login credentials and you will be able to view the insurance policy for the insured bike.

  • You may be prompted to renew the policy since it is nearing the expiry date or you can select to renew used bike insurance.

  • Pay the premium and get the renewal bike insurance policy to your email address.

Documents Required to Purchase Second-Hand Bike Insurance:

Similar to the regular bike insurance, the documents to purchase used bike insurance are the same. Below are the details:

  • The new Registration Certificate (RC) with the new owner’s name.

  • Original (existing) policy document of the bike.

  • Address proof documents such as Aadhaar, Passport, Voter’s ID, etc.

  • Passport size photographs.

How to Transfer Bike Ownership and Insurance from One Person to Another?

The process to transfer bike ownership is simple if you follow certain steps. This will ensure a smooth process of bike ownership transfer. You can transfer the ownership of the second-hand bike at the Regional Transport Office (RTO) set up by the transport department. The office will issue a new RC under the new owner’s name. Read more about vehicle registration transfer process.

The process to transfer bike insurance to the new owner is also similar. New-age digital insurance companies offer services online, making it accessible to customers. Documents such as RC, address proof and the original insurance policy of the vehicle are required to get the insurance transferred. Read more about the vehicle insurance transfer process.

Things to Keep in Mind While Insuring a Used Bike:

Here are a few aspects you need to be aware of while insuring a used bike:

  • Ensure the new RC is on the new owner’s name.

  • Check the Insured Declared Value (IDV), an approximate estimate of the current market value of the bike. This is the Sum Insured, which is paid in case of a total loss.

  • Higher the coverage and lower the premium will offer the maximum insurance coverage for the used bike.

  • If you have an existing bike insurance policy, probably for a bike you recently sold, then get the No Claim Bonus (NCB) transferred to get the benefit of a discount.

  • You can choose from several add-on covers such as Invoice Protection, Nil or Zero Depreciation, etc. These add-ons offer additional benefits to your standard comprehensive insurance.

  • If you are changing the insurance company, then research about new insurance companies, their performance and services before you select the best insurance cover for your second-hand bike.

Also, read: Old Bike Insurance

Top 5 Tips for Second Hand Bike Owners

1) Check the Availability of Zero Depreciation Add-on

Zero Depreciation Add-on will help you retain the cost of depreciation at the time of a claim. Depreciation is the reduction in the monetary value of your bike with passing time. This Add-on will not allow an insurer to subtract depreciation from the claim amount.

Zero Depreciation is probably one of the best add-ons available in the market. However, it is not available for every bike or car as it has a certain time limit. A Zero Depreciation Add-on is offered up to 3 to 5-year-old bikes depending upon the insurance company. When you buy a second-hand bike, make sure to check the availability of this bike insurance add-on.

2) Get the NCB Transfer Certificate

NCB is an acronym for No Claim Bonus. This is a discount rewarded to a policyholder for not raising a claim which in turn implies that the policyholder was a responsible driver. Note that NCB is awarded to the policyholder and is not limited to his/her vehicle insurance policy. Thus, while buying a second-hand bike, make sure that you acquire an NCB transfer certificate from your previous insurance company if you have any amount of accumulated NCB. This will help you get a discount on your bike insurance premium. The transfer of NCB is not included in the process of registration. You need to make additional efforts in order to get the discount applicable on your 2 wheeler insurance.

Check: How to Transfer Bike and Car Insurance to New Owner

3) Know the Actual Value of your Second-hand Bike (IDV)

IDV stands for Insured Declared Value. It is the approximate current market value of your bike that you declare on your 2 wheeler insurance policy. When you buy a send-hand bike, its market value would be lower than its ex-showroom price for obvious reasons.  You can set an IDV approximately equal to the purchase price.

Remember that setting a lower IDV will bring your premium down but it will also prove to be a loss in case your bike goes under “total loss”. This is the situation when your bike’s repair or replacement cost exceeds the IDV you have set. This can happen due to a major accident or a natural calamity. On the other hand, setting a higher IDV would mean a higher premium. Thus, always set the correct amount of IDV.

4) Make sure that Correct Information is Present on the Documents

In the past people have suffered financial losses just because of a silly mistake in the information they provided. While buying a second-hand bike, a lot of documents are being transferred from the seller to the buyer. This process needs to be smooth and flawless. The information in each document should be correct.

The records should be correctly replaced where required. For example, the transfer of Registration Certificate (RC). An insurance claim can be denied if any information on the RC does not match. Same goes for other documents like a bike insurance policy, etc.

5) Always Buy Two-wheeler Insurance Online

Buying bike insurance is mandatory as per the law. A step forward is the compulsion is to buy a long-term bike insurance policy for new bikes. The importance of bike insurance has been made clear through strict rules and regulation. Taking this important step to minimize hassles is the key. Thus, one should always buy two wheeler insurance online. This will free you from depending upon someone else to buy a policy for you.

You can buy coverage as per your understanding and needs. Plus, the process is much faster as compared to buying the policy offline. Also, probably the most important aspect is that you will get a policy at a cheaper rate if you buy it online.

Frequently Asked Questions About Used Bike Insurance Policy:

Below are some of the common queries about second-hand bike insurance:

Is 2-wheeler insurance mandatory?

Yes. As per the rule stated in the Motor Vehicles Act, 1988, it is compulsory to have at least a third-party bike insurance to ride a two-wheeler in India.

How do I insure my old bike?

You can use the internet to find suitable bike insurance online. Compare the quotes and examine the coverage and the premium. A good insurance policy should be a combination of higher coverage at a lower premium.

What if my second-hand bike’s insurance has lapsed before I transfer the ownership?

To transfer the ownership, the RTO will require the original RC and valid insurance policy; however, if the policy has lapsed, you need to get the current owner to renew the insurance prior to registering the bike on your name.

Will the insurance company survey the bike before providing the insurance coverage?

The insurer if required will have a surveyor inspect the bike to set the premium for the coverage period.

Can I insure my second-hand bike online?

Yes. Online insurance is safe and easy to process and transact. With the help of the internet, you can compare insurance quotes and then decide to buy the insurance policy for your used bike.

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