Team AckoJun 11, 2021
For those who are not familiar with the law governing bike insurance—purchasing at least a Third-party Liability Two-wheeler Insurance Policy is compulsory in India. This rule is in accordance with The Motor Vehicles Act. If you fail to comply with this law, you will have to face monetary penalties. You can also end up in jail for non-compliance! Worse, an accident caused by an uninsured bike can have severe legal consequences. But why is bike insurance mandatory in India? Read ahead to know the answer and other aspects related to the mandatory nature of vehicle insurance in India.
The brief answer to the question ‘why is bike insurance mandatory in India’ is that accidents are unpredictable. This unpredictability makes it important to buy insurance for yourself as well as for those who might be affected by your vehicle. Therefore, there are two major types of bike insurance policies available in the Indian market: Third-party Liability and Comprehensive Bike Insurance.
Of these, the Liability Plan is mandatory. The Comprehensive plan offers wide-ranging coverage and includes the mandatory cover. Therefore, no matter which plan you pick, you shall have the mandatory cover.
A bike insurance policy protects you in two major ways: Protection against legal Liabilities and Protection against financial expenditure arising out of bike-related mishaps.
If your bike goes out of control and injures a pedestrian or damages someone’s property, you are legally liable to pay for the damage. A Third-party Liability policy protects you against such liabilities, where the insurance company will manage the legal liabilities on your behalf as per the terms and conditions.
If your bike gets damaged in a flash flood or is affected by fire caused during riots, a Comprehensive Bike Insurance Plan will help you to get the bike repaired without spending a huge sum of money from your pocket. The insurance company will handle the repair work as per the terms and conditions of the policy.
The extent of the two-wheeler insurance policy’s coverage depends upon the type of cover. A basic Third-party Liability plan offers minimal coverage, a Comprehensive Plan offers wide-ranging coverage, and a Comprehensive Plan along with suitable Add-ons offers extensive coverage. The premium for the same increases respectively. Here’s a snapshot of the coverage offered by different types of policies.
A liability-only policy offers the following coverage to the policyholder.
Legal issues arising out of injury to a 3rd person or damage to 3rd person’s property are handled by the insurer as per the terms and conditions. They offer monetary compensation to the third party.
A Comprehensive Plan offers the following coverage to the policyholder. It also covers the points mentioned in the Third-party Liability Cover section.
Several areas in India have become prone to damages due to natural calamities such as flash floods, cyclones, fire, etc. If your bike gets damaged because of such issues, the repair cost shall be managed by the insurer.
Apart from natural calamities, there are man-made calamities as well. A big-scale riot can cause a lot of damage to the city’s infrastructure. If your bike gets damaged in such riots, you can raise a claim with your insurer for appropriate compensation.
Bike theft is a possibility not just in rural areas but in semi-urban and urban areas as well. A Comprehensive plan covers the policyholder against bike theft. In case of such an unfortunate event, the policyholder is compensated with the bike’s Insured Declared Value.
You also have the option of purchasing a Comprehensive plan and enhancing the coverage by buying suitable Add-ons. You will have to pay a bit extra to buy the Add-on—you can buy multiple Add-ons and pay for each accordingly. These Add-ons offer great service and assistance in times of need. Here’s a list of some of the popular bike insurance Add-ons.
With this Add-on, the insurer will skip the depreciation calculation while settling claims. As a result, you will receive a higher claims pay-out.
This can be viewed as accident coverage for the pillion rider. This kind of Add-on is ideal if someone regularly travels as a pillion rider with you.
In case of a total loss, the insurer will reimburse you with the bike’s invoice value if you opt for this Add-on. Otherwise, the insurer considers the Insured Declared Value while settling total loss claims. Insured Declared Value is always less than the Invoice Value.
With this Add-on by your side, you can raise a claim and still be eligible for the renewal discount known as No Claim Bonus (NCB). It protects your No Claim Bonus component, hence the name—NCB Protection.
Also, read: IRDAI Rules For Two Wheeler Insurance Policies
The Internet and smartphones have changed the world. Nowadays, almost everything can be purchased with just a few clicks. Bike insurance is no different. You can insure your bike under five minutes, from start to finish, on insurance company’s websites. Online two-wheeler insurance is easy to understand, quick to buy, and convenient to claim.
Here are some handy pointers to help you buy bike insurance online.
Understand your insurance requirements before setting out to buy a policy.
Check the cover, premium, and features of the policy in detail.
Have a look at the terms and conditions of the plan.
Digital-first insurers are known to offer enhanced coverage at incredibly low prices.
Go for a Comprehensive plan for a wide-ranging cover.
Select only those Add-ons that will add value to your policy.
Here’s a list of common queries concerning bike insurance in India.
Is bike insurance mandatory in rural India as well?
Bike insurance is mandatory across India, including rural areas.
Is it necessary to insure my bike even if I do not use it?
Bike insurance is a legal requirement. All bikes, whether in use or not, must be insured for your benefit.
I have lost my insurance papers and do not remember the policy’s expiry date. What should I do?
In this case, you can contact the insurance agent or the company from whom you have purchased the policy and request for a copy of the policy.
The insurance company has made an error in mentioning the bike’s registration number in the policy? What should be done?
Get the error rectified with the insurance company via Policy Endorsement at the earliest.
Is a policy purchased online considered a valid two-wheeler insurance document?
Yes, bike insurance policies purchased online are valid policies, provided you buy them from a certified insurer. You can look for the insurer’s IRDAI registration number to confirm their authenticity. The number should be available on the insurer’s website.
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