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5 Things You Should Know Before Purchasing a Bike Insurance Policy

Are you also flipping through various bike insurance quotations from different motor insurance companies? Do you also want to ensure that you pay only for the policy that is within your budget and caters to all your needs?

Then have a quick look at some of the important things that you should know before purchasing bike insurance in India.

Before buying a two-wheeler insurance plan, you need to consider a myriad of factors such as its mileage, design, comfort, maintenance cost, and the actual price. Apart from these factors, it is important that you take into consideration a bike insurance policy as well.

It is mandatory to buy two-wheeler insurance for all the bike and scooter owners in our country. Either you can buy a minimum of third-party two wheeler insurance cover or an all-inclusive comprehensive cover.

Types of Two-wheeler insurance Policies

  • Third-party cover - It covers the damages caused to a third person, vehicle or property. It will not cover damages caused to you and your vehicle.
  • Comprehensive cover - In addition to the third-party cover, it also provides coverage to you (vehicle owner/policyholder). The insurance premium is comparatively higher for a comprehensive plan, as it covers all the major damages. You can choose a value-for-money product after comparing various products that are available in the market.

Have a quick look at some of the important factors that you should know before purchasing a bike insurance policy-

1. Factors Affecting the Cost of Premium

The following factors will influence the insurance premium of your two-wheeler insurance policy-

  • Make and model of the two-wheeler
  • The engine capacity
  • City of registration
  • Type of cover (third-party or comprehensive)
  • IDV
  • Safety installations like an anti-theft device
  • Driving records
  • Usage of the vehicle (personal or commercial use)
  • Annual premium or long-term premium
  • Automobile association membership
  • Bonus or discounts offered by the insurance company
  • Online/offline insurance policy

IDV (Insured Declared Value) is the current market value of your two-wheeler. The insurance company will decide the IDV as per the market value after adjusting against the depreciation.

The depreciation of the two-wheeler will be calculated as per the below table:

Age of the Vehicle

                % of Depreciation

Less than 6 months

5%

Above 6 months and less than 1 year

15%

Above 1 year and less than 2 years

20%

Above 2 years and less than 3 years

30%

Above 3 years and less than 4 years

40%

Above 4 years and less than 5 years

50%

 

The insurance company’s liability is up to the IDV mentioned in the insurance policy.

2. No-Claim Bonus

If you have not made any claims in the previous policy year you will get a no-claim bonus while renewing the policy.

The no-claim bonus increases with each claim-free year. The no-claim bonus ranges between 10% and 50%.

If you claim the policy in the third year after the purchase of a vehicle, then the no-claim bonus will be nullified while renewing the policy in the fourth year. It will be applied again from the fifth year starting with the lowest percentage of no-claim bonus.

3. Add-on Covers

Apart from the basic coverage, it is important for you to know about the add-on coverages. You can enhance your bike insurance cover by opting for various add-on covers such as personal accident cover, pillion rider cover and roadside assistance, to name a few. The insurance premium will increase with the inclusion of the add-on cover. If you have a specific risk factor, it should be covered by the insurance policy.

4. Deductibles

There are two types of deductibles- Compulsory and Voluntary Deductibles. The voluntary deductible will be applied over and above the compulsory deductible.

You should contribute to the voluntary deductible to decrease the insurance premium. However, it will reduce the claim settlement amount.

5. Exclusions of a Two-Wheeler Insurance Policy

Your bike insurance claim will be rejected under the following circumstances

  • Mechanical or electrical breakdown of the vehicle
  • Normal wear and tear
  • Aging of the vehicle
  • Wear and tear of consumables such as tires and tubes (unless the vehicle is damaged)
  • Loss or damage of the vehicle due to the act of terrorism or war
  • Damage to the vehicle by a person driving without a valid driving license
  • Damage to the vehicle by a person driving under the influence of alcohol or drugs
  • The private vehicle being used for commercial purposes

You can easily buy a two-wheeler insurance policy online as well as renew the existing policy online.    

Usually, the insurance companies offer a discount on premium when you buy a policy online. You can avail a discount between 5% and 10% on the premium.

To buy the insurance policy at the best price, it is advisable that you compare the insurance policies offered by various companies. And choose the best bike insurance policy that meets most of your needs and falls into your budget.

Over to You!

If you know precisely what you need, then buying a bike insurance policy in India is a simple task. The right way to do it is by asking relevant questions from your motor insurance provider. There are various bike insurance plans offered by reputed insurance companies in India. The insurer will assess various kinds of risk factors associated with your bike before insuring it.

However, it is recommended that you opt for a comprehensive insurance policy to cover all kinds of risks and enjoy your peace of mind!