Why Bike Insurance Claims Are Rejected for Modified or Customised Bikes?

Bike Insurance Claim Rejection Reasons for Modified or Customised Bike

Let's look at all the primary and most common reasons for bike insurance claim rejection in case of a modified or customised bike:

1. Undisclosed Modifications

   The main reason for claim rejection is failing to inform your insurer about modifications, whether minor or major. These can include:

   • Cosmetic changes (custom paint, decals, lights)
   • Structural changes (handlebars, chassis alterations)
   • Accessories (aftermarket alloy wheels, seat replacements, storage boxes)

   If these updates are not declared to the insurer, it can lead to the following consequences:

   • The insurer cannot update your bike's risk profile.
   • The bike's insured value (IDV) becomes inaccurate.
   • Any damages related to those modifications are treated as policy violations.
   • As a result, the bike insurance claim is rejected for misrepresentation or non-disclosure.

2. Modifications That Compromise Safety

   Some aftermarket modifications may enhance aesthetics but can compromise the bike's safety and stability. Here are the examples:

   • Extremely loud exhausts
   • Raised or shortened handlebars
   • Oversized tyres
   • Altered suspension setups
   • Unapproved performance kits

   If the surveyor concludes the accident resulted from unsafe or unstable modifications, the insurer may reject the claim due to heightened risk caused by the owner.

   Example:

   Oversized tyres that impact braking distance can cause accidents, leading to insurer denial.

3. Illegal or Non-RTO Approved Modifications

   The RTO permits only certain types of modifications, and as a bike owner, you must be aware of these permitted modifications. If your customised bike violates these rules, it is considered illegal for public roads. Some illegal modifications may include:

   • Modified exhausts exceeding noise limits
   • Structural changes in chassis/frame
   • Engine swaps without approval
   • Extreme performance modifications
   • Changing vehicle body type

   If the bike is declared illegal, the insurer is not obliged to honour claims due to violation of law.

4. Mismatched Information in Policy and Actual Bike

   Bike insurance companies maintain detailed records of:

   • Engine specifications
   • Chassis details
   • Dimensions
   • Accessories covered
   • IDV (Insured Declared Value)

   If the bike's actual condition does not match these records due to undisclosed changes, the insurer may decline the claim for misrepresentation.

   Example:

   If your policy lists a stock bike but the surveyor finds undeclared changes, the claim may be denied.

Other Common Reasons for Bike Insurance Claim Rejection

Even if your bike is not modified, several general reasons can lead to claim rejection. These apply to all two-wheelers.

1. Inactive or Invalid Two Wheeler Insurance Policy (Lapsed/Expired Policy)

   If the policy expires and you neglect to renew bike insurance, any claim during this lapse will be denied. The insurer only covers losses when the policy is current.

2. Driving Violations

   Here are a few circumstances which lead to driving violations and, hence, lead to claim rejection:

   • Not holding a valid driving licence, registration certificate, or inactive two wheeler insurance policy.
   • Drunk-driving or under the influence of drugs.
   • Overspeeding, racing, or performing stunts while riding the bike.
   • Using the bike for illegal activities, such as racing.

   Such situations are considered wilful negligence, and insurers do not cover them.

3. Delayed Intimation to the Insurer

   Most insurers require you to inform them about an accident or theft within 24–48 hours. Delays in reporting make it harder for the insurer to verify the loss and may result in claim denial.

4. Repairs Done Without Surveyor Approval

   If you repair your bike before the insurance surveyor inspects the damage, your claim may be fully rejected, as the insurer cannot independently verify the cause. Always wait for surveyor's approval before repairs.

5. Using a Private Bike for Commercial Purposes

   When your personal bike is used for commercial purposes, such as delivery services, rentals, commercial courier work, or paid rides, it violates the terms of a private vehicle policy.

   This can lead to a denied claim, as commercial usage increases risk and requires a different two wheeler insurance policy.

6. Fraudulent or Exaggerated Claims

   A claim may also be rejected if the insurer detects any fabricated accidents, staged theft, inflated repair bills, tampered documents, or misleading information. Sometimes, any fraudulent activity can also lead to legal action.

7. Missing Required Documents

   If you fail to provide essential documents like RC (Registration Certificate), Driving Licence (DL), bike insurance policy copy, FIR in case of theft/third-party accidents, repair bills, etc.

How to Avoid Two Wheeler Insurance Claim Rejection for Modified Bikes?

To ensure your claim is honoured, you must follow the tips below:

• Always declare any modification to the insurer before making it.
• Go for a bike insurance policy endorsement with your insurer.
• Maintain bills and proof of installation.
• Ensure modifications follow RTO guidelines.
• Update IDV after modifications.
• Understand your policy terms clearly.

FAQs: Bike Insurance Claim Rejection for Modified or Customised Bikes