Is It Mandatory to Buy Bike Insurance from Bike Dealers?

You did thorough research, established a credit score to finance your vehicle, and found a good bike dealer near you. However, when it comes to buying bike insurance, these bike dealers offer bundled bike insurance policies with their sale packages to attract you. But it is not necessary to buy a bike insurance policy from your bike dealer. Read further to know more.

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Should You Always Buy Two-wheeler Insurance from Dealer?

The feeling of owning your dream two-wheeler is unparalleled. You invest your hard-earned money and efforts in finding the right deal. You always try to negotiate with the dealer to crave the discounted price tag. During this, you are most likely to get an offer which might give you a discount or even it can come for free, that is a bike insurance.

In India, automobile dealers offer bundled bike insurance policies with the vehicle instead of offering a cash discount. So, the question comes, is it necessary to buy a bike insurance policy from your bike dealer? Well, it is not a compulsion. As per the Competition Commission of India (CCI), you don't need to purchase a motor insurance policy from the dealership.

Under the Competition Act 2022, the CCI was established to check and prevent malpractices done by automobile dealerships that cause adverse effects on competition. In addition, the CCI helps to promote and sustain competition in the industry and protects the interest of the consumers by giving them a wide range of choices. It also assures the protection of the rights of the local participants in the market.

Can You Buy a Motor Insurance from a Dealer for Free?

Do you know your two-wheeler insurance policy can never be free of cost? A 2-wheeler insurance policy is a financial security offered to the policyholder in exchange for a premium amount. When you buy a motor insurance policy from an automobile dealer, they offer you a non-discounted premium. Although, it is presented to you in such a manner that it seems the company is providing it for free against your total bill.

Many times it turned out that you have paid a higher premium amount in comparison to the plan purchased by yourself. When the bike dealer says it is free, it might be only for a year, and you are liable to pay the premium for the next coming years.

What is the Deal Between General Insurance Companies and Automobile Dealers?

Your bike dealers have tied up with their in-house insurance company or an external general insurance provider to offer you the policy on your sales package. These insurance companies charge a hefty commission to the bike dealers. Also, these automobile dealers do not even disclose to their respective two-wheeler buyers that their NCB can be transferred from the previous insurance company to their brand-new vehicle without any hassles. By doing so, they intact their commission.

Points to Remember While Buying a New Two-wheeler

As a respective two-wheeler buyer, you can avail insurance services from any insurance provider in the market. With that saying, here is a list of pointers that you should keep in mind while you are planning to buy a new vehicle from the dealers-

  • As per the Competition Act 2022, the CCI has declared it is not compulsory to buy insurance services from automobile dealers.
  • As a potential buyer, you might look for cash discounts and opt for free bike insurance coverage offered by these bike dealerships. However, this is a myth as it is not a free product, some hidden charges or maybe higher premiums are included in it.
  • Before finalizing the deal, you must explore the options in the market. You can start this by doing an online comparison to avail the benefits of the best bike insurance policy.
  • For online bike insurance comparison, you can visit the website of Policybazaar Insurance Brokers Private Limited, where you can start by comparing the insurance plan offered by more than 20+ insurers in India.

Final Words

In finding the right and suitable two-wheeler, do not get misguided by the term 'free bike insurance policy' offered by the bike dealers. Instead, make significant parameters such as inclusion, exclusions, add-ons, deductibles, IDV, policy tenure, etc., while choosing the 2-wheeler insurance plan.

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Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

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^The renewal of insurance policy is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. Actual time for a transaction may vary subject to additional data requirements and operational processes.

^The buying of Insurance policy is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. Actual time for transaction may vary subject to additional data requirements and operational processes.

#Savings are based on the comparison between highest and the lowest premium for own damage cover (excluding add-on covers) provided by different insurance companies for the same vehicle with the same IDV and same NCB.

*TP price for less than 75 CC two-wheelers. All savings are provided by insurers as per IRDAI-approved insurance plan. Standard T&C apply.

*Rs 538/- per annum is the price for third party motor insurance for two wheelers of not more than 75cc (non-commercial and non-electric)

#Savings are based on the comparison between the highest and the lowest premium for own damage cover (excluding add-on covers) provided by different insurance companies for the same vehicle with the same IDV and same NCB.

*₹ 1.5 is the Comprehensive premium for a 2015 TVS XL Super 70cc, MH02(Mumbai) RTO with an IDV of ₹5,895 and NCB at 50%.

*Rs 457/- per annum (1.3/day) is the price for the third-party motor insurance for private electric two-wheelers of not more than 3KW (non-commercial). Premium is payable on an annual basis