Everything You Need to Know About KYC Norms in Two-Wheeler Insurance

Understanding KYC Norms

IRDAI launched the Master Guidelines on Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT). From January 1st, 2023, all two wheeler insurance providers must follow customer identification procedures while issuing a fresh bike insurance policy or at the time of bike insurance renewal.

Insurers cannot skip the KYC process as it ensures faster claim settlement and easy renewals. These regulations are mandated by the authorities to check the authenticity of applicants.

Purpose of KYC in Two Wheeler Insurance

KYC norms in bike insurance are implemented to authenticate customers and strengthen policy security. They help insurers:

• Verify the identity and address of policyholders
• Prevent identity theft and fraudulent policy purchases
• Reduce false or repeated claims
• Comply with AML & CFT regulations
• Enable smoother renewals and faster claim settlement

By completing KYC, both insurers and policyholders benefit from improved transparency and a more secure insurance process.

KYC Norms for Two Wheeler Insurance Providers

Here is a list of norms that every two-wheeler insurer has to follow for both individuals and juridical persons:

For Individuals

Note: Individuals who are unable to complete Aadhaar-based authentication due to illness, injury, or medical emergency must submit officially valid documents during the commencement of an account-based relationship.

For Juridical Persons

Types of KYC in Two Wheeler Insurance

Two-wheeler insurers may complete customer verification through the following methods:

1. Aadhaar-Based e-KYC

   • Digital verification using Aadhaar number and OTP
   • Paperless and quick
   • Ideal for online policy purchase and renewal

2. Video KYC

   • Live video interaction with insurer representative
   • Customer must present face and original documents
   • Helps validate real-time identity

3. Offline/Physical KYC

   • Documents submitted physically or via courier
   • Used for manual or exceptional verification cases

4. CKYC (Central KYC Record)

   • Details verified once and stored centrally
   • Reduces repeated documentation for future policies

When is KYC Required in Two Wheeler Insurance?

KYC may be required at multiple stages, including:

• Buying a new two wheeler insurance policy
• Renewing an existing policy
• Filing a claim
• Transferring policy ownership
• Switching to comprehensive bike insurance cover
• Updating address or contact details

In high-risk or exceptional scenarios, insurers may also carry out re-verification.

KYC Requirements for Used/Second-Hand Two Wheeler Insurance

KYC is mandatory during the transfer of a used or pre-owned two-wheeler. It applies when:

• A used bike is purchased
• Insurance ownership is transferred
• RC and policy details are updated

Commonly required documents include:

• Buyer's identity proof
• Address proof
• Transfer RC copy
• Previous bike insurance policy copy
• Self-declaration form (if applicable)

This ensures that the insurance is transferred only to the legitimate new owner.

Different Methods of KYC for an Individual

Here is a list of documents required as ID and Address Proof of an individual:

The AML and CFT guidelines by IRDAI help insurers detect fraudulent activities and conduct background verification of clients. Therefore, the KYC norms must be followed while issuing or renewing a bike insurance policy.

Video KYC Process for Two-Wheeler Insurance

Some insurers offer a digital Video KYC journey for policyholders. The general process includes:

1. Scheduling a video verification slot
2. Joining the secure verification link
3. Displaying your face clearly on camera
4. Showing original identity and address documents
5. Verifying basic personal details
6. Completing live authentication, if required

This digital process enables faster and paperless verification.

Common Reasons Why KYC May Get Rejected

KYC verification may be declined due to:

• Mismatch in name or date of birth across documents
• Blurred or unclear document scans
• Submission of expired ID proof
• Incorrect Aadhaar or PAN details
• Address mismatch with proof submitted
• Missing declaration form
• Incomplete or partial documentation

Ensuring accurate and clear documents helps avoid rejection delays.

How Long Does KYC Verification Take?

The verification time varies depending on the KYC method:

Digital verification methods are generally the fastest and most convenient.

Difference Between KYC and e-KYC in Bike Insurance

Do You Need to Complete KYC Again at Bike Insurance Renewal?

KYC usually does not need to be repeated if it has already been completed earlier. However, re-KYC may be required if:

• The policy has been inactive for a long duration
• There is a change in address or contact number
• The profile falls under a high-risk category
• Regulatory norms mandate periodic re-verification

KYC Requirements for Corporate/Commercial Two-Wheeler Insurance Policies

KYC norms are also applicable for:

• Delivery and courier fleet vehicles
• Company-owned two-wheelers
• Commercial or business-registered bikes

Insurers may require:

• Company registration proof
• Identity proof of authorized signatory
• Proof of business address
• Board resolution or authorization document (if applicable)

This ensures that the insured vehicle is legally owned and operated under the organization's name.

FAQs – KYC in Two-Wheeler Insurance