Own Damage Vehicle Insurance Rules To Be Changed From 1st August

In India, it is mandatory to have at least third-party vehicle insurance before plying it on the roads. The compliance for this mandate is not much but it does not provide any cover for own vehicle damage. To get to know the solution to this issue, the government, the Supreme Court, and the IRDAI have come forward. In July 2018, long term third-party insurance was made mandatory, but later because of less affordability and high cost, this rule was done away. According to this rule, three years third-party insurance was made mandatory for four-wheelers and five years third-party insurance for the owners of two-wheelers.

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What has changed from August 2020 to Motor Insurance?

Previously, a comprehensive long-term insurance plan combines its damage as well as third-party insurance, but it will not be available now. The reasons for this withdrawal of long-term insurance are cited by the Insurance Regulatory and Development Authority of India, which are:

  • Affordability
  • Challenge of actual pricing
  • Selling forcefully

The impact of this change is mostly depending on the fact that when the vehicle was purchased.

If you are planning to purchase a two-wheeler after 01st August 2020, then you will be needed to purchase long-term third-party insurance for which the premium will be the same across all the insurance providers. For own damage cover, you can either purchase a bundled plan, which is long-term third-party bike insurance with one-year own damage coverage or the other option may be of purchasing two different policies, one for own damage and other for third-party insurance cover. In addition to this, you can ask for the discount on accrued No Claim Bonus at the time of policy renewal.

Let us now understand this whole Own Damage Cover precisely.

What is the Own Damage Insurance Plan for Bikes?

Own Damage Insurance, as per the name, provides coverage for your two-wheeler against losses and damages. It is a standalone bike insurance policy.

The main reason for introducing Own Damage cover is to provide insurance coverage to those who have third-party insurance cover only but want to insure their bike against accident, natural calamities, collision, or fire. This is because, before it, there were only two types of motor insurance plans – comprehensive policy and third-party insurance plans.

Let us take an example to understand it, Suppose you purchase a new two-wheeler and you instantly got third-party liability insurance for three years to provide coverage against third-party and legal liabilities. However, it is only after a year you realize the need of protecting your two-wheeler from losses and damages. But now it is too late and you have to wait for the renewal of your insurance for upgrading to a comprehensive two-wheeler insurance plan.

This is the case, wherein you can purchase your damage insurance cover for protecting your bike against damages and loss.

Who Should Buy Own Damage Insurance Plan?

  • If you have purchased a bike then you can choose to buy an Own Damage Insurance for protecting it from losses and damages.
  • If you have third-party two-wheeler insurance, then you can choose to purchase an Own Damage Insurance policy.

What is Covered in an Own Damage Insurance Policy?

The coverage that is provided with an Own Damage bike insurance is as follows:

  • Damage to your two-wheeler in Case of an Accident: This policy provides coverage for your bike against losses and damages caused due to bike accident.
  • Damages because of fire: Provides coverage to your bike when it gets damaged because of fire.
  • Theft of your bike: If your bike, unfortunately, gets stolen, then this insurance policy provides coverage for the losses.
  • Bike damage due to natural calamity: Offers cover for your bike if it gets damaged by any natural calamity.

Riders Available for Own Damage Insurance

With a handful of inclusions, this insurance plan also offers some add-on covers, which are:

  • Return to invoice: Go for this insurance cover, if you have purchased a new bike. This is because it provides you the last invoice value of your two-wheeler if it gets damaged beyond any repair or stolen.
  • Cover for zero depreciation: With zero depreciation cover for two wheeler, depreciation will not be counted for the parts of your bike, which directly says high claim amount at the time of claim.
  • Roadside assistance at the time of breakdown: This assistance at the road-side helps you get roadside assistance whenever you require it. Moreover, this does not act as a claim.
  • Cover for Tyre Protection: Protects your tyres.
  • Cover for Gearbox and Engine Protection: With this add-on, you can give protection to your bike’s engine and gearbox.
  • Cover for Consumables: You get the coverage for all the nitty-gritty of your bike such as screws, engine oil, bolts, nuts, grease, etc.

What Is Not Covered?

The own damage cover is one of the best two wheeler insurance plans for providing overall coverage to your two-wheeler, but some things are not covered:

  • Liability of Third-Party: It is a standalone own bike damage policy that provides coverage for your two-wheeler and it does not cover any third-party liabilities.
  • Consequential Damages: Unfortunately, your bike does not get coverage against damages that have not taken place during some accident.
  • Drink and Drive: Not only own damage cover but any insurance policy does not entertain the case wherein you get into some accident or mishap under the influence of alcohol. So, do not expect any help in such case.

Summing it up!

Own damage insurance is one of the safest ways of providing insurance coverage to your two-wheeler especially when you have purchased only third-party liability cover for it. This insurance cover will be available after 01st August 2020, so, if you are planning to purchase a bike after August 01st, then you can consider this option as it is one of the affordable and useful insurance covers. The government has taken a very well decision of introducing such an own damage insurance cover when comprehensive insurance cover looks expensive to some bike owners.

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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