Two-wheeler insurance safeguards a two wheeler and its owner by offering protection against financial liabilities that may arise in case accidents occur.
Types of two-wheeler insurance
Liability Only Insurance Policy: Also called Act Only Policy, this policy is mandatory in India by law. It covers against property damage, loss, death or bodily injury to a third party because of an accident caused by the insured two wheeler. This insurance covers the owner of the two wheeler as well.
Comprehensive Insurance Policy: Also known as Package Policy, this covers everything included in a Liability Only Policy along with additional coverage for damage or theft of the two-wheeler. This is an optional policy.
Own Damage Policy: This covers against losses/damages caused to a two wheeler on account of:
- Natural calamities such as fire, flood, lightning, earthquakes, etc.
- Burglary, theft, riot, strike, malicious acts, terrorist activity
- Accident by external means
- Damage during travel by air, rail, road, water
Factors determining two-wheeler insurance premium
Two-wheeler insurance can be Comprehensive or Third Party. The former offers complete protection and hence the premiums are higher.
Insured Declared Value (IDV)
IDV is the amount the insurance company agrees to pay in case of a claim, and it is computed based on the manufacturer’s listed selling price of the two-wheeler. Higher the IDV, higher is the insurance premiums.
Cubic Capacity (CC)
Cubic Capacity is the two wheeler’s engine capacity and it plays a role in determining the two wheeler’s insurance premium. Higher the CC, higher will be the premium.
Insurance premiums become higher as the two-wheeler becomes older. This is because an old two wheeler has gone through greater wear and tear, and has an increased risk of breakdown and damages.
Place of registration
Insurance premiums vary as per the insurance zone in which the two wheeler is registered.
Registration zones are categorised as:
- Zone A – New Delhi, Mumbai, Pune, Bangalore, Chennai, Kolkata, Hyderabad and Ahmedabad
- Zone B - Rest of India
No Claim Bonus (NCB)
When a policyholder does not make any claim(s) during the policy period, the bike insurance company offers a No Claim Bonus (NCB) benefit, which is a discount on the two-wheeler’s future premiums.
Two-wheeler insurance does not cover:
- Mechanical breakdown
- Electrical breakdown
- Regular wear and tear
- Theft of two wheeler parts explicitly not covered in the insurance policy
- Loss/damage to the two wheeler if the driver is driving under the influence of alcohol
- Loss/damage to the two wheeler if the driver does not hold a valid license
- Loss/damage due to nuclear risks or wars
- Loss/damage that occurs outside the geographical region permitted
- Loss/damage that occurs if the two wheeler is used for purposes other than those specified in the policy terms
- Claims resulting from scenarios not covered in the policy’s listed liabilities
Note: The above exclusions may vary between insurance companies
Necessity of two-wheeler insurance purchase
Mandatory by law
Buying third-party liability insurance for two-wheelers is mandatory in India by law.
Comprehensive two-wheeler insurance offers complete protection against financial liabilities and legal penalties that may arise if a two wheeler gets involved in accidents.
Comprehensive two-wheeler insurance will offer you cover against:
- Third party liability (property damage, bodily injury, death) arising on account of an accident with your two wheeler
- Repair expenses if your two wheeler gets damaged in an accident
Several insurance companies have a network of cashless garages where a damaged two wheeler can be repaired free of cost. However, in case an accident occurs, you must intimate the insurance company at the earliest possible time within 24 hours. The cashless garage network list is available with the insurance company and can be accessed on the company’s portal as well.
In case of an accident, if you sustain serious injuries requiring immediate medical attention, comprehensive two-wheeler insurance will cover your medical expenses.
Several add-on covers with varying benefits are available with two-wheeler insurance, to offer enhanced protection to your two-wheeler. These covers are:
- Zero Depreciation cover
- Medical cover
- Personal Accident cover for rider and pillion
- NCB Retention cover
- Accessories cover
As mentioned above, every claim-free policy year entitles the policyholder to a No Claim Bonus (NCB).
Tips to help you buy the right two-wheeler insurance policy
It is vital to pick an IRDAI-approved insurer, and check the insurer’s claim settlement ratio and customer service records.
You may choose a comprehensive insurance policy or a third party cover. It is advisable to buy a comprehensive two-wheeler insurance, since it offers complete protection for Own Damage as well as third party.
Opting for the right Sum Insured ensures that you are fully covered against all losses or damages as applicable under the policy.
Choice of add-ons
While purchasing two-wheeler insurance, assess the benefits of each add-on cover and opt for the ones you really need and which will offer enhanced protection for you and your two wheeler.
This is the amount the policyholder voluntarily agrees to pay in the event of a claim towards his/her two wheeler. It is calculated as a specific percentage of the total claim amount, hence deductibles must be chosen wisely after a careful evaluation of both the sides of the deductibles. Voluntary deductibles lower the premium to a certain extent.
Compare insurance policies offered by different insurers and choose the one best suited to your specific requirements, budget, etc.
Buying a two-wheeler insurance policy online facilitates easy comparisons, involves less paperwork, makes the overall process simpler, and also works out cheaper as discounts are often offered on the premiums, thus lowering the overall insurance cost. These low costs are mainly due to elimination of intermediaries and payable commissions.
Always go through the policy terms and conditions, benefits, inclusions and exclusions in detail.
It is imperative to ensure that you renew your two-wheeler insurance policy on time without breaks. Breaks in policy renewal often require another inspection by the insurance company. Recently, some insurance companies have started offering online renewal of two-wheeler insurance, wherein no inspection is required.
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