Research says, India witnesses over five lakh road accidents annually with most of the incidents involve two-wheelers. In such a situation, it is important to protect our two-wheelers and ourselves. If you’re wondering, what it requires, go through the below piece where we are telling you about taking a two-wheeler insurance policy.
Subas Tiwari
There are two types of bike insurance-third party liability insurance and on damage insurance. A third-party insurance policy covers you when your bike damages other vehicle. If your own bike gets dented then it is the on-damage insurance that comes to rescue. Third party liability insurance is a mandatory policy and also called TP insurance. A person needs to take this policy following the Motor Vehicle Act. And you stand a chance to get a traffic challan if you’re not a policyholder of third-party insurance. Good part is that, in both the kind of insurance policies, the company pays for any theft of the vehicle.
What the third-party insurance covers
Third-party insurance covers you when your bike damages someone’s property, someone’s car, bike or if anyone gets hurt or god forbid if someone dies in an accident with your vehicle. The policy will meet whatever legal expenses are incurred due to the above situations. Also, the insurance company will pay for you if a case goes to the court and the same asks to pay any fine. Kindy note that, an insurance company can pay a maximum of Rs 7,50,000 in the above-mentioned cases.
Third party insurance has a section of “Personal Accident Cover for Owner Driver”. The insurance company gives Rs.15 lakh if the bike driver dies in an accident while driving. S/he can claim this amount when the person has a valid registration certificate and driving license. This amount comes in the form of personal accident cover. However, there is an easily obtained, comprehensive rule, under the third-party insurance that comprehends all policies. Where the vehicle owner’s family can claim for compensation from the insurance company.
Choose add ons carefully
In a comprehensive insurance policy, companies provide many add on benefits. You can opt those match your need. In this policy, you will get the facility of zero depreciation cover, engine and gearbox protection cover, key and lock replacement cover, helmet cover, 24×7 site assistance add-on, etc.
Take insurance for a long time
By taking an insurance plan for a long time, you can also save a little money and you can also get rid of the hassle of renewing it every year. Apart from this, you can take advantage of the no-claim bonus throughout the term of the policy. Even if you have made a claim during this time period.
The following figures tell you the importance of insurance:
- Two-wheelers constitute more than 80 per cent of all vehicle sales in India
- For every 1000 Indians, more than 100 owns a two-wheeler
- About 13 per cent of these vehicles are stolen every year
- Which accounts for more than 300 such vehicles per day
What does the motor vehicles act says about an insurance?
Chapter XI of the MV Act, 1988 deals with Insurance of Motor Vehicles with Third Party Risk & Clause 146 deals with “necessity of insurance against third party risk’.
Third party liability insurance
As of now, the MV Act mandates that all two-wheelers are to be covered under the third-party liability which shelters liability for injuries and damages to others, that you (the vehicle owner) is responsible for. This is also called Limited Liability Insurance which covers the insured and the owner/driver of the two-wheeler/pillion rider against third party liability arising out of an accident, which causes damage or loss to the third party or its property as well as death/disability of the owner/driver arising out of the accident. However, to fix the quantum of premium for third party liability cover, the IRDA rules will apply.
Insurance for comprehensive cover
While MV Act does not provide for covering insurance for other types of risks including, theft, fire, etc, as also damage to the owner’s vehicle, almost all the general (non-life) insurance companies are offering the comprehensive cover as an optional cover, which is not mandatory.
Why cover the vehicle for comprehensive cover?
A comprehensive policy covers the following:
The comprehensive cover (also called package policies) assures the following benefits-
On total or partial loss/damage to your two-wheeler
- Against natural calamities such as-
- Fire
- Explosion
- Self-ignition or lightening
- Earthquake
- Flood
- Typhoon
- Hurricane
- Storm
- Tempest
- Inundation
- Cyclone
- Hailstorm
- Frost
- Landslide
- Rockslide
- Against manmade calamities such as
- Burglary
- Theft
- Riot
- Strike
- Malicious Acts
- Accident by external means
- Terrorist activity
- Any damage in transit by road, rail, inland waterway, lift, elevator or air
What are not covered in your policy (exclusions)?
- Normal wear & tear
- Breakdowns
- Consequential loss
- Loss occurred due to invalid driver license (expired license)
- Loss occurred on account of drunken driving and/or drugs intake
- Loss due to Civil War, War, etc
- Claims arising out of contractual liability
- Use of the vehicle otherwise than in accordance with ‘Limitations to Use’
(as and when driven by a person other than owner/driver and/or as stated in the ‘driver’s clause)
- Any accidental loss or damage and/or liability caused/sustained/incurred outside the geographical area
(The list is indicative and not exhaustive)
What are optional add-on covers?
The following additional covers are available on payment of extra premium-
- NIL Depreciation Cover (Nothing payable in case of partial loss; depreciation available to a maximum of 50 per cent on various metal, plastic, fibre or rubber parts in the event of total loss)
- Loss of accessories (electrical/electronic)
- Loss of driving license
- Daily cash allowance (during the period of post-accident repair)
- Engine protection
- Tyres & Tubes
- NCB Protection
- Anti-Theft Device
Grievance redressal mechanism
Our study revealed that only a few insurance companies have posted a robust GRM system in their website. So, they are summarised below for our readers.
What is your grievance?
- Any partial or total repudiation of claims by the insurance company
- Any dispute in regard to premium paid or payable in terms of the policy
- Any dispute on the legal construction of the policy in so far as such disputes relate to claims
- Delay in settlement of claims
- Non-issue of any insurance document to consumer after receipt of the premium
- Any other grievance (not specified above)
- Tier-I- call the Company’s toll-free number or customer care number and lodge your grievance. Follow this up by sending e-mail and hard copy to ensure that your complaint is on their desk for their first-look.
- Tier-II– If dissatisfied with the reply, escalate to the Company’s AVP or company’s customer service desk at apex level-follow the same as above.
- Tier-III– If the issue still remains unresolved, then approach the insurance ombudsman pertaining to your jurisdiction for the redressal of your grievance. Access to irdaindia.org & www.gbic.co.in/ombudsman.html )
What the government could do?
- The irony is- almost all the insurance companies are doling out similar policies with almost the same inclusions and exclusions- leaving the consumer more confused than ever. He is forced to choose that policy which charges reasonable additional premium for add-on covers to bring out the BEST POLICY for consumer benefit!
- IRDA could mandate to bring out a standardized comprehensive cover covering all major aspects of some vital covers (which are now in the add-on list) such as anti-theft device which would be compulsorily offered by insurance companies while selling a comprehensive policy to the consumer
Important to know
- Go for policy cover for a longer period (to avail discount)
- Go for policy purchase online (discounts are available)
- Go for vital additional covers such as engine protection, zero depreciation and anti-theft device (to ensure additional protection on payment of a small price)
