2-Wheeler (bike) Insurance Policy

In India, motorcycles and scooters, which are two-wheeled vehicles, enjoy widespread popularity as a cost-effective and convenient means of transportation. Nevertheless, operating a two-wheeler entails inherent hazards, such as accidents, theft, and physical harm. In order to safeguard against these perils and adhere to legal mandates, acquiring a two-wheeler insurance policy is of utmost importance. This article delves into the various aspects of 2-wheeler insurance policies in India, including their types, coverage options, benefits, and regulatory requirements.

Subas Tiwari

Types of bike insurance

Bike insurance in India comprises two main categories: Third Party Liability Insurance and Own Damage Insurance. Third Party Liability Insurance provides coverage when your bike causes damage to another vehicle. On the other hand, Own Damage Insurance, often referred to as OD insurance, comes into play when your own bike sustains damage, including situations involving theft, where the insurance company provides compensation. It’s essential to note that Third Party Liability Insurance, or TP insurance, is mandated by the Motor Vehicle Act and is a legal requirement. Failure to possess this policy may lead to traffic police issuing a traffic violation ticket, commonly known as a challan.

These facilities are available under third party insurance

In the event that your motorcycle results in property damage, damage to another vehicle, injury to individuals, or loss of life in an accident, your insurance policy covers all associated legal expenses. This means that if the matter escalates to a court proceeding and you are required to pay fines, your insurance provider will cover those costs. There is a maximum limit of Rs 7,50,000 specified by the insurance company for this coverage.

15 lakh rupees are available on this condition

Within third-party insurance, there is a segment known as ‘Personal Accident Cover for the owner and driver.’ In the unfortunate event that the motorcycle driver, who possesses a valid registration certificate and a driver’s license, loses their life in an accident while operating the bike, the insurance company provides a compensation of 15 lakh rupees. This compensation is provided in the form of a personal accident cover. There are specific guidelines and procedures for claiming this compensation from the insurance company, which can be readily pursued by the family of the vehicle owner.

Choose Add on Rider Benefits

During Comprehensive Insurance, companies provide many types of add on benefits, in which case you can choose it according to your need. In this, 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

Opting for an extended insurance policy not only allows you to enjoy some cost savings but also relieves you of the annual renewal hassle. Additionally, it enables you to avail the no-claim bonus over the policy’s duration, even if you have made a claim within that timeframe.

Cover your 2-Wheeler with Comprehensive Insurance

Look into these statistics and realize the importance of insurance

2 wheelers constitute more than 80% of all vehicle sales in India
For every 1000 Indians, more than 100 owns 2 wheelers
About 13% of these vehicles are stolen every year
Which accounts for more than 300 such vehicles per day

What does motor vehicles act says regarding insurance?

Chapter XI of the MV Act, 1988 deals with Insurance of Motor Vehicles with Third Party Risk & Clause 146 deals with ‘necessity of for insurance against third party risk’.

Insurance for Third Party Liability

Currently, the Motor Vehicles Act stipulates that all two-wheelers must have insurance coverage for third-party liability. This coverage encompasses the responsibility for injuries and damages inflicted upon others, who are referred to as the third party. In this context, the first party is the vehicle owner, and the second party is the insurance company. This insurance, often known as Limited Liability Insurance, provides protection to the insured party, including the owner and the driver of the two-wheeler or pillion rider, against any third-party liability resulting from an accident. This liability covers damages or losses incurred by the third party or their property, as well as the owner/driver’s disability or loss of life resulting from the accident. However, the premium for third-party liability coverage is determined according to the regulations set forth by the Insurance Regulatory and Development Authority (IRDA).

Insurance for Comprehensive Cover

While MV Act does not provide for covering insurance for other types of risks like, 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?

The comprehensive cover (also called Package Policies) assures the following benefits-

What are covered (inclusions)?

On total or Partial Loss/ Damage to your 2-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 man-made 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 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 & not exhaustive)

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% 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

Benefits of 2-Wheeler Insurance Policy

Having a 2-wheeler insurance policy offers several benefits to policyholders:

Financial Security:Insurance provides financial protection in case of accidents, damage, or theft, reducing the financial burden on the policyholder.
Legal Compliance:Third-party liability insurance is mandatory by law, ensuring that all two-wheelers on the road are covered against third-party risks.
Peace of Mind:Comprehensive coverage offers peace of mind, knowing that you are protected in various situations, including accidents, theft, and natural disasters.
Customization:Policyholders can customize their coverage with add-on riders to meet their specific needs.
No Claim Bonus (NCB):Insurers offer NCB discounts for claim-free policy years, reducing the premium cost upon renewal.
Online Renewal and Purchase:Many insurers offer the convenience of purchasing or renewing policies online, simplifying the process for policyholders.

Factors Affecting Premiums

Several factors influence the premium of a 2-wheeler insurance policy:

Vehicle Model and Make:The make, model, and cubic capacity of the two-wheeler affects the premium. High-end and powerful bikes typically have higher premiums.
Age of the Bike:Older bikes may have higher premiums due to increased maintenance costs and lower market value.
Location:The location where the bike is registered and primarily used can impact the premium. Areas with higher instances of accidents or theft may have higher premiums.
Coverage Type and Add-Ons:Comprehensive policies with additional riders result in higher premiums than basic third-party coverage.
No Claim Bonus (NCB):A history of claim-free years earns the policyholder NCB discounts, reducing the premium cost.
Voluntary Deductibles:Opting for a higher voluntary deductible can lower the premium. However, this means the policyholder agrees to bear a higher portion of the repair cost in case of a claim.

Premium Comparison for Honda Activa 5G 125 [DL2 | 2023 | Petrol | NCB 0%]

Company Name	IDV	Yearly Premium
Liberty Insurance	44853	4426
Bajaj Allianz General Insurance	55927	4519
United India Insurance	54595	4038
Digit Insurance	46750	4331
Magma HDI	52696	4751
Chola MS General Insurance	47823	4177
HDFC Ergo	57285	4438
Future Generali	47824	4178
New India	50666	4202

Quotes taken from: https://www.insurancedekho.com

Claim Process

When an insured event occurs, policyholders must follow a specific process to make a claim:

Inform the Insurer: Notify the insurance company immediately after the incident and follow their instructions for claim registration.
File an FIR:In case of theft, vandalism, or accidents involving a third party, file a First Information Report (FIR) with the police.
Document the Incident:Gather all relevant documents, including photographs, repair estimates, and witness statements.
Submit the Claim:Complete the claim form provided by the insurer and attach all necessary documents.
Vehicle Inspection:The insurer may arrange for a vehicle inspection to assess the damages.
Claim Settlement: After verifying the claim, the insurer will either approve and settle it or request additional information if required.

Grievance Redressal Mechanism

Our study revealed that only a few insurance companies have posted a robust GRM system in their website. So, they are summarized 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 & lodge your grievance. Follow this up by sending e-mail & 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.

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).

IRDAI’s Integrated Grievance Management System (IGMS)

The Insurance Regulatory and Development Authority of India (IRDAI) has implemented the Integrated Grievance Management System (IGMS) as an online platform that enables policyholders to officially lodge their complaints against insurance companies. Through IGMS, policyholders have the capability to monitor the progress of their grievances and engage in direct communication with IRDAI.

What can the government do?

The irony is- almost all the insurance companies are doling out similar policies with almost the same inclusions & 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.

Conclusion

As a responsible bike owner, it’s essential to understand the types of coverage, factors affecting premiums, and the claim process. Additionally, regularly renewing your policy ensures uninterrupted coverage and may also lead to valuable discounts through the No Claim Bonus (NCB) system.

To sum it up, two-wheeler insurance represents a judicious investment to protect your motorcycle and offer you a sense of security as you navigate the streets of India.

Things You Must Know About a Lapsed Two-Wheeler Insurance Plan

As we all know, two-wheeler insurance is mandatory for every two-wheeler being ridden on the road in India, and riding your vehicle without insurance is not at all advisable or legal, for that matter. Hence, it is recommended to purchase and renew your bike insurance on time.

Two-wheeler insurance can be easily renewed online, saving you from the hassle of visiting the insurer’s branch office. There is a grace period of 90 days, wherein the insurer can create the policy as a break-in so that you can still retain certain benefits like NCB. However, after this 90-day period, you will have to buy a new policy and start over with no benefits.However, we often miss out on renewing insurance on time.

However, that doesn’t mean that you cannot revive your two-wheeler insurance policy.

What happens when you fail to renew on time?

A policy lapses when you do not pay the premium to renew the policy on time. Consequently, there are no benefits within the break-in period i.e., the time period when the old policy has expired and the new policy is still to come in effect.

The No Claims Bonus (or NCB) which you may have accumulated with your bike insurance over the years will be lost if the policy is allowed to lapse for more than 90 days, which includes up to 50% discount which stacks up under the NCB benefit. And obviously, this may result in a higher premium on renewal. Additionally, you will be unprotected against any damage or loss arising out of an accident and related third party liabilities. Therefore, the best way to keep such a scenario at bay is to renew your policy on time. In that regard, you can save both money and time by renewing bike insurance online.

How can you reinstate your lapsed policy?

Do note that you cannot renew a lapsed policy after 90 days. In scenarios like those, you have to buy a new policy that would require the necessary documentation and inspection of the vehicle, among other formalities.Renewing your two-wheeler insurance is mandatory, as riding a vehicle without insurance is an offense that is punishable by law. Owing to the convenience associated with renewing your bike insurance policy online, the whole process has now become easier.

What to do if your two-wheeler insurance has expired?

Insurers do remind customers through reminder texts or calls when the policy expiry date is near. But there can be certain situations when you miss out to renew on time. If you have lost track of your policy renewal date or have missed it, the first step to undertake is to call up your insurer and ask for assistance. Your insurer may renew your policy without any penalty if it is only a few days past the due date. Moreover, insurers don’t undertake inspection in cases where you have been trying to pay for the policy before it expired.

Renew your existing policy online or offline

When renewing your lapsed policy, you can do it online as well as offline. For the online mode, you can visit the insurer website, enter the required details and renew your policy online. While renewing online, keep all the vehicle documents handy as you will be required to enter the details. If you renew offline, you will have to visit your insurer, and he may ask a survey of your vehicle before issuing a new policy.

How to avoid lapses in insurance renewal?

The best way would do would be to renew on time. It is easy to keep track of the due date by signing up for email/SMS alert service. However, there is another smart way to avoid these hassles; just opt for a long-term two-wheeler insurance policy. Some insurers offer long-term insurance policies with coverage of up to 3 years. Choosing a long-term two-wheeler insurance policy saves you from the hassles of annual renewals while offering tangible benefits.

Grievance Redressal Mechanism

Our study revealed that only a few insurance companies have posted a robust GRM system in their website. So, they are summarized 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 & lodge your grievance. Follow this up by sending e-mail & 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.

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).

IRDAI’s Integrated Grievance Management System (IGMS)

What can the government do?

The irony is- almost all the insurance companies are doling out similar policies with almost the same inclusions & 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.

Conclusion

2-wheeler insurance policies play a critical role in ensuring financial security for two-wheeler owners in India. Whether you opt for mandatory third-party liability coverage or comprehensive insurance with a range of add-ons, having the right insurance policy is essential to protect your bike and yourself from unexpected events.As a responsible bike owner, it’s essential to understand the types of coverage, factors affecting premiums, and the claim process. Additionally, regularly renewing your policy ensures uninterrupted coverage and may also lead to valuable discounts through the No Claim Bonus (NCB) system.To sum it up, two-wheeler insurance represents a judicious investment to protect your motorcycle and offer you a sense of security as you navigate the streets of India.