The bike is widely used in India. Some use it for the daily commute, some use it for their jobs and for some, the bike is a passion. I am sure you want to protect your riding companion from any damage which may hamper your finance also. Two wheeler/ bike Insurance is the coverage to protect the loss or physical damage to the bike. This damage can happen due to road accidents, thefts, fire, natural calamities such as flood, earthquake etc. This article covers the importance of having bike insurance, types, exclusions and the important points to remember while buying or renewing bike insurance online.
Why is Bike insurance Important?
As stated earlier, a bike is very important in the bike owner’s life. You are a good driver and extremely careful about your bike but you may face accident due to other drivers’ negligence or mistake. This accident can damage your bike. You have to spend to repair the bike to make it street ready again.
Suppose, there is a flood and your bike is parked in the ground floor parking lot which will also damage your bike. Again you have to spend the cost of bike repair and if it is permanently damaged you have to buy another bike.
In both the cases you have to spend from your pocket which is not because of you and you cannot completely eliminate those risks. What you can do is to take care of your finance to mitigate those risks. Comprehensive bike insurance can save you from those risks which may hamper your finance.
Types of Two Wheeler Insurance:
There are two types of two-wheeler insurance plans, one is Third Party Insurance and another is comprehensive car insurance.
Third party insurance covers the financial loss or damage to other individuals, their property or vehicles due to your bike. Here the third party means other than the two parties who are present in the insurance contract i.e. insured and insurance company.
Third party insurance covers same as car insurance is mandatory for bike also. Riding a two-wheeler or bike on Indian roads without third party insurance is a punishable offence under the motor vehicles act 1988.
The base premium for the third party insurance is according the engine capacity of the bike and it is fixed by IRDA (Insurance Regulatory &Development Authority of India). The premium is being set by IRDA in every financial year. The maximum cover for a third party insurance is Rs 1,00,000. However, the minimum claim for a third party insurance is capped at Rs 6000.
A comprehensive bike insurance covers the loss third party as well as loss or damage of own bike due to accident, theft and natural calamities. This is important to have for any two-wheeler or bikes as you will become worry-free about financial losses to your bike if some unwanted event happened.
Exclusions from Bike Insurance:
You will not get a claim from the insurance companies for the following cases.
- Any damage during driving under the influence of Alcohol or drugs
- Damage during war
- Bike damages when you are driving without valid driving license
- Any damage when the bike is used during any illegal activity.
- Damage to a bike that you don’t own
- Damages when the policy is not active
- Tire and tube punctures.
Some Important terms about Two Wheeler/ Bike Insurance:
Some of the following important terms used for bike insurance
Insured Declared Value (IDV):
Insured declared value is the maximum value of the bike which is set during the buying of insurance. This is the maximum amount you can get during a claim. The sum assured of insurance policy does not exceed the IDV of the bike. Remember that the insurance premium depends on IDV. The higher the value, the premium would also be high.
The value of the bike reduces over time due to wear and tear of the mechanical parts. The insurance company calculate the depreciation and does not pay the difference amount when you claim. Hence, you are getting less amount and you have to pay the balance (Difference between repair and claim amount) amount from your pocket. If you have zero depreciation cover you don’t have to pay the difference amount. The entire amount is to be paid by the insurance company. It also covers repair/ replacement costs of rubber, nylon and plastic components of the bike.
No Claim Bonus (NCB):
When you don’t claim insurance in a particular year, you get no claim bonus on the renewal of the insurance. The no claim bonus is given in the form of discount in the renewal premium. Some insurance companies give as high as 50% discount on renewal premium as no claim bonus. Even if you change your insurer while renewing you can get the no claim bonus. The no claim bonus is generally accumulated up to 5 years.
When you claim the repairing cost of your bike you have to bear a part of the payment to the service center it is called as compulsory deductibles. If you bear some cost over and above the compulsory amount it is called a voluntary excess. After paying the voluntary excess you will get the claim amount from the insurance company.
The information of the bike which you give during buying of insurance is very important to arrive at the IDV and premium. An insurer accepts or rejects your application based on that information you provide. A material fact is such an information which would affect the insurer’s decision and you should not suppress that information to the insurer. It may cause a problem during the claim.
Also Read: Five Reasons Why You Need Home Insurance
Important Points to Remember while Buying or Renewing:
People are mostly considering the factor of lowering the premium as much as possible. But you have to access the requirement also. My suggestion would be to first you fix the features you want to get and after that calculate the premium from a different insurer. You have to also remember the following points while you buy a bike insurance online.
Many bike riders are found in the street without valid insurance. The insurance lapsed and they are roaming forgetting that the last date of the validity of the bike insurance was already over. Many of the riders also feel lazy while renewing the insurance as it seems a waste of money to them. Though it is mandatory to have at least third party insurance to be on the street most riders do not see any offence of not having a valid insurance for some days.
Proper selection of IDV:
You already know what is IDV, right? When you are buying a new bike the market price is the IDV for the insurance. The IDV of an old bike is arrived according to the manufacturer’s price and depreciated value over the years. Some bike owners show the IDV as less amount as the less IDV charge lesser premium. The saving in premium may put you in more trouble. When you claim in case of an accident you will not get the full amount as you have set the lower IDV.
Claim on time:
Always try to intimate the insurer within 1-2 days of the accident or damage what has happened to your bike. Most of the insurer have a time window to report the accident. Otherwise, you may not get the claim if you are too late.
- No Claim Bonus:
If you don’t claim for a whole year from your insurer you will get no claim bonus in your renewal premium. You should select a proper no claim bonus while renewing your bike insurance. Selecting a wrong no claim bonus may cause trouble while claiming from the insurer.
Transferring of Bike Insurance:
If you buy a second-hand bike do remember of intimating the name transfer to the insurer. The insurance should be as per the RC book where you are the new owner of the bike. Most of the insurer has a window of 15 days to report the change of owner.
The correct filling of personal data, as well as hypothecation details, is mandatory for a bike insurance policy. Otherwise, you may face trouble while filing a claim. To avoid the issues, you should fill up all the details including hypothecation properly.
I am sure by now you know the importance of bike insurance and how it will save you from financial burden. Even if a third party bike insurance is enough to ride on the street, buy a comprehensive bike insurance which will protect you financially from all possible risk or damage due to accident or natural calamities.
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