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Basic IRDAI Guideline for Two-Wheeler Insurance in India

Wish

Written by Udit Varshney

Updated Jul 23, 2021

Looking to purchase two-wheeler insurance? Make sure to check the IRDAI gudelines to make an informed decision.

The Insurance Regulatory and Development Authority of India or the IRDAI is an autonomous body that regulates the insurance space in India. Every insurance company in India has to frame their insurance policies in accordance with the rules and regulations that are laid down by the IRDAI. It is no different for two-wheeler insurance in India. In this article we will talk about the basic rules that have been framed by the IRDAI for two-wheeler insurance that are significant for both the insurance provider and the insurance holder.

Basic IRDAI Guideline for Two-Wheeler Insurance in India

What are the IRDAI Guidelines for Two-Wheeler Insurance Covers in India?

Following are some of the basic guidelines set down by the IRDAI to achieve fair practices in dealings of bike insurance:

  • Third-Party Insurance

     This type of insurance policy will take care of only the third party liabilities in case of a mishap and is mandatory for every two-wheeler driving on Indian roads. According to the IRDAI guidelines:

(1) the insurance provider must give compensation to the third party in case there is a death or injury caused by the insured two-wheeler.

 (2) The amount of compensation offered for the damage will depend on the degree of injury of the third party. In case of death, the compensation is decided upon by the net worth of the third party. 

(3) If the third party’s property is damaged due to the mishap, the insurance provider must bear the cost. However, the compensation amount will be decided according to the extent of the damage but for two-wheeler insurance will not cross Rs 1 Lakh.

  • Standalone Own-Damage Insurance and Comprehensive Insurance

    Standalone own-damage insurance takes care of own-damage costs only. Comprehensive insurance plans, on the other hand, take care of both own-damage costs and third party insurance under a single premium. Moreover, there is an optional personal accident cover that is available for insurance holders. According to the IRDAI guidelines:

(1)The insurance provider should give compensation to the policyholder under the personal accident add-on’s mentioned conditions.

(2) The insurance provider should bear the cost of replacing the spare parts and repairing of the two-wheeler according to the terms and conditions of the policy.

(3)The insurance provider must bear the cost of the aspects covered by the add-on covers purchased by the policyholder.

(4) In case of total loss the insurance holder must be compensated with the IDV amount as mentioned in the policy terms and conditions.

(5) In case of a man-made calamity or natural disaster the insurance provider must bear the cost of the monetary losses of the insurance holder by compensating the cost of repair and/or replacement of the components of the two-wheeler.

Takeaway

In a nutshell, the above-mentioned guidelines must be followed by the insurance companies when dealing with their insurance holders. Having basic knowledge about two-wheeler insurance is extremely important. Hence, we have put together more similar articles on two-wheeler insurance. When purchasing two-wheeler insurance makes sure to also do it online. It allows you to compare the different two-wheeler insurance companies, the quotes they offer and their network of cashless garages within minutes and all from the comfort of your home.

Read More: 

Bike insurance add-on covers explained

Documents Required for Bike/Two-Wheeler Insurance Renewal    

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

Wish

Written by Udit Varshney

Udit has built B2C segments across various industries and has had significant contributions to the insurance sector. Read More

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