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IRDAI Rules for Two-Wheeler Insurance Policies

Updated On Mar 16, 2021

Insurance Regulatory and Development Authority of India (IRDAI) governs the Indian insurance industry. The IRDAI regulations for two-wheeler insurance and other forms of insurance policies in the country are very strict, and these guidelines need to be complied with not only by insurance companies but also by policyholders.

IRDAI is the highest authority that regulates the laws and regulations pertaining to insurance. The implementation of IRDAI laws and regulations is meant to ensure seamless interaction between the insurance company and the buyers of the insurance policy. IRDAI has stipulated the rules that every bike insurance company and the policyholder should follow to attain fair practices when particular events associated with the insured two-wheeler take place.

IRDAI Rules for Two-Wheeler Insurance Policies

IRDAI Guidelines for Bike Insurance

Let's take a look at the IRDAI guidelines on plans for bike insurance.

Third-Party Liability: The financial liability of the policyholder against any third party who gets affected because of the insured's two-wheeler would be protected by the third-party liability policy. In the event of death or injuries to a third person caused by the insured’s bike, the insurance provider will offer monetary coverage. Considering the extent of the injuries sustained by the other party, the compensation amount would be determined. In the event of death, the compensation amount would be determined based on the deceased third-party's net worth. The third-party bike insurance policy provides coverage of up to Rs. 7.5 Lakh in case of third party property damage.

Comprehensive Bike Insurance: Under this policy, the insurance provider shall cover the costs of fixing or replacing the parts of the damaged bike along with third party liabilities. In the event of a robbery or complete loss, the insurer must pay compensation to the insured according to the policy terms. In the event of a man-made/natural calamity, the bike insurance provider must cover the monetary cost of fixing or replacing parts as per the policy provisions. The insurance company shall meet all the expenses specified in the additional insurance plan paid by the policyholder during the acquisition or extension of the insurance policy.

Standalone Own Damage Policy: In 2019 IRDAI allowed both old and new bike owners to buy a standalone damage insurance cover. Earlier, an own damage cover could only be purchased combined with a third-party liability insurance policy. An OD cover allows you to be compensated by your insurer in the event of an accident, fire, vandalism, theft, natural/man-made calamity or any other unfortunate event for all the damage or loss sustained by your vehicle.

Exclusions of Two-Wheeler Insurance

Exclusions from a two-wheeler insurance policy are cases in which the insurance provider is not obligated to settle the policyholder's claim. They are:

  1. Electrical/Mechanical Damage
  2. Damages occurred when the policyholder does not car valid documents (RC/insurance/Pollution certificate/driving license)
  3. Damages caused intentionally; due to normal wear and tear; due to war/terrorism
  4. Damages caused due to accidents/incidents beyond the geographical boundary
  5. Damages caused due to unlawful activities or not following rules/regulations

Also, Read

Two Wheeler Insurance Comparison - Importance, Steps and More

IRDAI Guidelines For Bike Insurance Policies In India

Bottom Line

As a two-wheeler insurance policyholder, you must know the above IRDAI guidelines. Apart from the above guidelines, you must also review the policy manual for the rules/regulation. It would help to familiarize yourself with the terms and conditions. It is therefore prudent to know about the laws and regulations of the protocol so that you are not taken for a ride by the policy issuer.

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.IRDAI Rules for Two-Wheeler Insurance Policies

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