Why Should You Buy A Bike Insurance Policy
Updated On Oct 27, 2020
Bike Insurance is type of financial protection for your two wheeler.
Insurance policies for two-wheelers provide protection to two-wheelers, the third party and/or the driver depending on the policy. In India, insurance policies for two-wheelers follow the guidelines of the Insurance Regulatory Development Authority of India (IRDAI) and are governed by the Motor Vehicles Act of 1988. Insurance for two-wheelers falls with the genre of motor insurance and the category of general insurance.
The types of Insurance available for two-wheelers can be categorised into three types based on the coverage they provide. (1) Third Party Insurance Policy, (2) Standalone Own-Damage Insurance Policy (3) Comprehensive Insurance Policy
What are the Benefits of Having Two-Wheeler Insurance?
Following are the benefits of purchasing two-wheeler insurance:
- Protects Two-Wheeler in case of an accident: In case of an accident, an own-damage or comprehensive policy will cover the compensation for damages to your bike or scooter.
- Protect Two-Wheeler in Case of a Man-Made or Natural Disaster: In the event of a disaster, your standalone own-damage policy or comprehensive cover will also compensate for your two-wheeler’s losses.
- Protection from Theft: In this case, the own-damage or comprehensive covers will provide significant compensation for your two-wheeler.
- Protection from Third Party Liabilities: This type of insurance is mandatory, but also provides protection in case of an unfortunate event to the third party.
- Peace of Mind: Having an insurance policy for your two-wheeler protects you from the uncertainties of life, giving you stability.
What are Different Types of Two-Wheeler Insurance?
There are three types of insurance policies based on the coverage they provide:
- Third Party Insurance Policies: This type of policies provide coverage for third party liabilities in case of a mishap including bodily injuries, death and property damage. The limit for third party property damage for two-wheeler insurance is Rs. 1 lakh. Having this type of insurance is mandatory according to the Indian Motor Tariff. Riding a two-wheeler without this insurance can lead to a fine of Rs. 2,000 and/ or imprisonment for up to 3 months.
- Standalone Own-Damage Policies: Own-damage policies are not essential but are a prudent choice to have along with a third-party cover. It compensated for the damages caused to the first party’s two-wheeler if an unfortunate event occurs.
- Comprehensive Insurance Policy: For coverage of both third-party liabilities and own damage a comprehensive bike policy is the most hassle-free choice.
What is Not Covered By Two Wheeler Insurance?
The following are aspects not covered by two-wheeler insurance:
- Illegal Driving: Driving without a license, while under the influence of alcohol, drugs or any other intoxicant, underage driving.
- Non-Accidental Damage: Damages that occur naturally over the course of time, such as wear and tear, mechanical or electric failures, breakdowns, consequential damages.
- Damage Outside Geographical Limit: Damages incurred outside the geographical limits prescribed by the policy.
Important Terms to Remember When Purchasing Two-Wheeler Insurance
These are significant terms to remember when buying your two-wheeler insurance:
- Insured Declared Value (IDV): Is the factor used by insurance companies to work out the maximum limit of compensation they are willing to provide to a policyholder in case of a mishap for the two-wheeler. It is calculated based on market value and is subject to depreciation, i.e., its value decreases over time.
- No Claim Bonus (NCB): NCB in bike insurance is awarded to the policyholder after every claim-free year, with the claim increasing with every consecutive claim-free year up to 50%. However, it is only applicable for own-damage covers. To avail this reward, the policyholder must also be regular in renewing their policies and before 90 days of its expiry.
- Add-ons: Certain aspects that are not covered in the insurance policy are available for purchase as add-ons to the policy and have an additional premium. Bike add-ons cover provide flexibility to plans. Some popular add-ons are engine cover, tyre-cover and zero-depreciation.
To conclude, there are three types of two-wheeler insurance, third party insurance policies, standalone own-damage insurance policies and comprehensive policies. Purchasing insurance for your two-wheeler comes with many benefits. It gives protection to the two-wheeler in case of mishaps, calamities and theft. Moreover, being insured will bring you peace of mind and the process of purchasing one has never been easier.
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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.