Two Wheeler Insurance

Two Wheeler Insurance(Bike Insurance), as the name suggests is an insurance policy for covering your two wheeler against Accidents, Accidental Damage, Theft, Natural Calamities, Third Party Loss of Life/Property etc. The insured can opt for the coverage they require against which a premium is remitted to the insurer. The two wheeler insurance policy offers the policy holder a financial coverage in case any of the earlier stated perils were to occur. Without a valid two wheeler insurance policy in place, any individual have to bear the financial burden arising from their pockets which can be a strain on them.

IRDAI, after a recent directive from the Supreme Court, has made it mandatory for all two-wheeler owners in India to have a 5 year third-party policy for their vehicle mandatorily, right from the time of purchasing the vehicle. Vehicles plying without a valid insurance policy are liable to attract fines from the authorities. Hence, every owner of a vehicle has to have at least a mandatory third-party liability cover.

What is the Two Wheeler Insurance Cover about?

Here are some of the features of a two wheeler insurance policy:
  • Two Wheeler Insurance(Bike Insurance), is an insurance policy for covering your two wheeler against Accidents, Accidental Damage, Theft, Natural Calamities, Third Party Loss of Life/Property or Bodily Injury etc and covering any liability arising out of these state perils.
  • Two wheeler insurance like a motor insurance plan, is a mandatory cover required by the law. Every two wheeler owner must legally have atleast a Third Party policy covering their vehicle. Vehicles plying without a valid insurance policy are liable to attract fines from the authorities.
  • The vehicle owner will need to arrive at a defined IDV (Sum insured) with the insurance company, finalise if they want a TP or Comprehensive coverage and pay the applicable premium to ensure coverage.
  • Coverage is typically for Damages to Property/Life of a Third Party, Personal Accident Coverage for the Driver, Theft, Loss of Vehicle, Fire Damages, Natural Calamities. If a person chooses only a TP coverage, then the policy will be applicable only in the case of a Third Party damage to Property or Bodily Injury to the Third Party.
  • Hence having a Two Wheeler policy in place means Peach of Mind for the vehicle Owner, Financial Protection in case any of the perils occur, Legally above board since the mandatory cover is in place and Coverage in case of Personal Accident.
  • Today most insurance companies offer very aggressive pricing with discounts on Own Damage (OD) portion of the premium going upto to between 60% and 70% depending on the vehicle model and driver’s riding track record. Insurers have also started offering Long Term Insurance policies between 2-3 years.

Two Wheeler Insurance in India is of two types:

Third Party Liability Cover:
Third party liability insurance covers the damages caused by the insured, to an unrelated third party. In case of accidents, a third party liability insurance plan, covers all the damages that the insured driver has caused to the third party, their motor vehicle, its accessories and other property damage. It also covers bodily injuries to the third party. The policy however does not cover bodily injury to the insured.

Comprehensive Two Wheeler Insurance Plan:
This two wheeler insurance plan provides coverage for all the damages caused to the third party (bodily injury or property damage), as well as suffered by the insured to the two wheeler due to a covered peril. The damages caused may be due to human acts (while driving) or a natural calamity. It covers the damages to the insured’s vehicle, third-party legal liability, theft and personal accident coverage.

What are the factors that impact the Two Wheeler Insurance premium?

The factors that influence the premiums include:
  • Vehicle type: The type of your two-wheeler – manufacturer, model, class, cubic capacity, and fuel type will determine your premium. If your motorcycle has a higher cubic capacity or a larger displacement engine, you will have to pay a higher premium. If you have a motorsport bike, your premium will be relatively higher.
  • Type of coverage: This depends on whether you would like to buy a Third-party cover which is the most basic cover, or a Comprehensive Cover. The premiums for a Comprehensive coverage will be significantly higher than a TP cover, but the coverage is also much more wider.
  • No Claim Bonus : The NCB enjoyed by the owner will also impact he premium. More claim free years of driving means higher NCB Bonus and hence lower premiums.
  • Geographical area: The area you reside in will determine your two-wheeler premium. If you are staying in a rural area, your premiums will be comparatively lesser.

What are some of the Add On Covers with your Comprehensive Two Wheeler Insurance Policy?

Add-on covers in two wheeler insurance (like car insurance) provide extra protection to the policyholder, over and above the coverage offered by a comprehensive two wheeler insurance policy. Some of the popular add-on covers in two wheeler insurance being offered by the insurers today are Zero depreciation cover, Personal Accident cover for the pillion rider, and 24x7 Roadside Assistance.

Personal Accident Cover for Pillion Rider
This cover provides personal accident coverage for pillion riders in the event of the pillion rider’s partial or permanent disability or death while riding the insured vehicle. The amount that can be claimed would depend on the type and the extent of injury suffered by the pillion rider at the time. It is a cover that should be taken if the insured travels with a pillion rider regularly.

Roadside Assistance
This cover would entitle the insured to 24X7 roadside assistance in the event of a breakdown or a mechanical failure of the insured two wheeler. Among the services offered are Emergency Assistance, Towing facility in the event of a breakdown, Minor Repairs at the site of the accident/breakdown, Accommodation benefit due to the vehicle being unfit to ride, etc.

Zero Depreciation Cover
This is also known as Depreciation Reimbursement or Bumper to Bumper cover. The Insurer will pay you the amount of depreciation on account of wear and tear which is deducted on the value of parts replaced under own damage claim, lodged under the own damage section of the policy. They will pay for the first 2 claims reported to them during the Period of insurance.

Accessories Cover:
This add on would provide coverage to any electrical or non-electrical accessories added to the two wheeler, resulting in the insurance company covering the cost of replacing/repairing them.

Exclusions under the Two Wheeler Insurance Policy:

The exclusions in a Two Wheeler policy include:
  • Driving without a valid license: The two wheeler insurance policy requires that the rider at the time of the accident have a valid driving license. Claims will be repudiated if the two wheeler was being ridden by an individual without a valid driving license.
  • Driving under influence of alcohol: Driving under the influence of narcotics, drugs or alcohol and meeting with an accident due to inebriation is not covered under the policy. Hence no claim due to damage to the vehicle due to an accident while riding under the influence will be payable.
  • Burglary: In case there are damages to, or a loss of accessories, due to burglary, robbery or housebreaking, the two wheeler insurance policy will not cover the costs of repairs or replacements unless the whole vehicle is stolen at the same time.
  • Wear and tear: Two wheeler insurance does not offer cover damages due to wear and tear, general ageing, electrical or mechanical failure and breakdown.
  • Other exclusions: Two wheeler insurance also excludes claims arising out of any contractual liability, damage to tubes and tyres unless they are damaged during an accident, using the two wheeler for reasons that are not legal, damage caused to the two wheeler when it is being used outside the geographical boundaries of India, and damages attributable to mutiny, nuclear risks, war, etc.

Long Term Two Wheeler Insurance:

Most Insurance companies now offer long term two wheeler insurance plans that have tenure of 2-3 years. This is ideal for both the vehicle owner and the insurer since they need not worry about renewal of insurance for up to 3 years. The advantages of the Long Term Policy include:
  • Saves TP Premium over 2-3 years – with almost an annual increase on TP premium, by buying a Long Term policy and paying premium upfront for 2-3 years, this TP premium increase will not be applicable
  • Avoid Yearly Renewal – the owner need not have to track the renewal dates every year of the two wheeler in a long term policy.
  • NCB Protection for the entire period – if the insured has eligibility for a 25% NCB, the same will be applicable on the premium for the entire duration of the cover (2-3 years). Even if there is a claim on one of the policy years, the applicable NCB will fall to the lower slab, but not become NIL.
  • Long Term Coverage – A single insurance policy is issued for the entire period of 2-3 years and hence the owner can ride around stress free knowing that the coverage is in place for the duration of the policy.
  • Higher OD Discounts – given that the insured is committing to a longer period of insurance and the same is being paid upfront, the insurers are offering attractive discounts upfront to ensure competitive premiums for the long term cover.

Two Wheeler Insurance FAQ's:

A two wheeler insurance policy is valid for 1 year, 2 years or 3 years depending on the tenure of the policy opted for by the insured. If it is a long term policy, a single policy document is issued for the entire duration of the cover.
  • Type of 2 wheeler - manufacturer, model, class, cubic capacity, and fuel type
  • Age of the vehicle
  • Geographical location of Registration
  • Duration of the policy – Long Term or One Year policy
  • NCB of the Driver
  • Add On covers opted for by the insured
A Cashless Claim can be made available to the insured, provided the vehicle is repaired at a garage which is part of the network of the insurance company. The insurance company will inspect the vehicle and give a work order for repair to the garage and settle the claim directly with them. The insured will only need to pay the deductible and other non covered expenses to the garage while taking delivery.

A Reimbursement Claim is one where the policy holder has opted for a garage which is not part of the insurer's network of garages. Here, the policy holder will be required to make payment to the garage for the cost of repairs done to the vehicle, which will be later reimbursed to the policy holder by the insurance provider, on submission of the original receipts or bills.
The policy will continue to remain in force even if the insured moves to another location, due to personal or business reasons. You will however need to update your insurance provider with relating to the revised address, contact details, etc. All major metro cities like Mumbai, Pune, Delhi, Hyderabad, Bangalore, Kolkata, Ahmedabad, and Chennai are categorized as Zone A cities. Rest of the cities are categorized under Zone B. So, in case you are moving from a Zone B to a Zone A city, then your insurance premium is likely to increase.
If your two wheeler has been stolen or lost, first get in touch with the insurance company inform them of the loss. Ensure then that an FIR is filed with the police immediately. Along with the FIR, and other documents (driving license, RC book of the vehicle), file a claim with the insurer at the earliest. Then, the police will provide the final ‘non-traceable’ report. Once, the claim is accepted, you will have to move the RC of the vehicle in favour of the insurer, who will settle the claim.
Yes, this is called an endorsement and insurance providers allow policy holders to endorse additional accessories which may have been fitted later on for an additional premium. All you need to do is send your insurance provider a written request for the same and also share the details of the accessories which you have gotten fitted along with their value.
First of all the two wheeler will need to be inspected if there is a break in insurance due to the lapse or expiry of the policy. Additionally, if you have a No Claim Bonus that has not yet been availed 90 days before the expiry of policy, you could still lose the benefit. However the good news is that the policy can be renewed post inspection and remittance of applicable premium.
If you lose your insurance policy, you should instantly inform your insurance company. You will also have to file an FIR with the nearest police station. Next, you have to apply for a duplicate bike insurance policy with the insurer by paying the applicable fees for a duplicate policy. Next, you will be required to sign an indemnity bond for obtaining a supplicate policy, and this will have the policy number and the full name of the policyholder. You may also be recommended to circulate an advertisement in a newspaper which states that you have lost or misplaced your two-wheeler insurance documents, which can be shared with your insurance company. Once your application is accepted, the insurer will evaluate your case thoroughly and then provide you with a duplicate insurance policy after proper verification. On this new bike insurance policy, the word ‘DUPLICATE’ will be mentioned in bold.
The compulsory deductible amount is the mandatory amount the policyholder pays on the approval of every claim. It is typically a standard amount that will be mentioned in your policy document and your voluntary deductible will be determined according to your bike’s cubic capacity (CC). This is not dependent on the garage repair bill. Compulsory Deductible in two wheeler insurance:
  • For two wheelers with engine capacity less than 350cc: Rs. 50/-
  • For two wheelers with engine capacity above 350cc: Rs. 100/-
  • A voluntary deductible is the surplus part of your two-wheeler insurance claim that will not be covered by your insurer. As the name suggests, the insured opts for a deductible which is higher than the compulsory deductible to reduce the premium payable at the time of buying the policy. In a two wheeler insurance, it is the volunteered amount that the vehicle owner agrees to pay at the time of claim repairs and against this gets a discount on the own damage premium.
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