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A Beginner’s Guide to Two Wheeler Insurance

By Finserv MARKETS - Jan 23,2019
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guide to two wheeler insurance.

In India, it is mandated by law that all the two-wheeler owners must at least have a third-party liability cover, but unfortunately, not everyone does. Many people see the policy as an unnecessary and burdensome expense. This is primarily because people fail to acknowledge or understand the benefits of having one. A two wheeler insurance policy provides coverage to your vehicle in the event of a natural disaster, theft and more, and also offers protection in the form of third-party liability.

Here’s a guide to help you know more about bike insurance in India.

Types of Two Wheeler Insurance

There are two types of insurance policies available in the market today for two wheelers:

  • A liability only cover, or a third-party bike insurance policy is a plan that is mandated by law. It provides coverage in the case of injury or death of an individual, or damage to the vehicle or property of an individual sometimes referred to as third-party which covers the cost of damage caused by your vehicle to a third party. A third party could be another vehicle or another person.
  • A comprehensive insurance policy will cover you for any loss/damage done to you and your vehicle by natural or man-made causes. It also provides personal accident cover & third party legal liability.

How is the Insurance Premium Calculated?

Features such as cubic capacity (CC) of your two-wheeler, coverage opted, cover chosen for accessories and city of purchase plays an important role when it comes to determining the bike insurance premium amount. There are some insurers that also offer add-on covers with the insurance plan itself. However, for add-on covers, you are required to pay an extra amount as a part of your premium.

To fully understand how bike insurance premium is calculated, you should take a look at the factors that influence the premium amount.

Factors that determine your Two Wheeler Insurance premium:

Insured Declared Value (IDV): IDV is the highest sum payable by the insurance company in case of theft or total loss of your vehicle. The IDV of your vehicle is calculated at the time of buying your cover and is calculated basis the brand, age and model of your two-wheeler. It is very important to learn what is IDV in bike insurance to determine your premium amount.

Add-on Covers: Your premium increases with the amount of add-on covers that you include with your base policy

Cubic Capacity: Your premium amount is directly proportional to the capacity of your engine. Your premium will increase with an increase in cubic capacity of your engine.

Insurance Renewal

For you to maintain continuity, it is very important to regularly renew your bike insurance. There are some insurance companies that offer you a one-year insurance policy, while others might offer a long term one for your two-wheeler. At the time of your two wheeler insurance policy renewal ensure that you get your two-wheeler inspected. Also, if your policy lapses, you won’t be able to renew it but will have to buy a new one.

The Benefits of No-Claim Bonus (NCB)

This is applicable only if you have not made any claim during a policy year. It is a discount that is offered on your premium. NCB is a concept that has been introduced to reward safe driving. As a policyholder, you can avail up to 50% NCB with Finserv MARKETS.

What happens if you sell your Vehicle?

Another good thing about two wheeler insurance is that if you sell your vehicle, you can transfer your insurance policy as well. The new vehicle owner would have to notify the insurance company about the purchase and give all the necessary information in order to accurately transfer the insurance policy.

How do you file a Claim?

In case of a mishap, you would have to contact your insurance company to start the claim process. You will be asked to submit the claim form along with necessary documentation like FIR, driving license, cost of repairs etc. Once the damage is inspected by a surveyor, you will then receive compensation from the insurance company.

If you are planning to buy bike insurance online, you can take a look at various third-party comparison sites to compare the premium costs and coverage and decide which one suits you the best.

Read our top blogs to know more about two wheeler insurance in India:

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522