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IRDA Rules on Two Wheeler Insurance You Must Know

By Finserv MARKETS - Feb 5,2019
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IRDA Rules About Two Wheeler Insurance Policies You Must Know

The Insurance Regulatory and Development Authority of India (IRDA) is the prime regulatory body for the insurance sector in India. The main objective of the IRDA is to ensure that the interests of the policyholders are secured and they are not duped by any means.

Hence, the IRDA has set some guiding principles related to two wheeler insurance policies to ensure that motor insurance companies offer fair terms and conditions. You can also read IRDA rules when opting for a two wheeler policy online.

The two-wheelers that are included under the domain of the IRDA are motorcycles, scooters, and scooties. The main rules laid down by the IRDA include:

Non-eligibility for claim

The insured will not be eligible for claims in the following circumstances:

  • Loss of vehicle due to a home burglary
  • Damage to the vehicle in case of strikes/riots
  • Damage caused due to lightning, fire explosion, or inflammation
  • Damage caused due to a natural disaster such as earthquake, hurricane, flood, and typhoon, among others
  • Damage caused due to terrorist activity
  • Damage caused due to radioactivity or nuclear explosion
  • Damage caused due to the transit of vehicle by an external mode such as waterway, elevator, rail/road, or air

Depreciation rate

The rules pertaining to the depreciation rate or deduction rate in bike insurance plans as stated in the IRDA guidelines are:

  • 30% for components made of fibreglass
  • 50% for tires, batteries, tubes, and components made of nylon, rubber, and plastic
  • No depreciation rate is stated for glass parts.

There are some guidelines about the deduction rate related to painting, which is generally mentioned in your policy document.

Insured Declared Value

The Insured Declared Value (IDV) is decided based on the market value of the brand of the two-wheeler. IDV in bike insurance is an important factor in determining the premium amount for your two wheeler policy and the sum insured.

There is also a schedule of depreciation rate applicable for two-wheelers, and it depends upon the vehicle age.

There are also a few other rules with regard to the following:

  • If there is a liability of the third-party
  • Indemnity limits
  • The right to recovery
  • Various types of additional covers

Coverage for personal accident

The IRDA has an elaborate set of rules for bike insurance plans when it comes to providing coverage for any personal accidents. Some of the generic ones subject to the specific terms of an insurance policy are:

  • 100% compensation in the event of the death of the policyholder
  • 100% compensation in case both limbs are lost, or one eye and one limb is lost
  • 50% compensation if one limb or one eye is lost
  • 100% compensation in case of complete disability

Two wheeler insurance will not provide any compensation if the accident was due to self-harm, pre-existing physical defect, or driving under the influence of alcohol or drugs.

We hope that now that you are better acquainted with IRDA rules about two wheeler insurance policies in India, you will be able to make better-informed decisions while purchasing a policy. Why wait? Buy bike insurance online today!

Read our top blogs to know more about bike 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