Two Wheeler Insurance

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  • What is two wheeler insurance?

    Availing two-wheeler insurance is a must even before you take your vehicle out on the roads. A two-wheeler insurance policy safeguards you against any financial contingencies that may arise in case of accidents. Based on the type of insurance purchased, it would not only insure you against liabilities to any third party involved in case of an accident caused by the two-wheeler, but also give coverage for your vehicle and the owner.

    Accidents have more or less become the norm than the exception on Indian roads. Hence, the Indian Road Safety Act and Indian Motor Vehicles Act have made it mandatory for all new vehicles to carry an insurance cover before they run on the roads.

    Many buyers would choose to spend months, sometimes even years, to figure out their ideal bike or scooter. But when it comes to getting an insurance cover to protect them, their vehicles, and third parties, they seldom give much thought and rather opt for the easiest plan or lowest-premium policy available in the market.

    However, just like not every finger is the same, every bike or two-wheeler has its own specifications and requirements. Accordingly, the owner should choose the plan that best covers their needs.

    Types of two-wheeler insurance

    Before buying two-wheeler insurance, it is important to study the different types of cover offered on your vehicle. It’s also important to take a cover that will match yours and your two-wheeler’s needs. Two-wheeler insurance is divided into two types.

    Third party insurance cover: According to the Indian Road Safety Act and Indian Motor Vehicles Act, opting for this policy is mandatory before you run your vehicle on the road. It can be taken as a standalone policy or as part of a comprehensive two-wheeler insurance plan.

    Any damage to a third party’s property, or injury or death to the third party involved in the accident caused by the insured vehicle, is covered under this plan. This policy offers protection in situations when the third party is uninsured or underinsured.

    However, as the name suggests, this type of insurance does not cover damages to your own vehicle or the owner in case of an accident.

    Inclusions:

    • Any claims arising due to the death or injury caused to any third party by the insured vehicle.
    • Any damages caused to property of a third party due to accident involving the insured vehicle.

    Exclusions:

    • Third party policy does not include any damages or liabilities accruing to the insured vehicle and its owner.

    Comprehensive insurance plan: This policy not only covers death of, injury to, or damages to property of the third party, but also it covers the vehicle and its owner. Hence, it is called comprehensive insurance plan where you get a full coverage to cover most of the risks.

    Hence, apart from the third-party insurance, it also covers any damages to your two-wheeler due to accident, natural causes, theft, or other uncontrollable factors.

    Therefore, the premium under this cover is higher as it gives you full protection against many risks. The premium varies depending on the age, cubic capacity, IDV (Insured Declared Value) of the vehicle and the area of registration.

    Inclusions:

    • Damages to the property, harm to life, or bodily injury to any third party
    • Damages to the vehicle due to natural causes such as flood, lightning, earthquake, and cyclone
    • Damages to the vehicle due to accident, unnatural causes such as theft, riot, or during transit by road, rail, or air
    • Damages to the owner arising due to accident involving the insured vehicle

    Exclusions:

    • Depreciation of the vehicle
    • Driving while intoxicated
    • Electrical and mechanical breakdown
    • Common wear and tear of the vehicle
    • Use by an unauthorised person without a valid driving license

    Hence, you can choose either of the above two policies, but make sure you are well-insured to cover any damages arising in case of an accident involving your two-wheeler.

    What is the need for Two Wheeler Insurance?

    Two wheelers are the most convenient option for daily traveling in India. Public transport like buses may not have the frequency you desire, while other options like cabs, autorickshaws, or driving your own car may not be cost-effective. On the other hand, having your own two-wheeler is convenient in terms of maneuverability, mileage, and travel time.

    However, heavy congestion and perilous road conditions mean that road accidents are frequent and most of them are two-wheeler accidents. This necessitates having two-wheeler insurance in place, which can help recoup some or most of the damages incurred due to such accidents.

    What is Two-wheeler Insurance?

    Two-wheeler insurance protects the policyholder from any losses due to involvement of the insured two-wheeler in any road accidents, theft, robbery of the vehicle, and even in events like natural disasters based on the type of insurance purchased. If the rider is injured in a road accident with the insured two-wheeler, he or she can even get compensation amount for the medical treatment.

    Advantages of a Two-wheeler insurance policy

    In the recent past, the two-wheeler insurance scenario has drastically changed for the better. With loads of beneficial features attached to two-wheeler policies, insurance companies have also made the purchase of these policies quite smooth and free from many hassles.

    Here are some of the major benefits of two-wheeler insurance policies in India:
    • Quick and hassle-free policies: With the advent of the new technologies in the financial and banking world, buying insurance for your two-wheeler is now really easy. You immediately get the digital insurance policy document when bought online, and there is no need to wait for days to receive the policy papers.
    • Choose the cover according to your requirement: Along with the mandatory covers like protection against damages due to road accidents, you can include other extra protection for the pillion rider, spare parts of the vehicle, etc. Though these additional covers come at a higher premium, it is economical if you compare the expense of the higher premium with the price of the spare parts and accessories of two-wheelers.
    • Legal requirement: In India, it is mandatory for every two-wheeler rider to have a liability-only policy, which would cover any damage or loss to any third party or third party’s property in case of accidents.
    • No Claim Bonus: If you don’t claim against your insurance policy in the previous periods of insurance, the insurance companies in India reward you with a ’No Claim Bonus‘ or NCB to the rider or the policy holder as an incentive for safe driving.

    Two-wheeler insurances are specifically designed to cover any loss or damage of two-wheelers and any physical harm to the rider (insured person) or third parties in case of any unfortunate event. Mishaps like accidents, fire, or earthquake, and even unnatural events like robbery can happen at any point in time without your knowledge. A two-wheeler insurance plan covers your risks in such cases.

    Key benefits and features of two wheeler insurance

    Owning a two-wheeler can be one of the joyous moments of life but before you drive your new bike or scooter check for the insurance component. You should at least have third party insurance in place which is mandatory as per the Indian Motors Act. Of course you can enhance the protection component and make your two-wheeler insurance broader by opting for a comprehensive insurance plan. Here are some of the key benefits and features of two-wheeler insurance apart from the fact that it is a legal requirement.

    Ability to choose between insurance types: You can choose between mandatory third party insurance and comprehensive two-wheeler insurance. A comprehensive policy insures the bike against any damages and theft apart from third party liabilities. Insurers are also offering long term insurance plans which have a tenure period of up to 3 years making bike insurance long term and pocket friendly.

    Enhanced protection by various add-ons: Comprehensive two-wheeler insurance can be more even more protective by opting for various add-on covers. For example a zero depreciation cover, protection for the pillion rider or return to invoice cover can mean enhanced protection for your bike.

    Availability of a personal accident cover: All comprehensive two-wheeler insurance plans come with a personal accident cover for the rider for Rs. 1 Lakhs. You can make use of additional rider or add-on to enhance the personal accident cover for the pillion rider making your insurance doubly protective for you as well as your bike or scooter.

    Online instant policy: With a rise in the popularity of two-wheeler insurance more and more

    general insurance companies are offering insurance for two-wheelers. You can easily purchase an insurance plan for your bike or scooter online without having to worry about physical inspection of your two-wheeler. Insurers offer instant policy online making buying two-wheeler insurance fast, easy and convenient.

    Access to various discounts: Two wheeler insurance companies offer various discounts like a no claim bonus discount or discount on premiums for members of automobile associations or when using enhanced safety mechanisms like advanced anti theft devices for your bike.

    Benefits and features of two-wheeler insurance at a glance

    • 3rd party two wheeler insurance is mandatory as per the Indian Motors Act.
    • Opting for comprehensive two-wheeler insurance offers enhanced protection against damages and theft.
    • Comprehensive two-wheeler insurance offers a personal accident cover of Rs. 1 Lakhs for the driver.
    • The personal accident cover can be enhanced for the pillion rider by opting for appropriate insurance add-on.
    • You can opt for a long term insurance plan with policy tenure of up to 3 years locking premium and IDV for the policy term.
    • There are various discounts on offer when seeking a comprehensive insurance plan making insurance pocket friendly and easy.
    • Two-wheeler insurance can be purchased online with ease without worrying about physical inspection of the bike or scooter.
    • Two-wheeler insurance gives you and enhanced sense of security ensuring you to drive confidently.

    Top 10 two-wheeler insurance companiese

    It is mandatory to take an insurance policy for your two-wheeler to cover liabilities to third parties before you drive your vehicle on the roads in India. There are many insurance companies offering cover for two-wheelers, each offering a plethora of options, features, and add-ons.

    Here are the top 10 two-wheeler insurances companies offering both ‘liability only’ cover and comprehensive insurance plans.

    1. Bajaj Allianz: This insurance provider has received AAA rating from ICRA which recognises the company for its highest claim paying ability. It offers both ‘Liability Only’ and comprehensive plan. It offers both one-year and three-year coverage period. It also offers zero depreciation cover.

    Website: https://www.bajajallianz.com/

    2. TATA AIG Insurance: They offer different types of two-wheeler insurance policies depending on the needs and requirements of the owner. The company provides auto-secure two-wheeler package or long-term policy depending on the requirements. It also offers add-on covers for two wheelers.

    Website: https://www.tataaiginsurance.in/

    3. Reliance General Insurance: This company claims to give you up to 40% discount on two-wheeler (bike & scooter) insurance premium amount. They also have 159 network garages to use cashless facility. Their two-wheeler insurance starts at Rs 3 per day.

    Website: https://www.reliancegeneral.co.in

    4. The Oriental Insurance Co. Ltd: This government insurance company deals in various projects such as power plants, petrochemical, steel and chemical plants. Under two-wheeler insurance, it offers both Liability Only and Comprehensive Plan. It also offers various add-on covers on extra premium. It also offers coverage at shorter duration of less than a year.

    Website: https://orientalinsurance.org.in/

    5. The New India Assurance Co. Ltd: This company was founded by Sir Dorabji Tata in 1919 and provides a range of policies across all sectors. It offers insurance on all types of vehicles that ply on roads. It offers both the Liability Only and Comprehensive cover under two-wheeler insurance. It also offers add-on covers such as Nil Depreciation Cover for two-wheelers.

    Website: http://newindia.co.in/index.aspx

    6. SBI General Insurance: This is a much sought after insurance provider as it provides coverage to 56 cities pan India. The company offers long-term two-wheeler policy for two or three years with discounted premium. It offers both Liability Only and Comprehensive cover with bonus packages.

    Website: http://www.sbigeneral.in/SBIG/

    7. Bharti AXA: This insurance policy service provider offers a rather unique feature in its two-wheeler insurance policy. It offers a compulsory personal accident cover for owner-driver for both third-party and comprehensive plans. They have over 2500 cashless garages across India and 79 branches across India.

    Website: https://www.bharti-axagi.co.in/

    8. ICICI Lombard: This insurance company has a wide reach, providing coverage to business, personal, and project liabilities across rural as well as urban areas. It claims to protect more than 60 lakh two-wheelers every year. It provides personal accident cover of Rs 1 lakh to the rider while travelling, mounting, or dismounting the vehicle.

    Website: https://www.icicilombard.com/

    9. HDFC Ergo Insurance: It offers both the Liability Only and Comprehensive Plans, and offers various features on each of them. It claims 94% claim settlement ratio and one can buy insurance for up to three years in a single transaction.

    Website: https://www.hdfcergo.com/

    10. National Insurance Company Limited: It gives coverage limit of Rs 7.5 lakh on damages to third party. It also offers free 24*7 road side assistance and various add-on covers such as zero depreciation, medical, and accessories cover.

    Website: https://www.gibl.in/national-insurance/national-two-wheeler-insurance/

    There are other insurance providers that are equally good and offer their own set of features and add-ons. Study the market and choose the provider who suits your insurance needs the most.

    What is the right IDV (Insured Declared value) for my two-wheeler?

    You have purchased your favourite two-wheeler and planning to buy an insurance policy to cover any damages that may happen to third party or the owner or the vehicle itself. However, you get stuck at IDV – Insured Declared Value – for your two-wheeler when you plan to purchase an insurance policy?

    What is this IDV? - It is the maximum sum assured that the insurer will pay you as compensation in case of theft or damage of the vehicle beyond repair. In short, it’s the market value of the vehicle that you are entitled to receive if your vehicle is stolen or damaged beyond repair.

    How is it calculated? - It is calculated on the selling price of the two-wheeler in the showroom or the manufacturer’s listed selling price minus depreciation of the vehicle. However, the registration and insurance costs are excluded when calculating IDV. Besides, if any accessory is not factory-fitted, then a separate IDV is calculated for them to determine whether it will require an insurance cover too.

    It’s important to know the depreciation schedule at which the IDV will be calculated. Here they are:

    Age of two-wheelers
    >six months
    6-12 months
    1-2 years
    2-3 years
    3-4 years
    4-5 years
    Depreciation rates
    5%
    15%
    20%
    30%
    40%
    50%

    Please note that for two-wheelers above 5 years, the IDV is calculated based on a mutual agreement between the insurer and the insured. Surveyors, car dealers assess the vehicle’s condition to determine the IDV of old vehicles instead of following the regular depreciation charts.

    Why IDV and choosing the right value is important?

    IDV will give you the sum assured that the insurer will pay you if your vehicle is stolen or suffers total damage. Hence, selecting the right IDV is important. It is important to choose an IDV which is close to market value of the car.

    What if you select lower IDV?

    Lower IDV will charge you less premium. But if you deliberately choose a lower IDV than the market value so that you have to pay low premium, then be prepared to pay from your pocket if the accidental expenses on your vehicle is more than the sum assured on IDV. You should not fall for this trap in order to save a few hundred bucks on premium. Instead, choose the right IDV so that you are adequately compensated in case of theft or total damage of your two-wheeler.

    What if you select a higher IDV?

    You might be tempted to go for higher IDV thinking you will get a higher claim in case of theft or total loss of the vehicle. Also, you will be under the impression that a higher IDV will give you good returns if you plan to sell your vehicle. But that’s just a bubble because you need to remember that it is also the type of loss that will determine your claim amount even though the latter will be dependent on IDV.

    Hence, choosing the correct IDV is of utmost importance when buying a two-wheeler insurance policy so that you are adequately compensated in case of theft or total damage to your vehicle.

  • Q: What is a third party bike insurance?

    Q: What is comprehensive bike insurance?

    Q: Which insurance plan should I opt for third party or comprehensive?

    Q: Is theft covered in my two wheeler insurance plan?

    Q: How much money will I be paid if my bike is stolen?

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