IRDAI Rules for Your Two-Wheeler Insurance Policy

In India, all insurance companies are bound to follow the rules and regulations set by the Insurance Regulatory and Development Authority of India (IRDAI). These rules and regulations aim to keep the relationship between the insurance provider and the policyholder as smooth as possible. The IRDAI rules vary depending on the type of two-wheeler insurance policy. The rules for various types of insurance coverage are as follows:

The IRDAI rules for a third-party liability two-wheeler insurance policy

IRDAI has set certain rules and regulations regarding third-party liability two-wheeler insurance. It provides coverage under certain circumstances that are given below.

• If the insured bike causes death or injury to the third party, the insurer will compensate the third party. 

• The compensation amount will be determined by the court based on the severity of the third-party injury.

• The cost of damage to a third-party property will be covered by the insurer. The court will decide the amount of compensation based on the extent of loss.

   

The IRDAI rules for a comprehensive two-wheeler insurance policy:

According to the IRDAI regulations, comprehensive two-wheeler insurance provides coverage for all the conditions mentioned under third-party liability, plus additional coverage in the following conditions. 

• If the insured has opted for a personal accident add-on in two-wheeler insurance, the insurer will compensate the owner or driver of the covered vehicle. 

• In the event of theft or total loss, the insurance company would compensate the insured according to the two-wheeler insurance policy terms

• According to the two-wheeler insurance online terms and conditions, the insurer shall cover the cost of replacing or repairing the components of a damaged two-wheeler. 

• In the event of a natural or man-made disaster, the insurer should pay for the repair or replacement of components in line with the two-wheeler insurance policy provisions.

If a policyholder buys additional coverage when purchasing or renewing a policy, the insurer is responsible for the costs specified under additional coverages.

Comprehensive two-wheeler insurance policy exclusions

As per the IRDAI rules, the comprehensive policy will not provide coverage in the following circumstances:

• If there is consequential loss, regular wear and tear, age-related damage, and mechanical failure, then the comprehensive policy will not provide coverage for the same.

• The insurer will not compensate you if the accessories are lost or stolen without any damage to the insured vehicle. 

• If the motorist does not have a valid driver's licence or is found to have been riding under the influence of drugs or alcohol, the insurer will not pay any compensation in the event of an accident. Also, it is mandatory to have motor insurance while driving on the Indian roads.

• If the damage occurs outside the geographical area mentioned in the policy, the insurance company will not provide any coverage.

• The insurer will not compensate you if your bike has been damaged because of engaging in unlawful activities or racing.

The insurer is not liable for any claims resulting from damage caused by the rider's failure to follow the traffic rules and regulations.

The IRDAI rules for the personal accident cover

• Sum Insured: If the owner of the insured two-wheeler dies or becomes totally disabled, the personal accident cover provides a sum assured of Rs 15 lakh.

• Coverage: The coverage amount differs with the extent of bodily damage. In the unfortunate event of loss of both limbs, loss of both eyesight, loss of one limb and one eye, or death, the insurer will provide 100% compensation of the sum assured. Whereas if the insured bike driver or owner has lost one eye or one limb, the insurer will provide 50% of the sum insured. 

The IRDAI rules for depreciation

Depreciation plays a crucial role in determining the two-wheeler insurance premium and its coverage. The IRDAI has set the rate of depreciation to promote healthy competition and to protect policyholders' interests. 

• As per the rules, there is 30% depreciation for fibreglass components.

• Nylon, rubber, and plastic components as well as batteries, tyres, and tube parts, all depreciate at 50%.

• Glass parts of your two-wheeler are not subject to depreciation, whereas metal parts are depreciated as per the provisions of two-wheeler insurance.

Apart from these, there is also a specified slab for depreciation concerning the age of the vehicle. This slab is as follows: 

• Up to 6 months, the applicable depreciation is 5%.

• For 6-12 months, the applicable depreciation is 15%. 

• For 1-2 years, the rate of depreciation is 20%.

• For 2-3 years, the applicable depreciation is 30%.

• For 3-4 years, the depreciation is 40%.

• For 4-5 years, the applicable depreciation is 50%. 

To conclude

If you have recently purchased a bike and plan to buy two-wheeler insurance online, you must understand the IRDAI's two-wheeler insurance rules and regulations. Knowing the rules can assist you in selecting the best two-wheeler insurance policy for your bike and will also save you money on policy premiums.