After the purchase of a motorcycle, two-wheeler insurance is the next thing that is needed; it is also mandatory by law to have one. Scooter or bike insurance is mostly viewed as a formality by many riders and hence not much thought is given to the policy while buying one. Understanding policy wordings and getting to know the terminologies is also considered a tedious task by some. These often lead to committing mistakes when buying a policy, resulting in major setbacks later during the claim process. However, if you keep certain points in mind, you can avoid many pitfalls when obtaining a two-wheeler insurance plan.
Types of two-wheeler insurance policies
There are mainly two types of two-wheeler insurance offered for bike owners in India-
- Third-party bike insurance: This is the most basic and legally mandatory form of insurance. It covers injuries or damages caused to a third party (person or property) due to your vehicle. This does not cover the damages to your vehicle.
- Comprehensive insurance: This type of policy includes third-party liability as well as own damage cover for damages to your bike due to accidents, natural calamities, theft and fire. This ensures wider coverage and financial stability.
A standalone own-damage cover is also available. This can be purchased separately along with a third-party plan, allowing more flexibility in choosing own-damage coverage from any preferred insurer.
How to choose the right two-wheeler insurance policy?
Choosing the right policy depends on your bike’s usage and riding location, and your financial priorities. Here are a few key considerations:
- Assess your needs: If you use your bike frequently, especially in congested or high-risk areas, a comprehensive policy with suitable add-ons is advisable.
- Compare premiums and coverage: Don't fall for the lowest premium. Use online platforms to compare policy features, benefits and claim ratios of different insurers.
- Look for cashless garage networks: A wide network of cashless garages ensures faster, hassle-free repairs.
- Check for add-ons: Based on your bike’s age and condition, you can opt for various add-on covers, purchased separately, such as NCB and engine protection covers.
Myths around two-wheeler insurance that need to be busted
Many misconceptions surround bike insurance, leading to wrong decisions. Here are some myths and realities related to motor insurance:
- Myth: Third-party bike insurance is enough to stay safe on the road.
- Truth: It is mandatory, but it does not protect your own vehicle.
- Myth: All insurance policies are the same.
- Truth: Coverage, services, add-ons,- and claim experiences vary significantly across insurers.
- Myth: Claiming insurance means losing NCB entirely.
- Truth: If you have an NCB protector, you can keep your bonus even after a claim.
- Myth: EVs do not need insurance.
- Truth: Electric vehicles also require the same legal and financial protection as regular bikes.
Mistakes made while buying two-wheeler insurance for electric vehicles (EVs)
Considering buying a new bike insurance for your EV? Steer clear of these mistakes to get the maximum value for your money-
1. Not declaring battery type for EVs
If you own an electric two-wheeler, it is crucial to accurately declare the battery type- whether it is lithium-ion, lead-acid or another variant. The battery is one of the most expensive components in an EV, and different types come with different risks and coverage needs. Not disclosing this properly can lead to claim complications or insufficient coverage.
2. Buying cheap insurance
The mistake people often make is that they consider only the cost as the primary factor for insurance selection. A policy with a cheaper premium might seem more enticing from the savings perspective, but that can be folly. Cheaper policies might not have the appropriate coverage for your bike and can result in huge losses when your two-wheeler gets into an accident.
3. Due diligence not done
Buying a policy in haste can lead to you purchasing a plan on the expensive side. Before opting for a particular policy, it is best to research and explore all the options available. This exercise will not only help you to be aware of all the plans available in the market but will also enable you to get more benefits at the most competitive price.
4. Not reading policy papers
This is a widespread mistake that is being committed by the majority of policyholders. It is imperative for anyone thinking of buying the policy to read the policy wordings in detail. There is also the need to go through the ‘exclusions’ list as it might so happen that the coverage you seek may fall under this. If that turns out to be the case then the benefit you’re seeking in the policy will not be covered. Hence, it is always better to fully understand the pros and cons of the policy before committing to it.
5. Not claiming NCB
NCB or No Claim Bonus is the reward that an insurance company gives you for not making a claim during the policy tenure. This usually comes in the form of a discount on the policy premium for the coming year.
You are eligible for the NCB when you are buying a new policy or renewing the existing plan. It is a good idea to make use of the NCB benefit if you are opting for a new plan, as it can get you a good discount.
6. Ignoring IDV (Insured Declared Value)
IDV is the maximum amount your insurer will pay if your bike is stolen or completely damaged. You may be inclined to reduce the IDV for a lower premium, but this also means that in case of a total loss, the payout will be lower than the actual value of the vehicle. Similarly, inflating the IDV will lead to paying more than the ideal premium. It is important to declare the right IDV based on your bike’s current market value to strike the right balance between premium and coverage.
Government regulations & mandatory two-wheeler insurance
According to Indian law, it is a must for all two-wheelers to have at least third-party bike insurance. This ensures that victims of accidents caused by your bike are compensated. Driving without valid insurance can lead to:
- Hefty fines
- Legal liability
- Bike registration suspension
Additionally, new two-wheelers must be insured with a long-term third-party cover (typically for 5 years) as per IRDAI norms. Regular renewals, timely updates to policy documents and adherence to legal norms are essential to avoid complications.
Conclusion
Two-wheeler insurance is your financial guardrail against various risks. Whether you are insuring a conventional bike or a high-tech electric scooter, understanding your policy options, avoiding common mistakes and staying informed about regulations ensures long-term protection and peace of mind. Do not let myths, misjudgements or missed renewals cost you dearly. Make a smart move today, compare, customise and choose a bike insurance policy that truly fits your needs.
FAQs
1. Can I change my third-party policy to comprehensive two-wheeler insurance?
Yes, you can upgrade during renewal or even mid-term with the insurer's approval.
2. Is insurance mandatory for electric scooters?
Yes, insurance is mandatory for e-scooters. Both third-party and comprehensive insurance policies are available for EVs.
3. What happens if my policy expires?
If your policy remains expired for a long period, your vehicle will remain unprotected against risks and you lose the accumulated NCB. Renew within the grace period to avoid this.
4. Can I transfer bike insurance to a new owner?
Yes. When selling your bike, you must transfer the insurance policy along with ownership.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the Insurance industry and products. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.