It is best to buy a bike insurance policy whose coverage starts as soon as you buy it.
Purchasing bike insurance involves understanding of all possible factors and terms regarding it. Rather than buying bike insurance just because it is mandatory by law, it is wise to make an informed decision while buying one so that you are fully covered.
Riding your brand-new bike is bliss, and the excitement associated with it is unmatched. But with the ownership of a bike comes the responsibility to ride it safely. Following traffic rules, wearing a helmet, and being alert are some of the basic precautionary and road safety measures that need to be followed. Furthermore, insuring your motorbike is a way to secure yourself against potential financial losses. Having bike insurance is also a mandatory requirement in India. Read ahead to know some crucial details that you should check before buying a bike insurance policy.
Types of Bike Insurance Policies
The first thing to determine while buying a bike insurance policy is whether to opt for a third-party liability cover or to go for comprehensive bike insurance. A third-party liability cover is mandatory as per the Motor Insurance Act, 1988. It is a policy that is designed to safeguard the financial interest of third-parties. Damages incurred to third-party person or property is covered under this type of policy.
In addition to a third-party cover, a comprehensive bike insurance policy covers the policyholder, policyholder’s own vehicle, and various other coverages as chosen by the policyholder. Even though the premium is higher for a comprehensive insurance policy, it covers multiple risks and perils. Therefore, it is recommended to select a value-for-money comprehensive insurance policy after comparing various plans available in the market.
Factors affecting bike insurance premium
The following factors will influence the premium rates of bike insurance:
1.Make and model of the motorbike
2.The engine capacity
3.Type of insurance cover (third-party or comprehensive)
4.City of vehicle registration
5.Insured Declared Value
6.Safety devices installed
7.Purpose of the vehicle (whether personal or commercial use)
8.Automobile association membership
9.Annual premium or long-term premium
10.Bonus accumulated on previous policy or discount offered by the insurance provider
11.Online/offline purchase mode
Things to Consider Before Buying Bike Insurance
The IDV factor: Insured Declared Value (IDV) is the current market value of your motorbike. The insurance provider will decide the IDV as per the market value after considering the depreciation. The depreciation of motorbike will be computed as per the below table:
|Age of the vehicle||Applicable Depreciation|
|Less than 6 months old||5%|
|Above 6 months but less than a year||15%|
|Above 1 year but less than 2 years||20%|
|Above 2 years but less than 3 years||30%|
|Above 3 years but less than 4 years||40%|
|Above 4 years but less than 5 years||50%|
Going for voluntary deductible: There are usually two types of deductibles – Voluntary deductibles and compulsory deductibles. The voluntary deductible is applicable over and above the compulsory deductible. Policyholders have an option to select voluntary deductibles to lower the premium amount. However, it is important to note that it will also decrease the receivable claim amount because part of the expenses will be borne by the policyholder in case of damages.
No claim bonus: If you have not raised any claim during a particular policy year, you are eligible to get a no claim bonus in the subsequent policy year while renewing your bike insurance policy. The NCB increases with each claim-free year, and it ranges between 10% to 50% (depending upon the company policy).
In case you make a claim under your bike insurance policy in the third-year after the purchase of a vehicle, then you will not get any no claim bonus in the fourth policy year. It will then become applicable again from the fifth year, starting with the lowest % of the NCB for having a claim-free year.
Add-on covers: Apart from the basic coverage offered by various bike insurance policies, it is crucial to understand the additional coverages. You can enhance your bike insurance cover by availing various add-ons such as no claim bonus cover, roadside assistance, zero depreciation, personal accident cover, pillion rider cover, to name a few.
Exclusions of a bike insurance policy: Your bike insurance claim can be rejected under the following circumstances:
Exclusion of third-party plan:
1.Any damages done to your own vehicle will not be covered in a third-party bike insurance policy . You need to bear the expenses of repairs from your pocket.
2.The insurance company provides compensation for the claims made by third-party, you have to pay from your pocket to get your vehicle repaired.
3.Any damages done to your vehicle due to theft or natural disaster will not be covered under the policy. It is important to check the policy document to understand the policy coverage in a detailed manner.
Exclusions of comprehensive bike insurance policy:
1.If you are involved in an accident without a valid driver’s license, your claim may be rejected by the insurance company.
2.If you found riding the vehicle under the influence of alcohol, the coverage will not be provided against any type of damages.
3.You will be not be covered when you ride your bike outside the geographical boundaries specified in the insurance policy. The cover is usually valid throughout the nation, and any damages that happen outside the country will not be covered under this type of policy.
Bike insurance policies are available at an affordable price. There are numerous policies offered by India's reputed general insurance companies. A bike insurance policy can be bought as per the type, model, and make. The insurance provider will assess various kinds of risk factors associated with the motorbike, the owner (or rider), and registration of the vehicle. It is recommended to buy a comprehensive bike insurance policy for a brand-new vehicle to cover all types of possible risks. Just as a well-oiled engine ensures a smooth ride, with a bike insurance policy that fits your requirements, you are not only protecting yourself but a third-party and property, your pillion rider, and the vehicle itself.
Recommended Link: Why Third Party Two-Wheeler Insurance?