What Is Bike Insurance Meaning, Types & Coverage
Bike insurance, technically called a two-wheeler insurance, is an ideal tool to safeguard yourself against the financial losses which may arise due to an unfortunate event like a road accident involving the two-wheeler. According to the Indian Motor Tariff, 2002 it is mandatory for every bike owner to have at least a third party bike insurance cover.
What Are The Types of Bike Insurance
On the basis of coverage, there are 3 types of bike insurance plans as explained below:
1. Third Party Bike Insurance Plan: A third party bike insurance plan also known as liability only bike insurance plan is the most basic of all bike insurance covers. It insures a policyholder against only but all third party liabilities be it bodily injuries/death of a third party or property damage incurred by a third party. Thus, it provides no insurance cover for damages incurred by the insured’s bike.
2. Comprehensive Bike Insurance Plan: A comprehensive bike insurance cover provides for all the shortcomings of a third party bike insurance cover. Also known as a package bike insurance policy, a comprehensive bike insurance plan provides coverage for all types of damages incurred by the insured’s bike in an unfortunate event. Thus, it provides coverage for both third party liabilities as well as own damages suffered by the insured’s bike.
<3. Standalone Own Damage (OD) Bike Insurance Plan: As the name suggests, a standalone own damage bike insurance plan provides insurance cover only for own damages incurred by the insured’s bike in a mishap. Thus, it does not provide coverage for third party liabilities. Thus, if you purchase a standalone own-damage cover, you need to purchase a third party cover as well to meet the legal requirements established by the Indian Motor Tariff, 2002.
Coverage Provided by Different Bike Insurance Policies
Type of Loss | Third Party Plan | Comprehensive Plan | Standalone OD Plan |
Bodily injuries of third party | ✔️ | ✔️ | ❌ |
Death of third party | ✔️ | ✔️ | ❌ |
Property damage of third party | ✔️ | ✔️ | ❌ |
Own Damage of Insured’s Bike | ❌ | ✔️ | ✔️ |
Theft of Insured’s Bike | ❌ | ✔️ | ✔️ |
What does Own-Damage in Bike Insurance Provide Coverage For?
Following is the list of events in which an insurance company provides coverage for the own damage incurred by the insured’s car under a comprehensive and standalone own damage covers:
- Road Accident
- Natural Calamities - Floods, Earthquakes, Cyclones, etc.
- Fire/Explosion
- Riots, Strikes
- Terrorist Activities
- Damage During Travel By Air, Rail, Road, Water.
What are Add-On Covers?
Add-Covers are available with standalone own-damage covers and comprehensive plans. They are additional purchases that you can make to further strengthen your standard insurance plan. The add-on covers come at an extra cost that is added to your overall premium and can come in handy in moments of crisis. Moreover, as they are not compulsory, it allows you to pick and choose, giving the insurance policy the flexibility to fit individual needs. Here are some useful add-on covers and their functions:
- Zero Depreciation Cover: With this type of cover, when the policyholder makes a claim, the insurance company will not factor in the depreciation rate of the car when deciding the claim amount for the car. Though a zero depreciation cover is a bit expensive, it proves extremely useful in moments of crisis.
- Roadside Assistance Cover: This cover provides the policyholder with assistance while on road. In case of breakdown, it provides towing services, and taxi service, they can even make a booking for you at the nearest hotel. They can also organise for a mechanic to go to your location and take a look at your car if needed. This is especially recommended for those who have long daily commutes or travel long distances for road trips etc. Click here to know more.
- Passenger Cover: When an accident occurs the rider of the two-wheeler is automatically protected by the personal accident cover that is compulsory. However, it does not compensate the pillion rider, who is the owner-driver’s responsibility in case of a mishap. With this cover, you can ensure the pillion rider is also protected. Click here to know more about Passenger Cover.
- Consumables Cover: There are certain two-wheeler parts or components that can be used only a single time, such as nuts, bolts, coolant, etc. Though small, at times, replacing them can add up to high costs. With a consumables cover, this cost would be taken care of.
- Engine Protect Cover: With a standard insurance policy the damage to the engine of a two-wheeler is not compensated for. However, with the engine protected coveryou can also claim for such damages. This comes especially handy for those who live in flood-prone areas.
Return to Invoice Cover: In cases of total damage, the usual practice of insurance companies is to compensate according to the IDV taking into consideration the depreciation rate. However, if you have the return to invoice cover, the compensation paid is the same as the cost of the two-wheeler on its invoice.
Which Bike Insurance Plan Should I Buy?
The answer to this question entirely depends upon the requirements and budget of the bike owner. While a third party bike insurance cover is a mandatory requirement, a comprehensive bike insurance cover is a recommended plan as it provides complete insurance coverage for your much-loved bike.
Here are some factors which are crucial to consider while choosing the right bike insurance policy:
- Policy Coverage
It is vital to confirm the coverage of a policy before opting it to buy. Based on the coverage, you can pick different three types of bike insurance policies such as third party bike insurance policy, standalone own-damage bike insurance policy and comprehensive bike insurance policy. Hence, select the type of policy based on your budget and requirement as the price of the policy also varies with its coverage.
- Add-on Cover
The bike insurance add-on covers are the additional benefits which you can opt for by paying additional charges to extend your policy. Some of the popular bike insurance add-on covers include zero-depreciation cover, personal accident cover, passenger cover, roadside assistance cover, and so on. It is quite significant for the policyholders to check the add-on covers which are offered by the insurance company which can help you in different scenarios.
- Premium Amount
When it comes to comparing and selecting the bike insurance plan, the most important thing comes out to be its amount of premium. A lower amount premium is not always beneficial but sometimes it could be false as well. Hence, a bike insurance seeker must go for the coverage to finalise a premium amount. The premium amount should be affordable and as per the policy coverage.
- Available Discounts
Most of the bike insurance companies offer discounts and similar offers on their bike insurance plans. It is quite important to have a look at how many discounts and offers the company is providing. The more discounts will be there, the more beneficial it will be for you. Hence, you must not forget to opt for such options at the time of buying insurance policy, otherwise, you may have to wait for a policy year to add them in your plan.
- Terms and Conditions
The majority of points are conveyed to the bike insurance policyholders in the policy agreement. As a wise customer, it is your duty to check the terms and conditions to understand what all is provided under the bike insurance policy by your insurance company. It is also required to check the exclusions in the policy to avoid any kind of disappointment at the time of application of claim settlement.
Undoubtedly, bikes or any other kind of two-wheelers are the most affordable choice for Indian commuters, but it also comes with its own set of risks as they are highly prone to road accidents.
With the increase of two-wheelers on the road and the soaring chances of accidents, it has become extremely crucial to have good bike insurance which not only helps you in overcoming any financial loss resulting from bike accidental damage but also protects the other person who has been hurt in any way with an involvement of your bike.
Here’s a detailed and comprehensive guide on bike insurance, kinds of bike insurance policies, its features and benefits, which one you should consider as per your needs and requirements and much more.
What Is Bike Insurance?
Bike insurance is a contract between the bike owner and the insurance company, where the latter covers any damage caused to the bike due to an accident, theft, or collision. The bike insurance plays a pivotal role in safeguarding financial and legal obligations, which might arise in case of any unfortunate accident, natural disaster such as fire, landslide or man-made causes such as theft, riots, vandalism and so on.
Bike insurance policies cover all sorts of two-wheelers, such as motorcycles, scooters, moped bikes and electric bikes as well. As per the Indian Motor Tariff, 2002, it is mandatory for every bike owner to have at least a third-party bike insurance policy.
Why Is Bike Insurance Necessary?
It can prove to be extremely fatal and risky, if you own a bike and you do not have an insurance policy for it. By just paying a nominal amount for an insurance policy, one can claim quite a reasonable amount of money in the hour of need. Below are the reasons which states clearly that why it is necessary for any vehicle owner to have a bike insurance policy:
Safeguards you from Legal Fines: In India, it is illegal to drive any bike without having a valid third-party bike insurance policy. Therefore, it is mandatory to have a proper bike insurance in place which saves you from paying hefty legal fines.
Coverage for Natural and Man-Made Disasters: Insurance policies cover damage to the bike caused by natural calamities such as landslides, floods, earthquake, fire and so on. With proper insurance in place, one can easily make a claim under these unforeseen situations.
Coverage Against Theft: Theft of your bike can cause a major concern and the financial implications of losing the bike can be worse. But if your bike is insured, then you don’t have to worry much, as immediately when you report the theft of your bike, the insurance company is bound to cover the cost of replacing your vehicle.
Coverage Against Third-Party Liabilities: A third-party bike insurance which is mandatory, provides financial protection to your bike against any damages or injuries caused to a third party, with an involvement of your vehicle in an accident.
Coverage Against Own Damages: One of the most important reasons to have a bike insurance policy, is that it aids financial help to the insured bike owner for any cost incurred on repair work of damaged bikes due to accidents or any man-made or natural calamities.
Key Features And Benefits Of Bike Insurance
360-Degree Protection: A bike insurance policy provides 360-degree financial and legal protection to you, your vehicle and third-party person or property, in case of the occurrence of any accident or mishap. Having a bike insurance also covers you against loss and damage arising due to theft, strike or war. While third-party insurance is mandatory, one can opt for comprehensive coverage policy to get coverage for own damages caused to your bike also.
Cashless Claim: This is one of the main benefits of a bike insurance policy. An insured bike owner can easily apply for a cashless claim, in case of any damage caused to their bike due to an accident or any mishap. All they need to get their damaged vehicle at any of the network garages, where the bill will be directly settled between the garage owner and the insurance company.
No Claim Bonus: No-claim bonus is a kind of discount which insurance companies provide for making no claim in the preceding years. Bike insurance companies provide up to 50% NCB benefit on the insurance premium which is indeed a great benefit for insured. The NCB discount can be even carried further at the time of renewal of your policy.
Personal Accident Cover: Personal accidental coverage is one of the benefits which the insured receives as soon as they insure themselves under a bike insurance policy. This cover provides coverage to the bike rider against any bodily injuries or death arising due to an accident. It is crucial to have a personal accident cover especially when you drive, but if you do not have a separate PA cover, you can definitely get it along at the time of buying a bike insurance for you.
Coverage for Long-term: Bike insurance companies have launched several long-term insurance policies which can cover your bike up to a maximum of three years. The benefit of being covered in a long-term policy is that the premium is fixed for the next three years and there will be no hassle of yearly renewal of policy. Many insurance companies also provide discounts on premium for option these long tenure bike insurance policies.
Different Types Of Bike Insurance Policies?
While buying a bike insurance, you can select from the various kinds of insurance policies based on your coverage requirement. The bike insurance in India is broadly categorized into three major kinds, which are:
Third-Party Insurance
In India, as per The Motor Vehicles Act, 1988, it is mandatory to own a third-party insurance to ride a bike on Indian roads. Third-party insurance covers all injuries, disabilities or death caused to the third-party due to an accident from the insured’s bike. However, the insured’s bike damages or theft is not covered under this plan. The third-party premiums have been already decided by the insurance regulator of India, IRDAI, which are as follows for FY 2022-2023::
Comprehensive Insurance
This kind of insurance policy provides an all-rounder protection to the bike owner. It covers you, your bike and also third-party person or property from any financial damages caused. It also includes a personal accident cover for the owner-driver. One must go for comprehensive insurance to ensure full safety for your bike.
However, due to extensive coverage, this kind of insurance is more expensive than the third-party bike insurance policy. At the same time, in comprehensive insurance, the insured has the full liberty of adding optional riders such as zero depreciation cover, engine protection, key replacement and so on at an extra premium cost.
Standalone Own-Damage (OD)
This kind of bike insurance covers damages caused to your own vehicle, in the unfortunate event of accident or mishap. In this plan, the insured receives the financial protection for their own insured bike. This policy does not cover any damages caused to third-party persons or property.
The insured has an option to buy a third-party policy and own-damage policy either from the same insurance company or from different ones. An insured can also enhance the scope of coverage of an own-damage insurance policy by purchasing add-on covers.
Difference Between Third-Party Insurance And Comprehensive Insurance Policy
Add-On Covers For Bike Insurance Policy
Zero Depreciation Cover: if a bike owner purchases this cover along with the policy, then they don’t have to pay for the cost of depreciation of your vehicle and thus you would be able to claim for a bigger amount.
Road Assistance: This add-on is useful in providing any kind of emergency help which a bike owner might require in case of a mechanical breakdown of their bike in the middle of a road. With this cover, one gets the services such as fixing bike issues on the spot, provides free drop to reach your destination, covers the cost of getting the bike to the garage and so on.
Consumables Cover: While making the claims, generally the cost of damaged nuts, bolts and other consumables are not covered under basic insurance policy. However, this add-on helps you to cover the expenses of consumables damaged due to an accident.
Engine Protection Or Gear Box Protection Cover: We all know that replacing important bike parts such as engine and gearbox can be very expensive, but when you apply for its protection add-on cover, the same thing can be replaced at zero cost. However, the cost of the engine and gearbox would be only covered, if it has been damaged due to accident or any unfortunate mishap.
Return to Invoice Cover: This cover allows the bike owner to avail the full invoice price of their bike, if the bike has been damaged totally or in case of theft.
Tyre Protection Cover: Tyre is an important component of a bike or any two-wheeler. Any wear and tear of tyre due to accidental damage gets covered, if the bike owner has opted for tyre protection cover.
Above-mentioned add-ons are the most useful ones which can be easily clubbed with the comprehensive bike insurance policy with an aim to make the coverage most beneficial. The other add-ons which are also available such as key protection cover, NCB protection, any loss of personal belongings and passenger assistance cover.
Bike Insurance Claim Settlement Process
The bike owner can raise the claim either via cashless claim or by reimbursement claim process. The claim settlement process for both cashless and reimbursement is different from each other. Let’s understand one by one the claim settlement process for filing claims under both the options.
Steps to File Cashless Claims
- Step 1: Notify your insurance company by contacting them directly. You can use their mentioned toll-free number or visit their website.
- Step 2: Now, register your claim and always save the claim reference number for future use.
- Step 3: The insurance company assigns a surveyor or a claim inspector who is responsible for assessing the damage incurred to your vehicle. This assessment will be later submitted by the surveyor to the insurance company.
- Step 4: Once the insurance company approves the claim report, your bike will be transferred to the nearest network garage for repair work.
- Step 5: After analyzing the documents submitted by you, the insurance company will settle the bill directly with the garage and thus the claim will be settled via cashless process.
Step To File Reimbursement Claims:
- Step 1: Notify your insurance company by contacting them directly. You can use their mentioned toll-free number or visit their website.
- Step 2: Now, register your claim and always save the claim reference number for future use.
- Step 3: Take your damaged bike to the nearest garage and get the bike repaired. Settle the final bill and pay directly to the garage.
- Step 4: Submit the respective original bills, necessary documents and claim settlement form to the insurance company to initiate the process of claim.
- Step 5: Once the claim is approved, the insurance company will compensate you and thus the claim amount will be reimbursed.
Documents Required to File A Bike Insurance Claim
- Signed and filled claim settlement form.
- Copy of an insurance policy.
- Copy of license.
- Copy of Registration Certificate of your bike.
- FIR copy is required in case of a huge accident or theft.
- Original invoice/bills of repair.
How To Choose The Right Bike Insurance Policy?
Keep the below-mentioned points in mind while choosing the right bike insurance policy for your vehicle.
- Assess your coverage requirement and select that policy which fits in your budget.
- Know your bike’s cubic capacity and then accordingly select the policy.
- Understand in detail about every add-on or riders available and then extend your policy coverage.
- Know the current insured declared value (IDV) of your bike. IDV is the maximum sum insured which is fixed at the time of buying a bike insurance policy. This amount will be paid by the insurance provider in case of total loss or theft of your bike.
- Research about the insurance company online and select the reputed insurer.
- Compare the premium quotes online and read the policy terms and conditions online, as per your own convenience.
- Always consider reading customer feedback and reviews online.
How To Calculate Bike Insurance Premium?
Bike insurance premium can be easily calculated via a premium calculator online tool. This calculator helps the policyholder to get the premium quotes in seconds, just by adding details such as the bike’s model and make, registered location, year of purchase, and regional transport office (RTO) location, policy type.
Calculating premium before buying a bike insurance policy always gives you a fair idea of different premium quotes from different insurers and which further helps in making the right decision.
However, details which are needed to calculate the premium for used and new bikes are entirely different. Let’s figure out what details are required for new as well as used bikes.
>Details Needed For Calculating Premium For A New Bike:
- Name and year of manufacturer
- Model of bike
- Variant of bike
- Registered Location
Details Needed For Calculating Premium For A Used Bike:
- Make/model and year of purchasing bike.
- Fuel type.
- Current policy details
- Registered state and city
- Details of NCB.
- Past record or details of claim reports.
Calculating Insurance Premium For A New/Used Bike
Post filling the details of new or used vehicle, here is how an insured can calculate their bike insurance premium via insurance calculator:
- Enter the details mentioned above with respect to new/used vehicles.
- Select and add the optional riders which you wish to buy.
- Apply for NCB, if applicable.
- Click on “get price/get premium quotes”.
- The insurance calculator will show the premium cost.
As the bike premium calculator will provide you the estimated premium amount for your selected bike insurance plan, now it is totally up to the bike owner to decide the most suitable option that fits their budget and requirements perfectly.
Factors Affecting Bike Insurance Premium
Type of Insurance Policy Selected: Generally, every insurance company offers two kinds of policies such as third-party and the other one is comprehensive bike insurance policy. The third-party bike insurance premium is very nominal as it only covers third party liabilities. However, the premium is more for the comprehensive type of policy as the bike owner will get other added benefits and extensive coverage as compared to simple and basic third-party insurance policy.
Engine Capacity And Other Such Factors: Different two-wheelers have different specifications and thus the premium cost also varies depending upon the type and condition of the bike. For instance, higher the cubic capacity of the engine, higher will be the insurance premium amount. Other than engine capacity, the bike’s age, model, location, fuel type also affects the premium amount.
Insured Declared Value (IDV) of Bike: This is one of the crucial factors which has a huge impact on the price of the bike insurance premium. IDV refers to the current price or value of the two-wheeler based on its brand, use and other functionality. Suppose if the vehicle is old, the IDV would be less, if IDV would be less, then the premium charged would be also less.
Add-on Covers: Add-on covers help in enhancing the coverage but it also increases your premium amount. As every add-on you choose is tagged along with a slight premium cost. So be wise and prudent while selecting your add-ons, as they don’t come for free!
Extra Accessories or Modifications: The extra accessories and modifications look fancy and beautiful, but it also increases your premium cost. As a basic insurance policy does not cover these accessories and thus you might need to pay extra premium for the coverage of expensive modifications done on your bike.
How To Buy Or Renew Bike Insurance Online?
Documents Required To Buy a Bike Insurance Online
- Identity Proof: Passport, driving license, PAN card.
- Address Proof: Voter ID, Passport, Aadhar Card.
- Copy of Registration Certificate of your bike.
- Registration number of your bike.
- Copy of your recent passport size photograph.
- Old policy number, if any.
