In India, a bike insurance policy is a very important aspect of two-wheeler ownership. When you are riding a bike on a public road, you are required to always carry four main documents with you all the time. This includes your driving license, your bike registration certificate, pollution under control certificate (unless your bike is a battery electric vehicle, in which case PUCC is not needed) and a valid insurance policy for your bike. As per the Motor Vehicles Act, any person who is found to be riding a two-wheeler without at least a valid third-party bike insurance policy should be subject to a challan of 2000 Rs. on the first instance and for subsequent cases, this will be raised to INR 4000.
Further, in case a person is found to be habitually driving their vehicle without valid insurance, they will be liable for the seizure of the vehicle and cancellation of their driving license and vehicle registration. If the court also deems fit, they may even sentence a person known to regularly flout this law to jail time! The law requires you to hold valid insurance and you are free to buy bike insurance online or offline. It is best to always have a printed copy of your insurance policy in the vehicle and one copy at home.
Bike Insurance Policies of Different Kinds
- Third Party cover: This is the most basic kind of bike insurance that you can buy for your vehicle. It is meant to fulfill the legal requirement of having insurance and therefore it is regulated by the Insurance Regulatory and Development Authority of India. This policy does not provide you with any protection for your own vehicle. Instead, the purpose of this policy is to ensure that in case your bike is in an accident and the legal compensation is pronounced, it is the insurance company which pays the compensation.
This ensures two things – first, it ensures that the victim gets their compensation in time. Second, it does not lead to undue financial stress on a person who already has undergone a stressful experience and has to pay too much money to get their vehicle fixed from their own money. The good thing about this policy is that it is cheap and ensures that you do not get challans. The bad thing is that this insurance does not cover any damage to your own bike.
- Own Damage cover: This is a policy that is meant to cover any damage to your own bike, hence the name Own Damage Cover. If you are riding your bike and have an accident or if your bike is stolen or if your bike is damaged in any kind of natural calamity, this damage bike insurance will cover the cost of repairs.
The pricing of this policy is decided upon the vehicle’s estimated value as per the rules and regulations of the insurance company. This estimated value of the car is known as the Insured Declared Value of the vehicle. It can be adjusted by increasing or lowering the premium. However there is a limitation of this cover plan – it does not offer any legal protection so if you only have your own damage cover and are caught by traffic police, you will have to pay the challan.
- Comprehensive cover policy: This is the most popular kind of vehicle insurance that people prefer when they buy a bike insurance online policy. It is a combination of the third-party policy cover as well as its own damage cover. Over and above this, you can also supercharge your bike insurance by purchasing different types of policy add-ons which come at a very nominal price but bring in really useful features. In a comprehensive bike insurance policy, you will be charged the third-party cover prices as per government regulations. The own damage cover component will be charged as per the insured declared value which is given when you buy your bike insurance online and then there is the cost of add-ons that you choose as per your own preference. The best part about a comprehensive cover policy is that it overcomes the limitations of both the third-party cover and own-damage cover because it clubs both together.
Single Year vs Long Term Policy
Traditionally all the policies used to be sold on an annual basis. When you purchased a bike from the showroom, you purchased insurance for the first year and after that, you were expected to renew the policies on an annual basis. This was working well but the number of people not renewing their policy after a few years was too high. To resolve this situation, the concept of long-term insurance was developed. Now when you buy a new bike, you are required to buy five years of third-party bike insurance online or from the dealer along with the first year of own-damage cover. After the first year, the bike owner can purchase their own damage cover annually for four years. After that, you get the option to either get a one-year comprehensive policy or even three years comprehensive policy. Long-term policy means you do not have to worry about annual renewals and financially it works out to be a better deal.
Choosing the Best Insurance for Your Bike.
Different parameters should be kept in mind when you try to identify which is the best policy for you. Some of them are –
- Age of your bike: If less than 5 years – just buy your own damage cover.
- Budget: If your budget is too low, at least buy a third-party cover.
- Habitual aspects: Do you tend to miss deadlines? Buy a long-term policy so you do not have to worry about annual renewals.
- Future plans: Are you in the process of selling your bike? Buy third-party cover because uninsured bikes cannot be sold.
At the end of the day, people have different requirements at different times so the best approach is to identify your needs and requirements, based on the possible usage of the two-wheeler. Then look for bike insurance online, compare the plans and buy the one that best suits your budget and requirements.
Disclaimer – The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.