As per the Motor Vehicles Act of 1988, all motorised vehicles plying on Indian roads must be covered under a valid insurance plan. The law mandates such vehicles to possess at least third-party insurance cover, failing which owners may face hefty fines or litigation. Thus, individuals planning to purchase a bike would first need to look for a decent bike insurance policy to cover the same.
However, blindly purchasing a two-wheeler insurance policy can do more harm than good. Vehicle owners must consider a few simple factors before choosing a suitable policy, which provides adequate coverage after accidents or road mishaps.
Factors to consider before acquiring 2-wheeler insurance policy
● Comprehensive or third-party coverage
While the third-party insurance cover is mandated by law, such policies often provide inadequate protection when it is time to file a claim. Third-party bike insurance policies offer financial assistance to the other party that is involved in a mishap with the policyholder’s vehicle. However, individuals cannot claim own-damage cover from these plans. Owners have to finance repairs for any damage suffered by the insured vehicle from their own pockets.
In a comprehensive bike insurance policy, the insurance provider offers financial assistance for own damage and third-party liabilities. Such a feature reduces expenses for a policyholder significantly. Additionally, one can claim benefits from comprehensive policies in case the bike undergoes damage due to floods, earthquakes or other such natural calamities.
● Insured declared value
Also known as IDV, insured declared value represents the current market value of an insured vehicle. It also corresponds to the maximum amount that a policyholder can claim from his/her motorcycle insurance policy. Thus, one should always opt for plans where the IDV is highest. In cases of loss or irreparable damage, one can claim this IDV amount easily and look for a replacement bike.
● Policy premium
The cost of a bike insurance policy depends on several factors, but it is always a crucial determinant when purchasing plans. The two-wheeler’s engine capacity is one of the most important factors that decide the cost of a policy. Also, the location is another important factor, with most providers categorising locations into Zones A, B and C. Zone A policies tend to be costlier, as these are mostly metropolitan cities. Zone C policies are more affordable.
● No claim bonus
If your bike insurance policy is too expensive, a no-claim bonus can help significantly. No –claim bonus is offered to policyholders when they are able to go through an entire policy term without filing any claims. These bonuses result in attractive premium discounts upon policy renewal. In some instances, these discounts can reduce premiums by almost 50%.
● Shop online
It is always advisable to look for two-wheeler insurance online. Doing so can essentially help save money by eliminating the intermediary. Offline purchase of policies involves dealing with an insurance agent who charges a commission beyond the price of such plans.
Besides saving money, purchasing a motor insurance policy online also allows customers to compare the available options and pick the best one.
● Look for riders
Riders are customisable protection that can tailor such policies to one’s liking. From zero-depreciation cover to personal accident cover for passengers, each of these riders can enhance the protection that a base policy provides. Whether it is a commercial bike insurance plan or a personal policy, the availability of riders can often reduce a vehicle owner’s expenses in the long run, even though it may push premiums up slightly.
Another factor to check before buying such insurance policies is the claim settlement ratio for a particular company. This figure shows whether filing a claim and receiving the monetary aid would involve a streamlined process or not. Individuals should avoid insurers where the claim settlement ratio is particularly low when compared to competitors.
Moreover, consider whether you want to buy a short-term policy (generally lasting a year) or a long-term one (up to 5 years for two-wheelers).