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Basic IRDAI Guidelines for Two-wheeler Insurance in India

19 July 2022, 2:36 PM

Two-wheelers are an important part of the lives of many. In fact, over the past years, the number of two-wheelers has grown rapidly. Central to a healthy and robust sector is the need to have an insurance regulatory body. This is where the Insurance Regulatory and Development Authority of India (IRDAI) steps in.  

Notably, the requirements set out by the IRDAI are mandatory. The rules also stipulate how two-wheeler insurance policyholders should behave and not just insurance companies.

Guidelines for Two-wheeler Insurance Covers

Comprehensive Insurance 

Comprehensive bike insurance has extensive coverage that includes additional responsibilities for the insurance company. Rules that should apply for this type of insurance include:

  • The insurance company should compensate the policyholder for the repair of their two-wheelers due to natural disasters or artificial disruptions. As long as the terms within the insurance policy are met, the compensation is due.
  • If policyholders are involved in a personal accident, the insurance company should compensate them as per their policy terms.
  • In case of theft or total loss, the insurer should pay the insured according to the policy.
  • If you meet the terms and conditions for add-on cover benefits, you will get your claim without any hassle.

Third-party Insurance Liability

Insurance companies are responsible for covering the policyholder against any losses towards a third party due to their two-wheelers. Some of the third party bike insurance rules that apply include:

  • The insurance company should cover the death or injuries of the third party resulting from an accident involving the insured two-wheeler.
  • Where there is damage to the property of a third party, the insurance company should compensate the concerned individual to the extent of the damage. The maximum cover amount for this is INR 7.5 lakh.

Standalone Own Damage Cover

The standalone own damage bike insurance covers damages caused to you and your two-wheeler resulting from an accident, man-made and natural disasters, theft, etc. Some of the norms regarding this cover include -

  • The policy does not cover third-party claims.
  • You can buy add-ons for this policy for an additional premium.
  • No-claim bonus in bike insurance is available for policyholders buying this policy.

Personal Accident Coverage

The policyholder can opt to add a bike insurance plan against personal accidents. Here personal accident cover entails a sum of INR 15 Lakh in the event of death or cases where the owner of the two-wheeler has suffered a total disability.

Further, there is also full compensation of the sum assured where there is loss of two limbs, death, loss of one eye and one limb, and loss of both eyesight. In cases where the owner of the two-wheeler has lost one limb or one eye, the compensation is 50% of the sum of the total assured.

Some New IRDAI Rules for Two-wheelers

  • There is a penalty of INR 5000 for riding a two-wheeler without a valid license.
  • A two-wheeler rider can face 6 months imprisonment or pay INR 1000 due to rash driving.
  • There is a penalty of INR 500-1000 due to non-compliance with rules.
  • A two-wheeler rider who has been disqualified but continues to ride the vehicle will face a penalty of INR 10000.
  • If the two-wheeler rider does not comply with rules not mentioned under the new rules, there is a fine of INR 500 for the first time and INR 1500 after that.

Exclusions of Two-wheeler Insurance Policies as Per IRDAI Norms

In some instances, the IRDAI can revoke some of the claims by policyholders. Some of the rules set out to protect the bike insurance companies against extortionary claims include:

Riders of Two-wheelers Lacking Valid Documents

As a policyholder, the insurance company expects you to have necessary documents that can be essential while raising a claim. Such documents include a valid driving license, a two-wheeler insurance policy, a Pollution Under Control (PUC) certificate, and your vehicle registration certificate. Without these documents, insurers can reject insurance claims.

Read more - Valid Pollution Under Control (PUC) Certificate is Mandatory to Renew Your Two Wheeler Insurance Policy

Damages Resulting from a Mechanical or Electrical Failure

Under two-wheeler insurance, electrical and mechanical damages are not covered. As such, the owner of the two-wheeler should be responsible for the associated costs.

Intentional Damage 

Where the owner of the insured two-wheeler intentionally destroys this/her two-wheeler, insurance companies are permitted by the IDRDAI to reject such claims. The intentions for the bike insurance claims are considered malicious and beyond the scope of responsibility by insured companies.

Wear and Tear

 It is normal for every vehicle to undergo wear and tear on its parts due to continuous use. Insurers won't cover the same.

Damages Due to Illegal Activities

If the owner of the two-rider raises a claim while performing an illegal activity, the IRDAI reserves the right to reject such a claim. For example, the damage has resulted on the two-wheeler due to the owner not following the land traffic rules.

Read more - Bike Insurance Claim Settlement - A Complete Guide

Misplaced Keys

There are cases where damage or theft can result from misplaced keys. In such instances, the insurer is not responsible for compensation for theft or robbery.

Intoxicated Rider

The Motor Vehicles Act, 1988, forbids riding a two-wheeler while intoxicated. The damages that result from such negligent cases are rejected under motor insurance and personal accidents.


The IRDAI ensures that both the bike insurance company and the policyholder operate on a fair platform. If you want to buy two-wheeler insurance, you can follow the guidelines mentioned for effective two-wheeler insurance.


1. Why does the insurance premium vary for different insurance covers?

Bike insurance companies calculate the insurance premium based on factors such as the insured declared value, make & model of the vehicle, the place of registration, and the type of policy. 

2. What are the different types of insurance covers?

The broad types of insurance cover are comprehensive bike insurance, third-party insurance, and standalone own damage cover.

3. Are there cases where the insurance company does not settle claims?

Yes. In cases of intoxication, illegality, intentional damage, normal wear and tear, and negligence, the IRDAI allows bike insurance companies to reject claims.

4. How can I settle a valid bike insurance claim?

 IRDAI helps maintain a fair system for both insurance companies and policyholders. Just report the covered incident immediately to your insurer. Let the surveyor come first before taking your two-wheeler to the garage. The surveyor prepares a report based on the findings at the site and sends it to the insurer for evaluation. If all goes well, the insurer will approve your claim. Subsequently, you can take your two-wheeler to the cashless garage for repairs. The company will pay the repair bill directly to the garage.

5. What does the third-party insurance liability cover?

The insurance company should cover the policyholder against property damage, injuries and death of the third party.

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