How to Choose the Best Bike Insurance
While choosing a new bike, you spend hours researching different brands and comparing features. You consider the look, engine power, fuel efficiency and even accessories before even buying the bike. You compare the on-road price across various online platforms. But is it the same while buying bike insurance? Do you invest as much time while choosing your insurer provider? After all, bike’s insurance is the only thing that protects your bike and you, in the case of emergencies.
Why Should You Buy Two Wheeler Insurance?
According to the data released by the Ministry of Road Transportation, one in four road accidents reported the presence of a two-wheeler. This figure indicates the need for financial protection, in case of an accident.
The Motor Vehicles Act of 1988 has made Third Party(TP) insurance mandatory for all two-wheeler owners. Riding without valid Third Party insurance is a punishable offence with imprisonment. However, Third Party insurance only covers damage or losses incurred by a third party vehicle or person. This plan is insufficient especially in case of road accidents. To keep yourself completely secure, it is best to opt for a Comprehensive Cover. In case of an accident, Comprehensive cover compensates for the repair or replacement of damaged parts of the bike. A Comprehensive Cover also helps you stay covered against damage caused to your vehicle due to fire, theft, riots, earthquake, etc.
Let’s look at the important criteria you should be considering while choosing your Comprehensive bike insurance:
How to Choose the Best Two-wheeler Insurance?
Before buying, it is important to evaluate your needs, research the products available in the market, and compare quotes from different insurance providers. Here are some points you need to keep in mind while choosing the best bike insurance:
1. Focus on the Coverage:
While buying two-wheeler insurance, your primary focus should be on the coverage offered by the insurer against the premium amount. Third-party liability cover is cheaper than Comprehensive one. But the coverage and benefits of Comprehensive Cover are worth the extra amount. It is easy to get distracted by the price and choose the cheapest plan. However, at the time of choosing, look for a policy that can be useful in all kinds of emergencies. After all, that is what the premium is for.
2. Understand Insurance Declared Value (IDV):
Insurance Declared Value (or IDV) is the current market value of your bike. Insurance Declared Value is equivalent to the fixed maximum sum insured at the time of buying the policy. It is the amount to be paid by the insurer, in case of loss or theft of your bike. IDV is one of the most important factors that determine the premium of two-wheeler insurance. IDV decreases as the age of the vehicle increases. This has a direct effect on the premium amount for your bike also.
Therefore, newer models of the same have higher two-wheeler insurance premiums than their older counterparts.
*PRO-TIP: Choose a plan where IDV is the highest. This will help you retain the value of your bike over a long period of time.
3. Know the Correct Make and Variant of Your Bike:
Another important factor that determines the premium amount is the engine capacity (in CC). Therefore, it is important to stay informed about your bike’s engine capacity at the time of choosing bike insurance. If the engine capacity of your two-wheeler is high, your premium will also likely be on the higher end. At the time of entering the details, make sure you enter the correct make, model, and variant of your bike. For example: If you have a Honda Activa 100 CC, ‘make’ refers to the brand i.e Honda, ‘model’ refers to the product i.e Activa while ‘variant’ will be ‘100 CC’.
4. Select the Plan with the Best Premium Outcome:
Finally, the premium amount is the most crucial parameter for deciding the bike insurance cover. Premium amount refers to the amount you need to pay the insurers to avail an insurance cover. Your premium amount depends on the type of coverage. Third-Party Liability cover has a lower premium since it only covers third party damages and losses. However, when you consider the risks, a Comprehensive Cover is the recommended choice. A Comprehensive Cover provides all-round coverage at a slightly higher premium. Although the ultimate decision comes down to the amount to be paid, remember, a two-wheeler insurance policy is an investment. Therefore, it is equally important to consider the benefits, IDV, exclusions, and add-on options at the time of buying.
5. Extend your Coverage with Add-on Covers:
Add-ons help to improve the scope of coverage for your bike’s protection. So, make it a point to compare the add-ons offered by different insurers. Some of the most popular add-ons available for two-wheelers are Zero Depreciation cover, Personal Accident Cover (PAC) for pillion riders, Daily Allowance Benefit, etc.
*PRO-TIP: Add-ons Covers are only available in the case of Comprehensive Cover. Remember to also compare the additional premium payable per add-on cover.
6. Compare Quotes from Different Insurers:
Before buying, it is important to compare quotes from different insurers. You can visit an online insurance aggregator to get all the information you need in one place. Shortlist the insurance providers based on the benefits, Insured Declared Value (IDV), available add-ons options, and claim settlement ratio. It is also important to understand the exclusions and claim settlement process.
7. Check Incurred Claim Ratio of the Insurance Company:
Before checking out, review the claim settlement record of the insurance provider. A company with a high rate of claim settlement indicates that the company settles the maximum number of claims. Once, you have checked the claim settlement record, understand the process of filing for a claim. Most insurers have moved their claim settlement process online. This means you can file for a claim easily by sharing a video or even images. Apart from the process, check for the turn-around-time (TAT) of the company for claims and other matters. Investing in an insurance provider with a high claim settlement ratio and low TAT ensures your claim settlement process will be smooth in the future.
In India, it is against the law to ride a bike without Third Party insurance. However, in the case of accidents and other emergencies, this cover is not sufficient. Therefore, it is important to also have a Comprehensive Cover. Before buying, make sure you research well, compare quotes, and read the reviews shared by other customers online. Also, make sure you understand the inclusions and exclusions of your two-wheeler policy before finalizing your two-wheeler insurer.
It is important to make an informed decision instead of settling for the cheapest plan available in the market.