According to data reported by the General Insurance Council (GIC), 60% of vehicles running on Indian roads are not insured. Another key finding of this report was that a majority of these uninsured vehicles were two-wheelers - meaning scooters and bikes. Statistically, two-wheelers are more likely to be involved in road accidents than four-wheelers.
Legally speaking, as a two-wheeler owner in India, you must have a valid insurance policy while driving. This policy is known as Third Party Liability which covers damages incurred to third party persons or property due to an unfortunate accident. Another type of insurance that provides a wider scope of coverage is a Comprehensive Policy. The Comprehensive policy provides security against natural and man-made calamities. Apart from this, your vehicle is also protected against theft, vandalism, and other unexpected conditions. Therefore, it is of utmost importance to buy a comprehensive two-wheeler insurance policy.
Understanding the Importance of Two Wheeler Insurance
Satish owns a Hero Honda Passion Pro (100 CC). While driving, he meets with an accident. He unintentionally damages Rajesh’s bike. The mandatory Third-Party Liability cover will cover the cost of damage caused by Satish on Rajesh’s bike. However, since Satish does not have comprehensive two-wheeler insurance, he would have to bear the entire cost of his bike’s damage.
Now, let’s consider the same scenario, but this time Satish has comprehensive two-wheeler insurance. If Satish meets with an accident, the entire cost of his own damage, as well as Third-Party Liability, will be taken care of by his two-wheeler insurer.
Two Wheeler Insurance Coverage
A standard comprehensive two-wheeler insurance plan covers loss or damages caused by unpredictable natural calamities like floods, earthquakes, cyclones, storms, etc. Additionally, it also covers acts of man-made calamities like burglary or theft, riots, terrorist activity, or any other accidental damage.
As a two-wheeler owner, it is essential for you to know about the various aspects of two-wheeler insurance and how that affects you. Here is a table to help you understand what is included and not included in two-wheeler insurance:
| Two-wheeler Insurance Includes | Two-wheeler Insurance Excludes |
|---|---|
| Damage caused to your bike in case of an accident | Damaged caused to your bike due to incidents of drinking and driving |
| Personal Accident Cover - Injuries to the vehicle owner in case of a bike accident | Damages caused to your bike due to war or a nuclear strike |
| Financial compensation in case of damages caused due to natural calamities like earthquakes, floods, etc | All accident-related caused to your bike while using the vehicle for illegal activities. |
| Financial compensation in case of damages caused due to man-made calamities like riots, strikes, etc. | Damages caused or losses incurred if the vehicle was being driven without a valid driving license |
| In case of theft, compensation equal to your bike’s Insured Declared Value (IDV) | Mechanical expense or maintenance costs incurred due to bike usage |
Generally, driving a two-wheeler is considered to be riskier than driving a four-wheeler. Two-wheeler insurance covers the risk of physical injury, damage or loss of the vehicle and third-party liability in case of accidents.
Features and Benefits of Two Wheeler Insurance
- Third party liability policy, a type of two-wheeler insurance, offers you financial protection against damages or losses caused to a third party person or property, in case of accidents.
- A Comprehensive cover gives complete financial security for your vehicle as well as any third-party liabilities.
- Comprehensive cover also provides compensation against theft or damage incurred to your insured vehicle.
- The term of two-wheeler insurance is 1 year. Some insurers also offer Multi-year insurance plans.
- Usually, Personal Accident (PA) Coverage on two-wheeler insurance is about INR 7.5 lakhs. But in case of death or disability caused to the insured, it can be extended up to INR 15 lakhs.
- Two Wheeler Insurance policies offer coverage against natural calamities as well as man-made disasters.
- You will be eligible to claim a pre-decided sum (as mentioned in your valid two-wheeler insurance policy) if such incidents occur.
- Some insurers provide a 50 % discount on premium with a no-claim bonus (NCB) on their two-wheeler insurance policies.
To avail of these benefits, you have to pay a premium amount timely to the insurer.
Factors Affecting Premium for Your Two-wheeler Insurance Plan
The amount you pay as the insurance premium is much less than the total sum insured. However, it depends on the following factors:
- The Capacity of the Engine: Cubic capacity or CC of the engine is the main component of a bike insurance policy. Higher the cubic capacity of the bike, higher is the cost of insurance.
- Model of the Vehicle: The value of a bike depends on its brand and features. So, insurance for older vehicles with lesser features and lower CC is usually priced lower. For example - Two-wheeler insurance for a 2015 Honda Activa will be lower than a 2017 Honda Activa.
- Location of Registration: The price of two-wheelers changes from state to state. For example - The on-road price for a Hero Passion Pro in Bangalore might be INR 83,480 while it may be in Delhi INR 79,023. This changes the value of the bike and hence the premium amount changes.
- Insured Declared Value (IDV): Insured Declared Value (IDV) is the maximum sum assured in case of theft, major damage, or complete loss of the vehicle due to an accident. This sum assured is almost equal to the market price of the two-wheeler, at the time of purchase.
Summary:
These days, a lot of people choose high-end superbikes due to their speed and powerful engines. In case of an accident, a standard Third Party Liability will only cover damages to third party property or person. In the absence of a Comprehensive Cover, the cost of repairs will be extremely high. It is important to invest in two-wheeler insurance to stay financially secure. Since the premium amount is based on the model and engine, it is highly like that you may be overcharged. Make sure you thoroughly research and compare the plans offered by different insurance companies before buying.
