Insurance is meant to offer financial coverage in case of a loss or damage.  The two-wheeler insurance policy is meant to cover the loss of two-wheelers as well as damage to your two-wheeler or damage caused by your two-wheelers to others or other vehicles in case of unforeseen events like an accident.  The two-wheeler insurance plans are designed in such a way that they offer maximum protection. Compare Bike Insurance policies to know about the premiums and the cover offered.

What are the vehicles that come under the definition of two-wheelers?

Two-wheeler is a blanket term that goes on to include motorcycles, mopeds, scooters, and other non geared vehicles meant for personal use, commercial use or a mixture of both.

Types of policies

Like any other insurance policy the two-wheeler insurance too,  are of two types:

  • Comprehensive plan- This plan offers coverage for both you and your vehicle as well as for the third-party against any loss or damage by or for your vehicle.

  • Liability only policies- It is also called as Third-party policy. It offers coverage only when the third-party is affected due to your vehicle in an accident.

When you Compare Bike insurance prices or premiums you will notice that it differs depending on the type of coverage. Obviously, the comprehensive policy is costlier than the third party policy. While you have the option to choose the cover you want, you must note that the third party or liability only policies are mandatory under the Motor Vehicles Act.

One other type of coverage is the Add-on cover.

The add-on cover would be provided for two-wheelers which would be useful to cover the expenses that you might have to incur suddenly in case of a repair. This add-on the cover is meant to supplement the comprehensive plans to make it more beneficial.

Add-on Cover for two-wheelers

The most common add-on covers that the insurance companies offer include

  • Accessories cover- This provides cover for the high end electronic and electrical fittings that you have made to your two-wheeler. The estimate of the accessories have to be provided when you buy the policy itself

  • Medical cover- this covers the cost of medical assistance that the insured gets in case of an accident while traveling on your two-wheeler.

  • Passenger cover- Though the comprehensive policy covers disability and death of the insured vehicle owner/driver, the passenger cover add-on which comes at a little higher premium covers death/disability of the pillion rider who is also at risk.

  • Zero/Nil  Depreciation cover-  This covers the costs for repair or replacement of-of most of the parts of the two-wheeler.

Some of the other add-on covers that are offered by the different insurance companies include flat tire cover, minor repairs cover, spare keys cover, flat battery cover all of which comes with an additional premium. Since the type or extent of add-on cover varies from one insurer to the other along with the premium for them too, it is important to Compare Bike Insurance premiums and the benefits before you choose the insurer.

The long-term cover

The IRDAI has taken a policy decision to reduce the number of uninsured vehicles that ply on the road. It has made it mandatory for the new buyer's cars as well as two-wheelers to purchase the third-party insurance for a period of 3 years or 5 years as against the one year in practice till now. This is considered to be effective in two ways

  • It would reduce the number of uninsured vehicles on the road

  • Since the risk pool becomes larger, because of the larger number of vehicles that are insured, it could bring down the premium rates.

But you have to Compare Bike Insurance rates over a period to see if it is really effective.

However, the factors that the IRDAI contends is favorable to the policy buyers or owner/ drivers is that

  • there is no hassle of renewing the insurance every year

  • since the premium is collected upfront, it offers some sort of stability in the premium rates by reducing the chance of hike I the third party premium for the defined period.

  • It also offers advantages in that you do not have to pay service tax every year.

  • Even if a claim is made during the period in which the premium has been paid, the No claim bonus would not be nil. It would only be lowered.

  • There is every chance for you as an insured to get a proportional refund in case of cancellation of the policy. This is possible even if you have made a claim on the policy.

This policy is supposed to benefit the insurers in that, and it would give them an opportunity to penetrate the market and also help them to increase the volume of premiums.

The IRDAI regulations at present

The IRDAI which is the regulating body of the insurance companies has now made it mandatory for all insurance companies to raise the cover for personal accidents meant for owner-driver to Rs. 15 lakh. They have also fixed the premium at Rs. 750 per anum for the policy. The rate is likely to be valid until further notice is issued.

The capital sum insured for motorized two-wheelers in effect before this rule was about 1 lakh to 2 lakh. The announcement by the IRDAI is based on the judgment given in October last year by the Madras High Court ordering the IRDAI to increase the accident cover from the existing amount of 1 lakh to at least 15 lakh. This was suggested to ensure that there was some solace to the victims of road accidents who may face fatal injuries or even lose their life.  

The high court also laid down that the insured/ owner of the two-wheeler can opt for a cover of over 15 lakhs, if he so desires, by paying a higher/ additional premium. This makes it important not only to learn about the present premium rates but also to Compare Bike Insurance premiums across different insurance companies. The

The conditions laid down for the cover

The cover would be available to

  • The owner/driver of the motorized two-wheeler

  • The owner/driver with a valid driving license

  • While driving the vehicle

  • While mounting on to the vehicle

  • While dismounting from the vehicle

  • Traveling in the insured vehicle as a pillion rider.

However, the cover does not apply if the owner/driver does not have a valid license or the vehicle does not have valid insurance.  

What is IDV in two wheeler insurance?

IDV refers to the Insured Declared Value. The IDV would play a vital role when you buy insurance for your two wheeler.it is calculated as follows

IDV= current market value of the two-wheeler- depreciation on its parts. The market value used for calculation does not include the cost of registration of the vehicle as well as the insurance premium. Similarly, if the accessories you have fitted on to your bike or two-wheeler is not factory fitted the IDV would be calculated separately.  In the case of vehicles that are aged over 5 years, the IDV is calculated on the basis of a common agreement on the value by the insurer as well as the insured. You also have IDV calculation services online. you can Compare Bike Insurance premiums to have a better understanding of how IDV can influence the premium calculations.

Observations

Since the changes in the insurance industry that has been fostered by the policies of the IRDA such as making it mandatory to buy an insurance policy for 3or 5 years depending on the preference of the insured, it actually increases the cost/premium of the policy. Again the add-on covers which would be available in multiples of a lakh actually makes the cover costlier at the start. However, the service tax saving and the stability in the premium are cited as advantages.

For a person who is buying a new two-wheeler, the costs are actually high. Now having fixed the minimum CPA  or accident cover at 15 lakhs and having made it mandatory for the premium also to be fixed at 750 mandatory, there is no doubt that the hike in the premium would be quite high when you Compare Bike Insurance premiums of the past.  The hike completely quashes the advantages offered by the previous policy announced in terms reduced service tax for 2-3 years. Since the add-ons can e made over and above the 15 lakhs can be made only in multiples of a lakh, it would further increase the premium costs. Since the insurance premium paid is deducted while calculating the IDV which is very important in fixing the premium rates, This would also be an additional reason for the increase in the premium rates.

The premium is definitely going to be very high but, considering the solace it would offer to the owner/driver in case of an accident or death, it should be considered as an essential expense to help you carry on with your life without worrying while you are moving on a two-wheeler. However, like earlier, you would see different insurers offering different benefits. Compare Bike Insurance and choose judiciously.

 

Published by Peter Garlow