Two-wheeler Insurance: Know the nuts and bolts

Buying a bike can be an exciting process. It requires a great deal of research as you look for a bike that has a great design, provides comfort, gives good mileage, has a low maintenance cost and also fits within your budget.

Once you hone in on your perfect bike and make the decision to buy it, there is one more thing that you need to do. That is to buy two-wheeler insurance. In India, it is mandatory to buy third-party two-wheeler insurance for all bike and scooter owners.

As the owner of a two-wheeler, you can either buy a minimum of third-party two wheeler insurance cover or an all-inclusive comprehensive cover. However, it is always advisable to buy a comprehensive cover that comes with multiple additional advantage. While we agree that the process of choosing the right two-wheeler insurance policy is nowhere close to the exciting process of choosing a bike, we can definitely make it simple for you.

All you need to do is pay attention to some specific details and you are well on your way to breezing to Goa on your bike.

First and foremost, know the types of Two-wheeler Insurance Policies.

Third-party cover: It covers the damages caused to a third person, vehicle or property. It will not cover damages caused to you and your vehicle.

Comprehensive cover: In addition to the third-party cover, it also provides coverage to you (vehicle owner/policyholder). The insurance premium is comparatively higher for a comprehensive plan, as it covers all the major damages. You can choose a value-for-money product after comparing various products that are available in the market.

Coverage: The insurance policy that you buy should cover the losses/damages that are most important to you. A standard two-wheeler insurance consists of a third-party liability cover and an own damage cover. Instead of opting for a minimum third-party cover, it is better to choose a comprehensive cover that includes coverage for accidental damages and third-party losses.

No-Claim Bonus (NCB): An interesting thing to know about your policy is the no-claim bonus. If you have not made any claims in the previous policy year, then you are entitled to receive a no-claim bonus while renewing the policy. The no-claim bonus ranges between 20% - 50% and increases with each claim-free year. The value of the discount offered on the premium primarily depends on the insurance claims that you have made in that particular year. The discount can reach a maximum of 50% in six consecutive years of policy renewal.

Price: In the case of a two-wheeler insurance policy, cost should not be the sole factor contributing to your purchase decision. Other factors like the insurance company, the claims settlement ratio, services offered etc. are equally, if not more important, than price. One must evaluate these factors in order to make an optimal choice.

Tenure: In India, it is mandatory for two-wheeler vehicles bought on or after 1st September 2018 to own a 5-year third-party insurance policy. As regards to the comprehensive cover, the vehicle buyer would have an option to buy it for five years. While it might seem that the vehicle owner has no choice but to buy the policy for a longer term tenure, one must understand that buying a longer term policy has myriad benefits. The vehicle owner can then take advantage of NCB and is saved the hassle of renewing his policy every year.

Add-Ons, needed or not needed: Most policies will come with add-ons like zero depreciation cover, engine protect, consumables, to name a few. Though it is good to buy these add-ons to expand your coverage, opt for them only if you require them and the increase in premium does not pinch you. If you have a specific risk factor, it should be covered by the insurance policy.

Exclusions of a Two-Wheeler Insurance Policy: There are certain circumstances under which could impact your two-wheeler insurance claim . These could include instances of wear and tear, mechanical or electrical breakdown of the vehicle, absence of a valid license and many others. Ensure you know the exclusions of the policy before you purchase it.

Many of you who are bike enthusiasts love to delve into the technicalities of your vehicle. However, if you are a true enthusiast then you need to make the effort to understand the technicalities of your two-wheeler insurance policy as well. To buy the insurance policy that suits your requirements and at the best price, it is advisable that you consider the aforementioned factors and compare the insurance policies offered by various companies. Finally, it is your decision to choose the best two-wheeler  insurance policy that meets most of your needs and falls within your budget.

By Dhirendra Mahyavanshi, Co-Founder, Turtlemint