A complete guide to Two-wheeler Insurance Plans

In India, the Motor Vehicles Act, 1988 governs the traffic rules which every vehicle has to follow if it is to run on Indian roads. One such rule specified in the Motor Vehicles Act is the requirement of a valid third party insurance cover on every vehicle, whether private or commercial, which runs on Indian roads. As such, if you are a vehicle owner, you need to buy a vehicle insurance policy on your vehicle to comply with the insurance rules contained in the Motor Vehicles Act, 1988.

What is two-wheeler insurance?

A two-wheeler insurance policy is a policy which provides insurance coverage to the bike, as per the provisions of the Motor Vehicles Act, 1988. The policy provides coverage against the accidents caused by the bike or suffered by the bike as per the type of policy selected.

Types of bike insurance plans

There are two types of bike insurance plans available in the market. They are as follows-

1. Third-party liability insurance policy
   This policy is the mandatory cover which is specified under the Motor Vehicles Act, 1988. This is compulsory to be taken for every bike which is used in India. The policy provides coverage for any damages or injuries caused to other individuals due to the bike.
   
   
2. Comprehensive package policy
   This policy provides a wider scope of coverage to the bike. It covers the mandatory third-party liability coverage as well as the damages suffered by the bike itself. Comprehensive plans, therefore, have more inclusive coverage benefits and are priced higher than third party plans.

Comparison between the third party and comprehensive bike insurance plans

Here is how the third party and comprehensive bike insurance policies differ from one another –

Basis of difference	Third-party liability policy	Comprehensive policy
Coverage	Covers only third party legal liabilities	Covers both third party legal liability and damages suffered by the bike
Need	Mandatory as per law	Not mandatory. You can buy the cover for a wider scope of protection on your bike
Premium rates	Premiums are low and are fixed by the Insurance Regulatory and Development Authority. The premiums are also the same across all insurance companies	The premiums are higher and they are fixed by the insurance company itself. The premium varies across all insurance companies
Coverage limit	Accidental deaths and physical injuries have no coverage limits. They are covered for an infinite amount. Property damage coverage, however, is available for up to INR 7.5 lakhs	The coverage is limited to the Insured Declared Value (IDV) of the bike insurance policy. IDV is the value of the bike after considering depreciation based on the bike’s age
Add-ons	Add-ons are not available	A range of add-ons are available which can be selected at additional premiums
Premium calculation	Premium depends on the engine capacity of the bike	Premium depends on a lot of factors, engine capacity being one of them
No claim bonus	Not applicable	Available if no claims are made in a policy year
Premium discounts	Not applicable	A range of premium discounts are available under the plan
Coverage duration	Can be taken for one year or for a longer duration of 2 or 3 years. For new bikes bought on or after 1st September 2018, the coverage duration should be 5 years	Can be taken for one year or for a longer tenure of 2 or 3 years. Even for new bikes bought on or after 1st September 2018, long term coverage is not necessary

Coverage under bike insurance plans

The coverage offered by bike insurance plans depends on the type of policy that you buy. Here are the two types of bike insurance plans and their respective coverage benefits –

1. Third-party liability plans
   Under third party liability plans, coverage is offered only for third party liabilities which you face when another individual is harmed due to the bike. The policy covers the following types of financial liabilities –
   1. Liability faced when an individual is physically hurt due to the bike
   2. Liability faced when an individual is killed due to the bike
   3. Liability faced when an individual’s property is damaged due to the bike
      
      
2. Comprehensive plans
   As stated earlier, comprehensive plans allow a wider scope of coverage. They cover third party liabilities and damages suffered by the bike. Here is the scope of cover of comprehensive bike insurance plans –
   1. Liability faced when an individual is physically hurt due to the bike
   2. Liability faced when an individual is killed due to the bike
   3. Liability faced when an individual’s property is damaged due to the bike
   4. Financial loss suffered when the bike is damaged due to natural causes like floods, earthquakes, lightning, landslides, cyclones, etc.
   5. Financial loss suffered when the bike is damaged due to man-made causes like fire, explosion, malicious acts, riots, strikes, etc.
   6. Financial loss suffered when the bike is stolen
   7. Financial loss suffered when the bike is damaged when being moved from one place to another through road, rail or air

Besides this coverage available under the respective types of policies, there is also a mandatory personal accident cover which should be taken in either of the bike insurance plans. This personal accident cover has coverage of INR 15 lakhs and it covers accidental deaths and disablements. In the case of disablements, both total and partial permanent disablements are covered. If the owner/driver of the bike suffers accidental death or permanent total disablement, 100% of the coverage value, i.e. INR 15 lakhs is paid as claim. In the `case of permanent partial disablement, however, 25% to 75% of the coverage value is paid depending on the severity of the disability suffered.

Also Read: Best bike insurance company in India

Add-ons under bike insurance plans

Under comprehensive bike insurance plans, there are different types of add-ons which are available. These add-ons are additional coverage benefits which can be selected voluntarily by the policyholder by paying an additional premium. Some of the most popular and common add-ons found in bike insurance plans are as follows –

1. Zero depreciation add-on
   Bikes undergo depreciation as they are used and they age. This depreciation is not covered under bike insurance plans. When a claim occurs, the insurance company deducts the relevant depreciation on different parts of the bike before paying the claim. However, in repairs, you incur the actual cost of the parts being repaired. When the depreciation is deducted, you get a lower claim amount and face out-of-pocket expenses. A zero depreciation add-on, therefore, proves useful. Under this add-on, the depreciation on the parts of the bike is not considered at the time of claim. The insurance company pays the actual costs of repairs irrespective of the depreciation suffered. Thus, your out-of-pocket expenses are reduced.
   
   
2. Roadside assistance add-on
   If your bike faces a breakdown in the middle of the road and it cannot be taken to the nearest garage, a roadside assistance add-on proves useful. This add-on provides you 24*7 support in case of breakdowns. You just have to inform the insurance company and the company sends assistance wherever you are. Assistance is provided for flat tyres, loss of fuel, electrical breakdowns, jump-starting the bike, etc.
   
   
3. NCB protect add-on
   In a bike insurance policy, if you do not make any claim in a policy year, you earn a no claim bonus. This bonus allows you a discount on the renewal premium. Moreover, the bonus increases after every subsequent claim-free year. However, when a claim occurs, the entire no claim bonus is lost. This add-on protects this loss of no claim bonus. It keeps the NCB intact even after you make a claim on your bike insurance policy.
   
   
4. Lost key replacement
   If you lose the keys of your bike, this add-on would cover the cost of replacing the lost key with a new one.
   
   
5. Medical expenses add-on
   Under this add-on, the medical expenses which you face if you are hospitalised following a bike accident are covered.
   
   
6. Personal accident cover for the pillion rider
   A bike insurance policy mandates a personal accident cover only for the owner/driver of the bike. The cover is not available for the pillion rider. However, with this add-on, a personal accident cover can also be taken for the pillion rider.
   
   
7. Consumables cover
   In case of repairs of the bike, the costs incurred on consumables are not covered under the bike insurance policy. These consumables include engine oil, nuts, bolts, screws, lubricants, etc. which are used by the garage in repairing the bike. However, the consumables cover add-ons ensures that the cost of consumables is also covered by the bike insurance policy.
   
   
8. Return to invoice
   When the bike is damaged beyond repairs or if it is stolen, the bike insurance policy pays the Insured Declared Value of the bike which is the market value of the bike after depreciation. However, if this add-on is selected, the claim paid would be equal to the invoice value of the bike.

Exclusions under bike insurance plans

Now that you know the exact coverage options under bike insurance policies, both inbuilt and optional, it is time to know what is not covered by the plan. There are instances which are not covered under bike insurance policies and they are called policy exclusions. These exclusions include the following –

1. Accidents suffered when the bike is being used without a valid driving license
2. Accidents suffered when the bike is being used outside the boundaries of India
3. Accidents suffered when the bike is being used under the influence of drugs and/or alcohol
4. Accidents suffered when the bike is being used against the limitations of its use
5. Accidents suffered when the bike is being used for criminal activities
6. Accidents suffered when the bike insurance policy has lapsed
7. Depreciation of the bike
8. Normal wear and tear of the parts of the bike
9. Electrical or mechanical breakdowns
10. Damages suffered due to war, mutiny, rebellion, nuclear threats, etc.
11. Consequential losses

Discounts available under bike insurance plans

Under comprehensive bike insurance policies, different types of premium discounts are allowed. These discounts include the following –

1. No claim bonus discount
   As mentioned earlier, if no claims are made in a policy year, a discount is allowed in the renewal premium and the discount also increases after every subsequent claim-free years. The rate of no claim discount is as follows –

Claim –free years	No claim bonus rate
One claim-free year	20%
Two successive claim-free years	25%
Three successive claim-free years	35%
Four successive claim-free years	45%
Five successive claim-free years	50%

2. There is a discount of 5% or 10% if you buy long-term comprehensive policies
3. A discount is allowed if you are a member of a reputed automobiles association
4. You also get a discount for buying the policy online
5. A discount is allowed if the bike is modified for the use of a disabled rider
6. If you opt for a voluntary deductible, you can earn a premium discount

Important terms related to bike insurance

A bike insurance policy is a technical cover which includes various jargons which you might not understand. So, here are some important terms related to bike insurance plans which you should know –

1. Own damage cover and/or premium
   Own damage refers to the damages suffered by the bike. This cover is included under comprehensive policies. Moreover, a separate premium is charged for own damage cover which is called own damage premium.
   
   
2. Compulsory deductible
   Under all bike insurance policies, there is a component of the compulsory deductible. This is the amount of claim which is not paid by the insurance company. You have to pay the compulsory deductible from your pockets and the insurance company would settle any excess claims.
   
   
3. Voluntary deductible
   The concept of voluntary deductible is similar to a compulsory deductible. In case of a claim, the amount of the deductible is to be paid by the policyholder and the insurance company pays the remaining. The only difference is that voluntary deductible is voluntary in nature. You might choose to opt for it and if you do, you get a premium discount. A voluntary deductible would be over and above the compulsory deductible that you have selected.
   
   
4. IDV
   IDV stands for Insured Declared Value. It represents the maximum coverage offered by a comprehensive policy. The value is arrived at by deducting the market value of the bike with depreciation based on the age of the bike. The depreciation rates which are used to calculate IDV are as follows –

Age of the bike	Depreciation rate
Up to 6 months	5%
More than 6 months but less than 1 year	15%
More than a year but less than 2 years	20%
More than 2 years but less than 3 years	30%
More than 3 years but less than 4 years	40%
More than 4 years but less than 5 years	50%

Key benefits of bike insurance plans

A bike insurance policy offers the following benefits –

1. It covers the legal necessity which is prescribed under the Motor Vehicles Act, 1988. Thus, the policy helps you avoid legal complications and fines
2. Since the policy covers third party liabilities, you are freed from the financial burden that you face if you cause any type of harm to any individual
3. Comprehensive policies also cover the damages suffered by the bike freeing you from the financial expenses of repairs
4. If your bike is stolen, a comprehensive policy compensates you for the loss that you suffer so that you can buy another bike
5. The add-ons available under comprehensive bike insurance plans help you avail an inclusive scope of coverage and come to your rescue in emergencies

Top bike insurance policies in India

Here is a table showing some of the best bike insurance policies in India –

Name of the plan	Salient features	Cashless garage network	Incurred Claims Ratio for FY 2017-18
Magma HDI Two-wheeler Insurance Package Policy	·         There is a personal accident add-on which allows personal accident cover for pillion rider Attractive premium discounts make the premiums affordable	Major garages across India	34.93%
ICICI Lombard Two-wheeler Insurance Policy	·         A range of add-ons make the plan customisable· You can take the plan for various tenures	3400+	68.26%
New India Two Wheeler Insurance	·         There are different types of plans which suit the coverage requirements of all· The policies are competitively priced	Major garages across India	103.19%
Bajaj Allianz Two Wheeler Insurance	·         The company promises to settle its claims at the earliest·         There are different types of policies available with the company	4000+	77.61%
Go Digit Two Wheeler Insurance	·         You can get up to 50R% discount by not making claims under the plan· There are five optional covers for a wider scope of coverage	1000+	60%

How are bike insurance premiums calculated?

Calculation of bike insurance premiums is done based on a lot of factors which are as follows –

• Age of the bike – the older the bike is, the lower would be the premium
• Make, model and variant – this determines the value of the bike and the higher the value the higher would be the premium
• Registration location – premiums are higher for bikes registered in metro cities than non-metro ones
• Add-ons selected – if add-ons are selected, the premium would increase as each add-on comes with an additional premium
• Type of policy – third party plans would have lower premiums compared to comprehensive policies
• Discounts available – if there are discounts applied to the bike, such discounts would be considered to reduce the premium
• Term of the policy – long term bike insurance plans have higher premiums than annual policies
• IDV selected – the higher the IDV, the higher would be the premium

How to make a claim in bike insurance plans?

A claim in a bike insurance policy occurs in case of third party liabilities, if your bike is damaged or if the bike is stolen. In case of any of these claims, the following steps should be followed –

1. Inform the insurance company immediately of your claim
2. The insurance company would then advise you to take your bike to the nearest preferred garage for cashless repairs. If you get your bike repaired at a non-networked garage, claims would be settled on a reimbursement basis
3. At the garage, the insurance company’s surveyor would come and check the extent of damages suffered by the bike
4. The surveyor would prepare a claim report and submit it to the insurance company
5. The company would assess the report and approve cashless repairs
6. Once the approval is received, the garage starts repairing the bike
7. When the repairs are completed, the insurance company settles the claims directly with the garage and you can take delivery of your bike
8. In the case of third party claims, a police FIR should be filed. The claim would then be taken to the motor accidents tribunal where the liability would be judged. Based on the judgement of the tribunal, the insurance company would pay the claim to the third party
9. If the bike is stolen, a police FIR should be filed. If the police are unable to locate your bike, they would issue a certificate stating the same. The certificate should be submitted to the insurance company based on which the company would pay the claim

If you have bought your bike insurance policy from Turtlemint, you can simply inform Turtlemint for the settlement of your claim. Turtlemint would take the above-mentioned steps to ensure that your bike insurance claims are settled at the earliest. You can inform Turtlemint by calling at 1800 266 0101 or by sending an email at claims@turtlemint.com. 

Documents required for bike insurance claims

Here are the documents which should be submitted to get the settlement of your bike insurance claim –

• Claim form
• Policy bond
• Driving license
• RC Book of the bike
• Identity proof of the claimant
• PUC certificate of the bike
• Police FIR for theft and third party claims 

How to buy bike insurance plans?

You can buy bike insurance plans online from the website of the insurance company whose policy that you want to buy. You just have to enter the details of your bike like the bike’s registration number, manufacturing year, registration location, make, model and variant, etc. and the premium for the policy would be calculated. You can also choose add-ons based on which the premium would be recalculated. You can, then, pay the premium online and the bike insurance policy would be issued instantly.

You can also buy the best bike insurance plan from Turtlemint. Turtlemint is an online platform which is tied up with some of the leading bike insurance providers in India. When you choose Turtlemint you can compare the different bike insurance policies available in the market in terms of their coverage and premiums. You can, then, select the best bike insurance policy, pay the premium and the policy would be issued instantly. Turtlemint also offers you personalised assistance in buying the best bike insurance policy for your bike. 

How to renew bike insurance plans?

Since a bike insurance policy is mandatory by law, you have to renew the policy regularly to ensure uninterrupted coverage. Renewals of bike insurance policies can also be done online. You just have to visit the website of the insurance company from which you bought the policy, provide the policy number of your existing policy, pay the renewal premium and the policy would be renewed instantly.

If, on the other hand, you have bought the policy from Turtlemint, you can log into your online Turtlemint account and renew the policy directly by paying the renewal premium. Moreover, if you have a bike insurance policy of another company and you want to switch, you can compare the available policies on Turtlemint’s website, compare and then buy a new policy at the time of renewals