Are You A First Time Bike Insurance Buyer?
India is one of the largest markets for motorbikes. The high population density, existing road condition in India makes the two wheelers an excellent choice for commuting. Moreover, the slick design, the low occupancy on road as well as in parking area, low fuel consumption, affordable cost for mass and accessibility through narrow roads make bikes the primary choice of vehicle in India. It is the most convenient mode of transport across the cities and across all demographic segments in India.
However popular, bikes are at a high risk in terms of road accidents. Many times, bikes meet with accidents and if you are a first time owner of a bike, it is very important to know the risks involved and the importance of having insurance coverage for your vehicle. Insurance for the bike will protect you financially in case of an accident or theft, where you do not have to pay for the entire loss out of your pocket.
Buying insurance for your bike should be based on the individual requirement. For a first time buyer of bike insurance, the following information is must to know.
Types of Insurance Coverage Available
- Third Party Insurance – If you buy this plan, it will cover the third party liability in case of an accident. This includes any damage caused to property, bodily injury or death of the third party involved in an accident with the insured vehicle. As per the Indian Motor Vehicle Act of 1988, this type of insurance is mandatory and a minimum requirement for all two wheeler owners, without which they cannot ride the vehicle on road.
- Comprehensive Bike Insurance Policy – Under this plan, the vehicle owner/ policyholder gets coverage along with the third party liability cover. This is the extensive coverage that gives complete protection to the policyholder in case of accident or theft and the owner may not have to spend any money out of pocket, except for the deductible as mentioned in the policy
Exclusions
Certain situations are excluded from the policy coverage, like:
- Driving the bike without a valid license
- Driving under the influence of drugs or alcohol
- If the vehicle is involved in some un-authorized and illegal activities or purposes that are contradicting the policy guidelines
- If the vehicle is driven outside India
Most of the first-time users of bikes in India are students and young adults who have started their work life recently. To purchase an insurance plan for the first time, they should be aware of few Insurance terminologies that will make them aware of the process and help to take a conscious decision while shopping for bike insurance.
- Premium – This is the fixed amount that you have to pay on yearly basis to get the coverage benefits from insurance companies. There are several factors that determine the premium amount. For example:
- The riding experience of the driver (Less or no experience needs to pay higher premium)
- The type of vehicle
- The make and model of the bike
- The year of manufacturing of the bike
- The residence area of the owner (in case of a crime or accident prone area, the premium is higher)
- Claim – In case of accidents or theft, you are eligible to file a claim to the insurance company based on the policy coverage. The company will compensate for the damage. However, many insurance providers give ‘No Claim Bonus’ to the policy owner in case no claim was made against the policy.
- Insured Declared Value– This value is determined based on the sale price listed by the vehicle manufacturer, the age of the bike and the percentage depreciation of the bike. In case of any accident or theft, the maximum compensation that could be offered by the insurance company is determined by the IDV.
Finally, a first-time buyer of bike insurance has to go through the different aspects of insurance and do a market research of the insurance policies offered by different providers. They need to analyze the pros and cons of the policies and select the one that best fits their requirement and is the best trade for the price and purpose.
