Some common mistakes you can avoid when buying Bike Insurance
We’ve listed out 6 of the most common mistakes bike owners tend to make while purchasing a Bike Insurance policy. Avoiding these mistakes will ensure that you have a Bike Insurance policy that offers the right coverage at the right price for your bike.
When you buy a new bike, the dealer typically includes an insurance policy in the offer. Thus, with a new bike, you also have an insurance policy in hand and have nothing to worry about until it’s about to expire. It is when you need to purchase a new policy on your own at the end of the term that you may face some difficulty. You would have to pay heed to certain details that ensure your bike has optimum coverage.
If it’s that time of the year again when you need to cover your bike with an insurance policy, read through these common mistakes so that you can avoid them and buy the right insurance policy for your bike!
1. Letting the policy expire
An expired policy means that your bike is uninsured, indicating that every time you take your bike out, near or far, you are committing an offence as per the Indian Motor Vehicles Act. Moreover, you are putting yourself under huge financial risk that could be difficult to manage in case of an unfortunate incident that leads to damages. Also, any No Claim Bonus you may have accumulated would be lost if you do not buy a Bike Insurance policy within 90 days from the date your policy expired.
A No Claim Bonus (NCB) is a discount Insurance companies offer on premiums. It is offered by insurers at the time of Bike Insurance purchase when you do not make any claims in a policy year. So, if you’ve accumulated NCB in a policy year, you can purchase the next policy at a discounted price.
Key Takeaway: Always purchase your Bike Insurance policy in time for continuous coverage and to save your NCB.
2. Choosing incorrect NCB
Typically, for the first claim-free year, insurance companies offer a 20% NCB. And every claim-free year post that, it increases by 5% up to a maximum of 50%. Now, if you happen to switch your insurer after having accumulated NCB, you need to make sure that you enter the right NCB when you buy the insurance policy. If you don’t enter the right percentage, you lose out on the discount. On the other hand, if you enter a higher percentage, it would amount to fraud and could have legal consequences.
Key Takeaway: Enter the right NCB percentage at the time of insurance purchase/renewal for maximum benefit.
3. Entering inaccurate personal details
Many a time, policyholders tend to overlook crucial details such as the spelling of the insured’s name and nominee, the correct age and address of the insured, bike details, etc. A discrepancy in any such information when compared with the previous year’s insurance policy or the Registration Certificate (RC) of the bike could render your insurance policy invalid. Any claims made under such policies will not be approved by the insurer.
Key Takeaway: Always crosscheck the tiniest of details with your previous year’s policy and RC when you purchase a new policy.
4. Choosing a plan that doesn’t suit your needs
Choosing the right policy ensures you are protected against any financial liability associated with your bike. It is important that you choose the right IDV and the right insurance covers.
For instance, the Third-Party Insurance cover is mandatory by law, so if you choose to cover your bike with a Third-Party Insurance policy, and later wish to cover your own bike against damages as well, you should only opt for an Own Damage cover and not a Comprehensive Cover. The following year, you can opt for a Comprehensive cover that covers both third-party and own damages.
Key Takeaway: Choose the right insurance policy based on your requirements to ensure the best coverage and to avoid overspending.
5. Failing to transfer the existing policy of a second-hand bike
When you buy a used vehicle, it is crucial to transfer the RC as well as the insurance. If the existing insurance is not transferred, you would be riding the bike without insurance which accounts for a violation of the law.
Key Takeaway: When you buy a used vehicle, ensure the existing insurance is transferred or get a new insurance policy to avoid paying fines.
6. Not knowing when the cover starts
Another common mistake among policyholders is not checking the date the insurance cover starts. Being aware of these details will ensure smooth settlement of claims.
When you purchase a Bike Insurance policy on PhonePe, for example, you should be aware that once you purchase a policy, the cover starts 1 day after purchase, provided the previous year’s policy has not expired. On the other hand, if your policy has expired, your new policy cover starts 3 days post the date of purchase.
Key Takeaway: Read the policy document carefully and know details that could affect your claim.
The common mistakes mentioned above can be easily rectified. All you have to do is pay attention to the details you fill up while purchasing or renewing your Bike Insurance policy. Take note of the tips we’ve covered in the blog and you will have nothing to worry about!