Two-Wheeler Insurance Explained: What’s Covered and What’s Not
The idea of insurance is built around hoping for the best but preparing for the worst. When we buy insurance, be it any kind, we think of the worst-case scenario. This lets us truly understand how an insurance policy works.
For example, when we buy Two-wheeler Insurance, we ask, “What if my vehicle is damaged beyond repair due to an accident?”, “Is coverage available only for natural disasters or man-made disasters as well?”, “Does not having a valid driving license affect my claim?”, and so on.
Unlike Life or Health insurance, we tend to neglect vehicle insurance. However, it is important to ask such questions and understand the coverage offered not only to make claims but to reap benefits we may not be aware exist. If you’re wondering what’s covered under your Bike Insurance policy and what’s not, you’ve come to the right place! Read on to find out all about Two-wheeler Insurance coverage:
What’s covered in your Bike Insurance
What’s covered in your Bike Insurance differs based on the type of insurance policy you have or opt for. Here we explain the extent of coverage for both Third-party and Comprehensive Bike Insurance policies:
Third-party Bike Insurance policy
Let’s first understand what a Third-party Bike Insurance policy is. A Third-party Insurance plan covers you against third-party liabilities arising out of an accident caused by your vehicle.
A third party refers to a third-party person, vehicle or property. For instance, if you happen to damage somebody’s gate while parking your vehicle, the damages to the gate would be considered third-party damages.
The term ‘third party’ refers to the beneficiary of the policy who is someone besides the two parties involved in the contract i.e. the insurance company and the policyholder. In fact, even the passenger on your back seat will be considered a third-party individual.
What’s Covered in Third-party Bike Insurance
Now that we’re clear on the basics of Third-party insurance, let’s dig into the coverage offered under a Third-party Two-wheeler insurance policy:
- The plan protects you from third-party property damage up to a sum of Rs. 1 lakh
- In case your bike causes injury or death of a third-party individual, the insurance provider will pay a compensation amount with no cap to that person or his/her dependents as per the legal settlement with the third party decided by the court.
Comprehensive Bike Insurance policy
In addition to coverage for third-party liabilities, a Comprehensive Bike Insurance policy also insures you against own damage, losses or damage to the vehicle in the event of a fire, accident, or natural calamities.
The maximum amount you can claim for damages to your bike is pegged at the Insured Declared Value (IDV) or the current value of your bike.
What’s Covered in Comprehensive Bike Insurance:
The inclusions of a Comprehensive Two-wheeler Insurance policy are as follows:
- Any damage caused to your vehicle due to accidents, fire or other natural or man-made calamities.
Natural calamities include: Fire, explosion, self-ignition or lightning, earthquake, flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm, frost landslide, and rockslide.
Man-made calamities include: Burglary, theft, riots, strikes, malicious activities, accidents by any external means, terrorist activity, and any damage in transit by road, rail, inland waterway, lift, or air.
- Repair or replacement expenses you incur due to an accident
- Total loss/theft of your vehicle
Compulsory Personal Accident Add-on Cover
Every vehicle owner/driver in India is required to have a personal accident cover of at least Rs.15 lakh. However, you can skip opting for this add-on if you already have an active cover.
A Compulsory Personal Accident Cover compensates the owner rider up to a sum of Rs.15 lakh in case of death or permanent disabilities caused by accidents involving the insured vehicle.
While your Bike Insurance plan covers you against damage to a third party and your own vehicle, a Personal Accident cover protects you against permanent disabilities due to an accident and compensates your family in case of your accidental death resulting from an accident.
What’s not covered in your Bike Insurance
Insurance companies also list out exclusions in Bike Insurance policies. Here’s what’s not covered in Third-Party, Comprehensive Bike Insurance and Personal Accident covers:
- An accident caused under the influence of alcohol, drugs or any other intoxicating substance
- An accident caused while riding your bike without a valid driving license.
A valid driving license, and not a learner’s license should be carried by the rider in the front/rider’s seat to make a claim.
- Loss or damage of your bike or damages to another vehicle due to an accident outside the geographical boundaries mentioned in the policy, which is typically India
- Loss or damage of your bike or damages to another vehicle due to an accident that is consequential in nature. Consequential loss/damage here means damage that occurred as a result of the policyholder or third party’s action, be it intentional or by accident.
For instance, during monsoons, hydrostatic loss is common. This does not happen due to heavy rains or floods but because the vehicle owner cranked up the vehicle in a water-logged spot. This is considered a consequential loss and is not covered under insurance.
- Damages caused by your negligence while riding
Here are a few specific exclusions of comprehensive Bike Insurance:
- Normal ageing, wear and tear
- Mechanical or electrical breakdown
- Depreciation, which is the gradual reduction in the value of a vehicle over time
- Damages to fibre and rubber parts of the vehicle
- Loss or damages caused due to a nuclear attack or war
The type of Bike Insurance policy you buy for your vehicle is entirely up to you. You should, however, make sure that your bike is properly insured and that you renew the policy regularly so that you and your bike are protected.
If you are planning to purchase motor insurance, check out the links below to know more