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Why is Bike Insurance mandatory in India?

Muktha Tavane|3 min read|08 September, 2021

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With the number of vehicles on-road increasing every year, vehicle owners, especially two-wheeler riders are exposed to unpredictable risks on road. Two-wheeler riders are more vulnerable to dangers on the road than a driver seated inside a car.

Hence, the Motor Vehicles Act of 1988 mandates all two-wheelers to be covered by at least a Third-party Insurance plan. In some states, one can face up to 3 months imprisonment, community service, and/or a fine of up to ₹2000, if found driving without an insurance policy for the vehicle.

In fact, with the intention to have maximum number of vehicles insured and to reduce the number of expired or uninsured vehicles, the IRDAI mandated all new vehicles purchased after 2018 to opt for either a 5-year Third-party Insurance policy or a 3-year Comprehensive policy when purchasing the vehicle. This move is welcomed by many. Given the low premium, a long-term insurance policy can be bought with the benefit of not having to renew the policy year after year.

A Two-wheeler Insurance plan essentially shields the vehicle owner from the financial burden resulting from an accident, theft, or a natural disaster.

Let’s understand this with the help of an example: If an unfortunate accident results in the death of a third-party individual, the financial and legal burden on the vehicle owner is significant. In case the vehicle owner is not insured, he/she will face uncapped liability leading to a huge financial risk.

A Bike Insurance plan ensures the financial safety of the vehicle owner and other commuters who could potentially be impacted by their vehicle. Therefore, an insurance plan is your best resource against unexpected expenses.

How does Bike Insurance help two-wheeler owners?

Bike Insurance should not be considered as only a mandatory document that the vehicle owner needs to carry. Insurance helps policyholders cover unexpected expenses that cannot be avoided.

In fact, the premium amount that you pay towards the Bike Insurance policy is much lesser than the sum insured (the amount up to which you can make claims) in case of plans that cover damages to your own vehicle. Thus, you only have to shell out a small amount that would cover most expenses that may arise as a result of an accident, calamity or theft.

Plans typically cover third-party liability, physical injury, and damage/loss of the vehicle but can vary based on the type of insurance plans, as explained below.

Types of Two-Wheeler Insurance plans

Here are 3 types of Bike Insurance plans explained:

1. Third-party Insurance: This insures you from financial liability you may face due to damage caused to a third party. It covers third-party property damage up to a sum of Rs.1 lakh and the cost of treatment of injuries to a third party in case of an accident. Also, in the unfortunate event that an accident leads to the death of a person, the policy will cover the legal liabilities arising out of the same and compensate the family of the deceased as per the court’s judgement.

One can also opt for a Compulsory Personal Accident cover in case they don’t have one. It compensates the insured owner-driver up to a sum of Rs.15 lakhs in case of death or permanent disabilities to the insured due to an accident involving an insured vehicle.

2. Own Damage Cover: If you have an active third-party cover and also wish to protect your own vehicle as well, you can choose the Own Damage cover. This plan insures you against damage caused to your vehicle due to accidents, fire or natural calamities, theft/loss, and repair/replacement expenses resulting from an accident.

3. Comprehensive Insurance: Comprehensive plans are a combination of third-party and own damage covers that insure you against third-party liability as well as damage or loss caused to your vehicle due to any possible accident or natural calamity.

Which is the best type of Bike Insurance?

While Third-party Bike Insurance is mandatory by law, it offers only basic coverage. A comprehensive insurance policy, on the other hand, gives you extensive coverage for own as well as third-party damages.

Why choose PhonePe for Bike Insurance?

Buying Bike Insurance on PhonePe is easy, instant, and paperless. You can compare plans across trusted insurance partners and choose the right plan for your two-wheeler. The purchase experience is hassle-free and can be completed within 2 minutes. What’s more, you can always access your policy document on the PhonePe app!

How to get Bike Insurance on PhonePe?

It’s simple — fill in your bike details, get quotes from different insurers, choose a quote, and pay to get the policy instantly! What’s more, you can also renew your Bike Insurance policy on PhonePe in just a few taps.

A Bike Insurance policy helps you stay prepared against potential financial burden up to the sum insured, for which you will have to pay only a nominal premium amount.

Planning to purchase motor insurance? Check out the links below to know more

Bike Insurance

Car Insurance

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