When you own a two-wheeler, you are confident that you do not have to rely on public transportation for short trips or even long ones. You have the vehicle to navigate through heavy traffic without getting stuck. However, the roads are unpredictable and dangerous. While you may follow the rules and drive with precaution, others may not be that thoughtful. Among the different vehicles present on the road, two-wheelers are most vulnerable to severe damage.
Why is a bike insurance policy important?
One of the ways you can protect your vehicle is by getting bike insurance. Insurance for a 2-wheeler will protect your bike and you from repair costs and medical bills. The insurance policy for bike provides the policyholder with the financial support to take care of the bills and damage repairs. You can select a suitable policy by visiting an insurance provider’s website. The website also provides its customers with different features like a two-wheeler insurance premium calculator. This calculator can be of great help for an individual looking to compare other plans and select the most suitable one.
Like bike insurance helps individuals safeguard their vehicles, the IRDA (Insurance Regulatory and Development Authority of India) has developed rules and regulations to protect the individuals driving on roads. This regulatory body is the highest authority that looks after all insurance-related rules and regulations. They ensure that every customer is provided with the right information.
Why are these regulations required?
The main objective of introducing these regulations and rules is to maintain smooth communication between the customers and insurers. Insurance policies are a contract that must be fair on the part of both parties. The policyholder must follow the guidelines when purchasing a new policy to avoid any unfavourable consequences in the future. If you’ve bought the policy and are new to insurance plans, these guidelines will help you improve your journey.
IRDA guidelines for two-wheeler insurance policies:
Two-wheelers generally include – motorcycles, scooty, scooters, where the coverage type often includes:
- Third-party liability
- Comprehensive coverage
As per the IRDA guidelines, the comprehensive policy will cover the insured vehicle under the below situations:
- Damage or loss to the insured vehicle because of human-made disasters like burglary, theft, riot, strikes, etc.
- Damage or loss due to natural disasters like lightning, flood, storm, hurricane, earthquake, etc.
- Damage to the bike in the event of an external accident.
- Third-party liabilities that arise out of accidental damage, death or injury.
- A personal accident cover of up to ₹15 lakhs for various automobiles.
While these are all the situations under which the policy will provide coverage, let’s look at the exclusions of the plan:
- The policy does not cover damage to the car from regular use resulting in wear and tear or any damage due to mechanical breakdowns.
- Any damage to the bike tubes and tyres. Insurers offer up to 50% of the total cost in the event of a replacement.
- Accessories loss because of burglary or housebreaking, unless the two-wheeler gets stolen at the same time.
- If the bike is involved in an unfortunate accident and the policyholder was driving without their driving license.
- Any accident that occurred when the driver was under the influence of alcohol or other intoxicants.
- The policy will not cover any damages suffered outside the geographical area.
- Any claim arising from contractual liability.
It is crucial to note that the exceptions listed above are a part of the bike insurance policy. You must read the policy fine print to avoid any consequences when filing the bike insurance policy claim or to prevent your claim from being rejected.
Now we know about the plan’s exclusions, let’s look at the depreciation rules and regulations.
The IRDA has a set of rules for calculating depreciation, which is listed in the IRDA guidelines. The depreciation percentage applied for the different parts are listed below:
- Depreciation for the parts made out of rubber, nylon or tubes, batteries, plastic parts, and tyres is 50%.
- The depreciation for fibreglass components is 30%.
- Metal parts – as per the depreciation mentioned in the policy.
- No depreciation allotted for glass parts.
The vehicle’s IDV is also an integral factor to consider:
The Insured Declared Value plays an important role when it comes to deciding the premium for the policy. The IDV in bike insurance is the bike’s current market value. The IDV is crucial for calculating the sum insured of the plan. Along with the IDV, the vehicle’s cost of side accessories and other parts are also taken into consideration.
You should know that the depreciation rate applies to the IDV as well and will depend on the vehicle’s age. The IDV is extremely important as it is also treated as the main price when calculating the total loss of the bike. An insurance company would have to follow the IRDA guidelines to be fair to the insurance buyers. When purchasing a policy, you can check its authenticity by going through its terms and conditions.
As a two-wheeler insurance policyholder, you must know the guidelines set by the IRDA. While the guidelines mentioned above are the general set, you must read your policy document to understand your insurance plan better.