Five-Point Insurance Checklist for New Bike Owners in 2019

The second half of a calendar year is generally a good time to purchase a bike. There are a host of festivals during the third and fourth quarter of the year. As a result, a lot of brands launch new bike models and offer alluring discounts during this period. If you are looking to cash-in on such offers and get yourself a sparkling two-wheeler, do not forget to purchase a suitable bike insurance policy along with it.

Insuring your two-wheeler is mandatory as per The Motor Vehicles Act, 1988. And while you are at it, it is better to opt for extensive coverage and stay insured against bike-related perils. Recent guidelines stated by the Insurance Regulatory and Development Authority of India (IRDAI) make it even more important for you to make an informed decision. Read ahead to know five crucial pointers that will help you to make a wise choice regarding purchasing a wide-ranging insurance cover for your bike.

5 Things to Consider While Insuring New Bike

  1. Long-term Policy

    If you were to purchase bike insurance for a new two-wheeler before September 2018, you had the option to choose an annual policy or a multi-year policy. Now, all new bikes must be covered under a long-term Third-party Liability policy. This long-term period amounts to five years.

    The rates for such a policy are prescribed by IRDAI. Therefore, they are standard across insurers. Note that because it is a five-year policy, you will have to pay the premium for the entire period up front. The positive side to this is that you will be immune to price-hikes and renewal hassles during this period.

  2. Own Damage Cover

    Third-party Liability cover is not wide-ranging. It is a limited cover, primarily designed to support third parties that might be affected by bike accidents. It is suggested to opt for an Own Damage cover to insure your bike against calamities, fire damage, theft, etc.

    There is no five-year compulsion regarding Own Damage cover. You have the option of buying it for a year. Its price is decided by insurance providers; thus, it varies across companies. The premium for Own Damage cover can be on the higher side if you choose to go for a long-term plan.

  3. Add-on Covers

    You have the option of strengthening your bike insurance policy by opting for suitable Add-ons. These Add-ons will increase the payable premium amount; however, they will also offer extra insurance cover regarding situations that are usually not covered under basic bike insurance policies.

    All insurers might not offer all Add-ons. Whereas, some might bundle one or two in their Own Damage cover. Only go for those Add-ons that are truly relevant to you. For example, buying a Pillion Rider Cover will not be fruitful if you ride solo most of the time. Here’s a table with popular Add-ons and their weightage as per importance.

    Add-on Weightage
    Zero Depreciation High
    Roadside Assistance Moderate
    Pillion Rider Cover Low
    No Claim Bonus Cover Low
    Engine Protection High

    Note that this is a generic representation; the importance of Add-ons is highly case-specific.

  4. Personal Accident Cover Update

    The Personal Accident Cover got two major updates in the recent past. This mandatory cover got upgraded from Rs. 1 lakh to Rs. 15 lakhs with a marginal increase in the premium.

    It was also unbundled. Which means, if you already own an active Personal Accident policy, you need not buy it twice. Earlier, it was packaged with a Third-party Liability policy and policyholders ended up with double covers (without any additional benefit) in case of two bikes.

  5. Bike Insurance Online

    Usually, new bike owners simply go ahead with the bike dealer’s suggestion concerning insurance. However, that might not be productive all the time. It might be convenient but can prove to be unfruitful and expensive. Alternatively, bike owners should check two-wheeler insurance policies online for availing extensive coverage at a low price.

    Taking control of your bike insurance policy can help you to not only get adequate cover but also save money by negating unnecessary coverages. Understand your bike’s insurance cover and purchase a policy that meets your requirements.

Analyze & Buy, Review & Renew

The first step concerning bike insurance is to analyze your necessities. This will tell you what kind of cover you need. Also, comparing bike insurance policies is a good idea. It can help you to shortlist options and finalize your policy. Choose a credible insurer and opt for an insurance policy that offers the desired coverage in an affordable manner.

Bike insurance is time-bound. Every policy comes with an expiry date and if you want to stay on the right side of the law, it is better to renew your bike insurance policy before it expires. Review your policy before renewing it. You can switch insurers if you are not happy with the previous one or if you find a lucrative deal elsewhere. Nowadays, digital insurers are offering comprehensive bike insurance policies at low prices in a convenient manner. Going digital is a hassle-free way of insuring your bike.

Views expressed in this article are the personal opinion of Animesh Das, Head of Product Strategy, ACKO General Insurance.

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