Bike Insurance Background Checks
- Author :
- TATA AIG Team
- Published on :
You must be aware that a bike insurance policy is mandatory to ride a two-wheeler in India. However, with an increasing number of motorcycles on the road and the establishment of various insurance companies, the number of insurance-related fraud cases is on the rise. Fake claims, money laundering, and other issues have prompted bike insurance providers to conduct background checks.
Why Two-wheeler Insurer Conducts a Background Verification?
Mandatory by law
According to the Insurance Regulator and Development Authority of India (IRDAI), no insurance company can provide coverage without complying with the anti-money-laundering regulations and Know Your Customer (KYC) norms. These regulations mandate insurers run a background check to see if the applicant is genuine.
You may have heard of cases where policyholders shared incorrect information to lower their policy premium. Some of these include concealing previous accident reports, failing to disclose aftermarket modifications, and so on. Sometimes, policyholders mention higher repair costs in order to receive a higher claim reimbursement amount. Insurance companies conduct bike insurance background checks online to protect themselves from such frauds.
Many policyholders make a fake case of bike theft and report it to the police station to obtain a non-traceable report. They then furnish the same to the insurer to recover a hefty claim amount. Such deception is a serious crime that carries a prison sentence.
*Customise products *
Insurance companies also conduct background checks to understand their customers’ requirements better. The numerous data points provided by different policyholders regarding claim type, personal information, etc., assist them in developing a customised product and providing better services.
Genuiness of a third-party claim
In the event your bike damages third-party property, they raise a claim against your policy. In a third-party liability policy, the likelihood of fraudulent claim filings is much higher. To avoid false claims, bike insurers must conduct a KYC check on the third party.
How is the Bike Insurance Background Verification Process Carried Out?
Whether you purchase comprehensive insurance, standalone own damage coverage, or third-party liability insurance for a 2-wheeler, your insurer may conduct a series of investigations before providing coverage. Here is the list of them.
Details about the policyholder
Your two-wheeler insurer will review any personal information or documents you provide under the bike insurance background verification process. They do this to confirm your identity and authenticity and to avoid any conflict during the claim settlement process. For example, during this process, the insurer may cross-check your PAN information with the Income Tax Department. They may also check other documents provided by you with the appropriate authorities.
Reports of credit score
Many people believe that credit scores only matter when borrowing money. However, it is also an important document for insurance companies. Your credit score informs financial institutions about your financial health. It informs them about how you manage your expenses. A low credit score may lead insurers to believe that you may file fraudulent claims in the near future. Insurance companies collect your credit information from credit bureaus such as CIBIL, CRIF High Mark, etc.
The background verification process also includes gathering information about previous offences. Insurers are curious to learn about offences such as fraudulent claims, vehicle theft, and the preparation of fake papers. These factors give insurers reason to believe that a policyholder with such a criminal record will commit the same crime again, resulting in a financial loss to them. Under this step, the insurer might collect the information from your residence's nearest police station, workplace, etc.
Another crucial consideration in bike insurance background checks in India is driving history. During this stage, your insurer makes an effort to learn about your driving abilities. It will inform them if the vehicle required for insurance has been involved in an accident in the past. If the bike is involved in a road accident, the insurer attempts to determine the extent of the damage in the past.
Your driving history plays a vital role in determining the premium amount. In this stage, the insurer might ask you to provide a service record book.
Things to Check When Choosing a Two-wheeler Insurer
You now understand why insurers conduct background checks and what they look for. It's time to figure out the most vital factors for you as an insurance buyer.
You must carefully review your insurer's policy inclusions and exclusions. The maximum coverage for various scenarios may differ depending on the insurer. For example, the amount of travel allowance may vary when the bike is in the garage for repairs.
*Claim settlement ratio *
It is the crucial factor that informs you about the insurance company’s credibility. The claim settlement ratio is the percentage of claims settled by the insurer out of all claims filed during the year. Avoid selecting an insurer with a low claim settlement ratio.
Claim settlement process
What if your insurer has the industry's best claim settlement ratio, but it takes months to reimburse the claim amount? You would despise doing transactions with them. Check to see if the insurer provides an online option for filing a claim. Read customer reviews to get an idea of how quickly they settle the claim.
Network garage allows you to get repair and replacement services done without spending anything from your wallet. Check the list of network garages in your city before deciding on an insurer. You don't want to buy a policy from an insurer with thousands of network garages but none in your city.
Customer service should be an important factor in your decision. Assume your motorcycle is involved in an accident at midnight on a lonely highway. You keep trying to contact your insurer's executive but are unable to get help. What would you do in such a situation? Who will assist you in having your bike towed to the nearest garage? To avoid such situations, ensure that your insurer provides prompt customer service.
Check the add-ons
Add-ons increase policy coverage in exchange for an additional premium. Check the list of riders provided by any insurer before settling on a perfect insurer. You must also evaluate the provisions on such add-ons to ensure smooth claim processing in the future.
Riding with a lapsed policy is regarded as riding without insurance cover. Even if your policy is in the 30 days grace period, you will not receive any claim benefits. Assume your policy expired a few days ago, and you requested a renewal from the insurer, but they have yet to activate the policy benefits. If your bike sustains any loss during this period, the insurer is not liable for the compensation. Thus, choosing an insurer that offers instant coverage with a few clicks on the mobile screen is crucial.
Background checks are critical for preventing money laundering and detecting fraudulent claims. However, just as your insurer verifies your profile, you must conduct a background check on the insurer by reviewing their claim settlement ratio, claim filing process, and so on. But is the bike insurance background check online possible? It depends on your insurance provider, and you should confirm with them about the process.
We would also suggest you get insurance for 2-wheelers from Tata AIG, where you can compare two-wheeler insurance policies to understand the best options for you. We have all types of vehicle insurance, offering 360-degree protection for your cars and bikes.