Tips for First Time Bike Insurance Buyers
- Author :
- TATA AIG Team
- Published on :
The world of finance can seem intimidating for individuals who are new to adulting. Thankfully, however, not all things are as complicated as they are believed to be. And one essential financial tool that has become easy to understand and convenient to buy is the two-wheeler insurance policy. Now, before we take a look at some ways to save money on bike insurance, let’s first establish a quick understanding of bike insurance and what it does for you.
What is an Insurance Policy for Bike?
In its simplest definition, it is a protective financial cover for your two-wheeler. This means if you end up in an accident, your two-wheeler insurance policy will cover you against the damages sustained to you, your vehicle, and the third party. An insurance company provides this service by charging the policyholder a premium that is payable every month. The premium amount is decided on certain factors such as the insured declared value, engine capacity of your vehicle, etc.
There are two types of bike insurance policies:
Third-Party Two-Wheeler Insurance: Under the third-party bike insurance cover, all financial liabilities for damages caused to the person, vehicle, or property by the insured vehicle are compensated. As per the Motor Vehicles Act of 1988, it is mandatory for every two-wheeler owner to have third-party bike insurance. It is important to bear in mind that your third-party bike insurance will not cover you for any damages incurred to your vehicle or yourself.
Comprehensive Two-Wheeler Insurance: As the term suggests, the comprehensive insurance policy for bikes provides more rounded protection. It does not only compensate for third-party damages but also covers damages to the insured vehicle and person. In addition to accident protection, the comprehensive two-wheeler insurance policy also protects the insured vehicle against a host of unpleasant scenarios such as theft, fire, natural calamities, and more. You can further enhance the protection of your vehicle with add-ons such as roadside assistance, emergency medical expenses for the rider as well as the pillion, etc.
It is always advisable to protect your vehicle with a comprehensive insurance policy for bikes because you cannot predict the future. Without comprehensive cover, an individual has to pay for all the damages incurred from their pocket, which could burn a sizeable hole in their savings.
Now that we understand the concept of an insurance policy for bikes, let’s explore some ways to save money on bike insurance.
Tips to Lower Bike Insurance
Among the various bike insurance tips for novice insurance buyers, the most important one is to be informed about your purchase. Here is how you can do just that:
Check the IDV of your vehicle: The insured declared value (IDV) is the maximum sum that will be paid to you by your insurance provider in case your vehicle is stolen or sustains total damage. It is always recommended to check the IDV offered by different insurance providers before you select a cover. Select the insurance provider offering the highest IDV.
Look for a wide garage network: One of the motorcycle insurance tips that is often neglected is to check the garage network of your insurance company. Here’s why: there are two ways in which you can raise a claim against your two-wheeler insurance policy, either cashless claims or reimbursement claims. In cashless claims, you need not pay anything from your pocket and can avail of it when you visit any network garages enlisted under your insurance provider. Therefore, a strong network of garages is a good sign. Tata AIG has a robust network of more than 7500 garages across India.
Compare bike insurance policies: One of the best tips for bike insurance purchases is always to compare different policies to find the right cover. Carefully analyse your insurance needs and find a cover that meets all these requirements. The above-mentioned motorcycle insurance tips are for the research aspect at the time of seeking bike insurance. In the following section, we will explore bike insurance tips to lower the premium payable:
Opt for a higher voluntary deductible: When you raise a claim against your bike insurance, a certain amount is paid by you, and the remaining is paid by your insurance provider. The compulsory deductible that the policyholder is expected to pay on their two-wheeler insurance is ₹100, and it is fixed by the Insurance Regulatory and Development Authority of India (IRDAI). However, if you increase the voluntary deductible, your bike insurance premium becomes cheaper.
Here’s an example to understand the voluntary deductible: Consider that you choose a voluntary deductible of ₹2000 for an annual premium of ₹3000 on your bike insurance. This means if your damages come up to ₹12,000 you will pay ₹2000 along with the compulsory deductible and the rest will be payable by your insurance provider.
Accumulate the no-claim bonus (NCB): The NCB is a discount offered on your bike insurance premium when you don’t raise a single claim during the policy term. If you don’t raise a claim for five consecutive years, your insurance provider can offer you as much as a 50% discount on your bike insurance premium. Accumulating the NCB is one of the best tips to lower bike insurance premiums.
Choose a long-term bike insurance policy: This is one of the bike insurance renewal tips that novice insurance seekers don’t commonly know of. When you choose long-term two-wheeler insurance, you can save money on the annual premiums. It also protects the NCB, which can be lost if you don’t renew your policy on time.
Buy 2-wheeler insurance online: No list of tips for bike insurance purchase is complete without explaining the benefits of buying 2-wheeler insurance online. In addition to being convenient and enabling easy comparison of bike insurance policies, buying 2-wheeler insurance online also helps save on the premium payable. This is because you purchase insurance directly, thereby saving the intermediary costs. Additionally, insurance providers believe that the mortality risk of online insurance buyers is lesser as compared to offline buyers and therefore offer a discount on premiums.
When buying insurance, it is important to be aware of each of the facets involved. Insurance seekers need to carefully read the policy documents with the inclusions and exclusions of the cover so they are not unpleasantly surprised at the time of raising a claim. It is also important to analyse your insurance needs and find a policy that is most suitable.