Ways in Which Your Bike Will Impact Its Insurance Cover
- Author :
- TATA AIG Team
- Published on :
Bike insurance is an essential investment that can safeguard you from financial and legal liabilities during an accident or mishap. It is a mandatory requirement in India. According to the Motor Vehicles Act, 1988, every two-wheeler needs to have at least a third-part liability bike insurance policy to be registered in the country. This means that if you do not have two wheeler insurance, then you will not be able to register and use your bike in India.
Understanding Bike Insurance Cover
There are different types of policies offering Insurance for 2 Wheeler:
- Third-party liability policy
- Standalone Own Damage policy
- Comprehensive Two Wheeler Insurance policy
A third-party policy offers coverage for damages to third-party property or injuries to a third-party person(s) due to an accident involving the insured bike. In simpler words, if your bike causes an accident that results in the property of a third-party getting damaged or injuries to a third party, then you are liable to compensate for the losses. With the mandatory third-party two wheeler insurance policy, the insurer takes care of all the legal and financial liabilities arising out of such a situation.
However, when you opt for a Standalone Own Damage policy or Comprehensive Bike Insurance policy, then the insurer offers coverage for your bike too. Hence, the company will offer an insurance cover based on various aspects of your bike as described below.
5 Ways in Which Your Bike Impacts its Insurance Cover
An insurance company considers a range of factors to assess the risks associated with providing coverage for your bike. Five such bike-related factors are:
- Manufacturer of the bike
The popularity and demand of the bike manufacturer play a crucial role in determining the bike insurance cover. For example, buying a Harley Davidson or BMW bike is a dream for most Indians. The brand value attracts people and results in the high price of bikes offered by these brands. Since the market value of the bike is more, its Insured Declared Value (IDV) will be higher, resulting in a higher sum insured and a higher premium compared to other bikes. Hence, the manufacturer of the bike has a direct bearing on its insurance cover.
- Model of the bike
Even if a particular bike manufacturer is highly popular among bike lovers, not all bikes leaving their stables will have high demand and/or prices. Insurers will look at the market value of the bike model that you choose to buy and calculate the insurance cover and premium accordingly.
- Engine Capacity
This is one of the most important aspects of your bike that impacts its insurance cover and premium calculation. The Insurance Regulatory and Development Authority of India (IRDAI) declares the premium for third-party two wheeler insurance policies based on the engine capacity of the two-wheeler.
Further, even if you look at comprehensive plans, you will find that as the engine capacity increases, the premium rates increase. Hence, the engine capacity or cubic capacity (cc) of a bike plays a key role in determining the two wheeler insurance cover.
- Age of the bike
A bike is a depreciating asset that loses value with time. When an insurance company offers a bike insurance policy quotation, it factors in the age of the bike to estimate depreciation. An older bike will have a lower sum insured due to depreciation and hence will cost lower than a newer bike of the same make and model. Hence, the age of the bike also has a direct impact on its cover and premium.
- Insured Declared Value (IDV)
Apart from the manufacture, make, and model of the bike, its market value is determined by a range of factors. The insurance company looks at the current market value of the bike and offers it as the sum assured to potential policyholders. This is the Insured Declared Value or IDV of the two-wheeler. The IDV is the maximum compensation that the insurer will pay in the event of the theft of the insured bike or a total loss/constructive total loss. While calculating the claim amount, the insurer will factor in depreciation and deductibles too.
Usually, insurance companies allow policyholders to reduce the IDV to get a discount on the premium. It is important to choose this carefully since a lower IDV means a lower sum insured and a lower total loss payout.
Tata AIG offers a range of options in insurance for 2 wheelers to bike owners. You can opt for the third-party liability-only policy, standalone own damage bike insurance policy, or comprehensive two wheeler insurance policy as per your needs. You can also compare two wheeler insurance on our website and use our bike insurance calculator to get an estimate of the premium before making the purchase.
Tata AIG offers a simple and hassle-free process for buying and renewing two wheeler insurance online. You can also benefit from our wide network of cashless garages, a 24x7 support team, and an efficient claim process. You can also choose from a list of add-ons which will give your bike full cover insurance.
Disclaimer / TnC
Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.