Ins and Outs of Financially Protecting Your Bike

When you own a bike, you need to manage the costs associated with it too. Here are some such costs:

Regular maintenance and upkeep of the bike – Depending on your use, you will need to renew the brake pads, air filter, oiling cables, levers, pivots, spark plugs, and get the clutch and drive chain adjusted. While most of these tasks can be done by you, if you are employing the services of a garage, then you will have to manage these costs.

Running costs – While you can purchase a bike that offers good mileage, you will have to bear the running costs like fuel, oil, etc.
Apart from the regular costs associated with running and maintaining the bike, you also need to be prepared to manage the costs associated with damages caused by accidents, collisions, natural calamities, man-made disasters, fire, and theft.
Hence, when you decide to purchase a bike, it is not just the cost of the vehicle that you need to plan for. You must also consider the running, maintenance, and emergency costs and create a plan for protecting your bike from such expenses.

While it is difficult to put a number on the amount you need to have to manage the costs associated with damages or injuries caused due to an accident, there are several ways of financially protecting your bike.

Create a bike savings fund

You can start putting some money aside every month to manage the costs arising from any unexpected incident involving your bike. You can keep the funds in a savings account, fixed deposit, mutual funds, shares, or any other financial instrument. However, you must remember that you will need the funds to be readily available when an emergency strikes.

Borrow for managing exigencies

Another way to handle such expenses is to maintain a healthy credit record so that you can take a loan when an emergency strikes. However, it is important to remember that loans charge interest. Hence, they should ideally be kept as the last option.

Buy a bike insurance policy

When you opt for a comprehensive two-wheeler insurance plan, the insurance provider offers coverage for both the third-party liabilities and damage to the insured bike due to an accident, disaster, fire, and theft.
In India, third-party insurance for 2-wheelers is a mandatory requirement. However, these plans offer coverage for third-party liability only. Any damage to the insured vehicle is not covered. Hence, it is important to opt for comprehensive insurance for 2-wheelers to avail of optimum bike protection.

At Tata AIG, we offer three types of bike insurance plans:

1.Third-party two-wheeler insurance – This is the mandatory policy that offers third-party liability protection only.
2.Standalone own-damage bike insurance – This is a bike protection cover that offers protection from costs incurred by damages caused to the insured bike.
3.Comprehensive bike insurance policy – This offers third-party liability cover and coverage for damages to the insured bike due to an accident, disaster (natural or man-made), fire, or theft.

With Tata AIG, you can purchase a bike insurance policy online within no time. We also offer a hassle-free process for bike insurance renewal online.

While you can prepare yourself financially to manage the exigencies associated with bike accidents and mishaps, a two-wheeler insurance policy is the best option for the following reasons:

• The Motor Vehicles Act, 1988 has made it mandatory for all bikes to have a minimum of third-party liability cover in India
• The premium amount is usually very low compared to the cost of repairs or part replacements
• Even if you create a corpus to manage exigent bike-related costs, with bike insurance, you can save money by purchasing a two-wheeler insurance policy
• If you don’t file a single claim during a policy term, then you can get a discount on your bonus while opting for bike insurance renewal online. This is called the No Claim Bonus, which increases with every subsequent year without filing a claim. Hence, over time, you can get the bike insurance policy at highly affordable premium rates

Opting for a comprehensive bike insurance policy is the most financially efficient way of protecting your bike. Your bike is exposed to various risks like accidents, theft, fire, and damages due to natural disasters or man-made disasters. The cost of repairs to your bike can burn a hole in your pocket. Also, if a third-party person or property gets damaged, then you will have to bear the liability costs too. However, with a comprehensive two-wheeler insurance plan, you can receive reimbursement for all such costs. Make sure that you go through the policy document and read the inclusions and exclusions carefully before signing the dotted line.

What is the law regarding bike insurance?

The law mandates all new bikes have a five-year third-party bike insurance policy. After five years, bike owners can opt for a shorter term. If you are planning to purchase a new bike, then you can also opt for a long-term comprehensive two-wheeler insurance policy that offers coverage for third-party liability and own-vehicle damage.

What is the premium of a bike insurance policy?

The Insurance Regulatory and Development Authority of India (IRDAI), declares the premium for third-party bike insurance every year. All insurance providers have to mandatorily offer third-party policies at the declared premium rates. The current rates for third-party two-wheeler insurance plans are:

• 0 < Engine capacity of your bike < 75cc: ₹538
• 75 < Engine capacity of your bike < 150cc: ₹714
• 150 < Engine capacity of your bike < 350cc: ₹1,366
• The engine capacity of your bike > 350cc: ₹2,804

If you are opting for a comprehensive bike insurance policy or a standalone own-damage policy, then the premium will depend on the IDV of your bike, its age, your location, deductibles, choice of add-on covers, and many other factors. You can use an online bike insurance calculator to estimate the premium based on your needs.