KYC Norms in Two-Wheeler Insurance
- Author :
- TATA AIG Team
- Published on :
When buying a bike insurance policy for your two-wheeler, you may have often wondered why it is important to provide documentation for the purchase of the same. This is simply because financial agreements/contracts and transactions should be recorded and documented. As the policyholder and the customer, a record of your preferences and your expectations from the insurance policy can be safely stored with your insurer. And this is where the KYC or Know Your Customer process comes in.
KYC (Know Your Customer) norms is the process of verifying a customer's identity to ensure that they are who they claim to be. KYC norms are an essential aspect of the insurance industry as they aid in reducing the risk of fraudulent activities and help insurance companies comply with legal requirements.
In the context of insurance for a 2 wheeler, KYC norms play a crucial role in verifying the identity and address of the policyholder. This is important as it helps insurance companies ensure that the policyholder is eligible for the insurance policy and helps reduce the risk of fraudulent claims. Additionally, the KYC process enables insurance companies to comply with legal requirements such as the Prevention of Money Laundering Act (PMLA).
Definition of KYC Norms in Insurance
KYC in insurance means verifying the customer’s address and identity before purchasing any insurance products or services. KYC norms verifies the applicant’s identity, address and other relevant details to reduce the risk of fraudulent activities such as identity theft and money laundering.
Insurance companies must comply with KYC norms per regulatory requirements to provide a safe and secure environment for their customers. The process typically involves the collection of certain documents, including government-issued identity proof and address proof.
The insurance company verifies the documents, and the customer's identity and address are cross-checked with the details they provided during the application process.
Importance of KYC Norms in Insurance
KYC (Know Your Customer) norms are vital in the two-wheeler insurance industry. The importance of KYC norms in two-wheeler insurance can be attributed to the following reasons:
Verification of identity and address: Insurance KYC norms ensure that you, the customer/policyholder, have provided the correct and authentic personal details and are not impersonating anyone else. It also works the other way around **no one else will be able to purchase a policy under your name and with your details.
Reduction in fraudulent claims: By verifying your identity and address, the KYC norms can help your insurer reduce the risk of fraud. By verifying your authenticity, no one else can file a claim under a policy you have purchased and paid for.
Compliance with legal requirements: KYC norms help insurance companies comply with legal requirements such as the Prevention of Money Laundering Act (PMLA). Insurance companies must follow KYC norms per regulatory requirements to offer a safe and secure environment for their customers.
What is the Process of KYC verification in Two-wheeler Insurance?
Here are a few easy steps to complete the KYC verification process when buying insurance for a 2 wheeler:
Submit documents: Provide valid identity proof (issued by the government) such as an Aadhaar card, driving license, or passport, and address proof such as an electricity bill, telephone bill, or bank statement.
Wait for verification: Give some time to the insurance company to verify all the documents you have submitted online.
Confirmation: Once the verification is completed successfully, your insurer will contact you and confirm the completion of the KYC process.
During KYC verification in two-wheeler insurance, you may come across certain challenges. They could be:
Invalid Documents: The insurance company may reject the documents submitted if they are not valid or have errors. Be sure to get a list of the exact and updated documents required to complete the process.
Delay in verification: There may be a delay in the verification process due to a high volume of applications or other technical issues. You can contact your insurance provider's customer care team to understand why the delay has occurred or ask them for a tentative timeline.
Physical verification: In some cases, your insurance company may require physical verification of the documents. You may have to visit any of their office branches or a representative may come over to your registered address, as provided in the proof of address.
However, the KYC process is generally quite hassle-free and quick!
What are the Advantages of e-KYC Verification?
e-KYC (Electronic Know Your Customer) is a digital process of verifying a person's identity using electronic means. Here are some of the advantages of e-KYC verification:
- Faster processing time:** e-KYC verification is a quick process that takes less time than the traditional paper-based process. This is because there is no need for physical documents to be delivered; you can simply upload the documents.
More accessible: e-KYC verification can be done remotely, making it simpler for customers to opt for and complete the verification process. Therefore, no matter which part of the country you are in, with the help of your smartphone or laptop, you can simply upload soft copies of your KYC documents.
Greater security: With the help of advanced security measures, which include data encryption, data protection as well as biometric authentication, it is possible to keep your details secure. Therefore, even though you may provide your personal information, it will be protected from unauthorised parties.
Cost-effective: In e-KYC verification, the cost of storing and processing the documents manually is eliminated. This effectively reduces the cost of the overall KYC process. You also need not opt for in-person verification, which helps your insurance company save some labour costs.
Environmentally friendly: Since the whole KYC process is electronic and does not require the use of physical documents, you can contribute towards a greener environment.
Enhanced customer experience: The customer care team of the insurer can simply look into the verification of the documents soon after you upload them. This enhances the overall customer experience and reduces the hassle associated with traditional KYC verification methods.
Buying your bike insurance policy becomes easier when you buy the policy online. With Tata AIG, not only can you make the purchase, complete the renewal and file a claim for damages online but you also complete the eKYC process swiftly. Online purchase also means that you can compare two wheeler insurance before buying a suitable policy.
As seen above, the entire eKYC process is well-regulated, secure, and convenient. By following the insurance KYC norms, you can easily purchase your bike insurance policy and not worry about gathering and submitting physical copies of your documents.
Disclaimer / TnC
Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.