How to Choose the Best Two-wheeler Insurance Policy?


Two-wheelers are extremely popular in India. They are inexpensive, easy to ride, and the best way to travel in the harrowing traffic of Indian roads. If you are looking to invest in a two-wheeler, you should know about the features and particulars of the insurance policy that you are planning to buy. Indian law has made it compulsory for every person with a two-wheeler to get a two-wheeler insurance policy. Insurance provides financial protection in case of any damage to your vehicle. 

There are many different types of two-wheeler insurance plans available in India today. In this blog, we have discussed them to help you decide which will be the best for you.

Types of Two-wheeler Insurance

  1. Standalone Own Damage Insurance: This policy covers most repair costs in case of accidental damage to the two-wheeler. Damage to the vehicle because of an accident, natural calamity, or a manmade disaster is covered under the insurance policy. This insurance is a recommended one and not mandatory.

The following things are typically covered under this insurance-

● Accidental damage

●  Fire and explosion

●  Natural calamities

●  Theft and malicious act

●   Manmade  calamities

●  Total loss

  1. Third-party Liability Insurance: Third-party liability insurance is compulsory for every two-wheeler owner to purchase as per the Motor Vehicles Act, 1988. This policy provides financial cover for damage to the vehicle/property of a third person caused because of an accident. It also provides cover for injuries of the third person.

The third-party liability usually covers the following:

●  Damage caused to the property of the third person: If your two-wheeler damages another person’s house, vehicle, or any other property, the insurance will cover the expenses.

 Personal injuries of the third party: If the third party sustains any injuries due to the accident, the insurance will cover the medical expenses. They also provide compensation in case of the death of a third party.

However, this insurance does not cover your losses and vehicle damage. That is why it is recommended to purchase a standalone own damage insurance policy to safeguard your interests.

  1. Comprehensive Insurance

A comprehensive insurance policy covers both types of policies. This means you will get your damage and third-party insurance in one plan. The policy covers damage due to theft, natural calamity, and damage during travel. However, it does not cover loss of personal belongings and loss caused if you were driving under the influence of alcohol and drugs.

Benefits of Taking an Insurance

Two-wheeler insurance has multiple benefits for the insured. Even if it was not made mandatory under the law, it is recommended to purchase it. Some of the benefits are-

  • Lower Financial Stress: A two-wheeler is an important asset. Losing it to any accident will not only add a financial burden but also cause emotional stress. However, having insurance that covers financial expenses can bring some comfort. Similarly, in case of an accident, you don’t have to worry about financial liability to a third party. The insurance will take care of it.
  • Personal Accidental Coverage: A two-wheeler insurance policy also provides cover in cases of permanent disability. In cases of death due to an accident, the policy also provides compensation equal to the amount sum assured. The nominee receives the compensation amount.
  • Legal Protection: As a bike owner, without an insurance policy, you will have to pay exorbitant fines, in case there is an accident that causes third-party loss or damage. Two-wheeler insurance can save you from paying that fine and offer legal protection.

Factors to Consider Before Purchasing an Insurance Policy: 

Just like you consider multiple factors before purchasing a two-wheeler, you should also consider several factors before taking a two-wheeler insurance policy. Some factors are

  • Premium amount: Premium is the amount you have to pay to avail the policy benefits. It depends on several factors, such as IDV, policy term, types of policy, and NCB. Since purchasing the policy is compulsory, determine the premium amount that works best for you.
  • Exclusions: Knowing what is covered by your insurance policy is crucial. However, knowing what is excluded from the policy is equally crucial. Before purchasing any policy, check which situations are excluded under it. Some common exclusions include regular wear and tear, accidents under the influence of any substance, and electrical breakdown.
  • Coverage: Coverage, or inclusions, are the situations under which an insurance company pays claims. The coverage list is mentioned clearly in the policy and should be carefully read before making any decisions. Common inclusions include fire damage, theft, natural and manmade calamities, and third-party damage.
  • Claim settlement ratio: The claim settlement ratio reflects how good and quick an insurance company is in settling claims. It is the ratio of total claims paid by the number of claims raised in a particular year.
  • Insured declared value: An insurer’s maximum claim payment is called the IDV. Several factors affect the amount, including the two-wheeler’s selling price and depreciation rate.
  • Number of partner garages: The number of partner garages your insurance company has is an integral deciding factor. A hassle-free experience would only be possible if your company has a greater number of partner garages. Remember, the more the number of partner garages, the better for you.

Add-ons for Two-wheeler Insurance

There are several two-wheeler insurance add-ons you can purchase for better protection. Since they are not mandatory, it is completely your decision to get them.

Zero depreciation cover: Depreciation is naturally occurring, and its cost is often borne by the owner. A zero depreciation cover allows you to make a bigger claim from your insured.

Roadside assistance cover: In cases of a flat tire, towing vehicle, or on-site repairs, you have to pay from your pocket. Roadside assistance cover allows you to claim these amounts from your insurer.

Loss of key: It’s easy to lose your bike keys. This cover allows you to claim the loss of key from your insurer. The insurer also ensures you receive a spare key as quickly as possible.

Purchasing two-wheeler insurance is an important decision. With so many options available in the market, it can be hard to choose the one that caters to your needs. Carefully examine your needs, and consider all the factors while purchasing one.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.