The insurance sector in India is regulated by IRDAI or Insurance Regulatory and Development Authority of India. It is the apex body that ensures the interest of policyholders in the country. Whether it is life insurance or a general insurance cover, it oversees the guidelines and lays down rules for all. The non-life or general insurance segment includes motor insurance policies that state the various regulations for a bike insurance policy.
Need for guidelines for insurance plans
The primary purpose of laying down rules and regulations is to maintain affinity between the insurance company and you, the policyholder. Since insurance is a contract to indemnify the losses, these rules oversee whether no parties profit from such a transaction. Hence, the insurer is advised to follow guidelines during the tenure of the policy to avoid any legal consequences. Let us look at a few rules about 2 wheeler insurance plans.
Rules governing the Type of Coverage
There are two types of policies that you can buy- third-party and comprehensive plans among whom the coverage differs significantly.
Third-party insurance
- Insurance companies provide monetary compensation for damage or injury to third-party due to the insured bike.
- The amount of damage or injury will be considered while paying the compensation subject to a capping of ₹7.5 lakhs in case of property damage.
- Further, there is a compensation to the driver of the insured bike in case of death or injury.
Comprehensive insurance
- Comprehensive insurance plans compensate third-party as per the above-mentioned rules. Additionally, the following rules are applicable –
- Comprehensive plans include personal accident coverage for the owner as well as the driver.
- The insurance company bears the cost of repairs or damages as per the terms of your policy.
- Coverage under the comprehensive policy includes theft or complete damage along with any damage due to natural and man-made perils.
- Additional coverage can be opted when buying a comprehensive cover at initial purchase or at time of two wheeler insurance renewal.
Rules for Personal Accident Cover
A personal accident cover is mandatory add-ons that are required with all types of policies. The maximum amount of sum assured is ₹15 lakhs for death or disability of the owner. This add-on offers compensation upto 50% for loss of an eye or limb of the sum assured whereas 100% for other injuries including death.
Rules about Policy Exclusions
The following are the rules pertaining to exclusions for your policy –
- Any damage due to consequential loss, routine wear & tear, damage due to age and mechanical breakdown isn’t covered under the scope of the policy.
- Few insurance companies offer half of the total cost of replacement cost for damage to the tyre and tubes.
- The policy doesn’t cover for any damages that occur out of the specified geographical area.
- Also, cases where the rider isn’t carrying a valid driving license or the rider being under an influence of intoxicating substances fall under the exclusions of the policy.
These are some essential guidelines to remember for a bike insurance policy. Not only will they help you make the right buying decision, but also ease the insurance claim process.
