An Overview of Two-Wheeler Insurance in India
In India, the preferred mode of personal transport for many is still a two-wheeler. In fact, there are several industries, the advancements of which have affected two-wheeler sales as well. For example, the growth of the e-commerce sector and the online food delivery industry has resulted in a greater demand for a delivery network that involves a lot of two-wheelers. With this kept in mind, it would not be wrong to say that two-wheeler insurance will be a growing segment for the industry. Apart from the protection that two-wheeler insurance offers, it is also compulsory under the Motor Vehicles Act, 1988, for all two-wheelers on Indian roads to be properly insured.
Types of two-wheeler insurance
Two-wheeler insurance policies in India can basically be divided into two types of policies, based on the coverage they offer. These are:
1. Third Party Insurance
This is the minimum coverage that a two-wheeler owner must opt for. Under this cover, the insured is protected against liabilities that may arise in an accident involving their vehicle where a third party is injured, dies, or incurs damages to the property.
2. Comprehensive Insurance
In addition to the third-party cover, a comprehensive policy also protects against own damage. At the same time, it also covers the vehicle against damage caused by acts of men or God.
Term-based two-wheeler plans
Based on the policy term, two-wheeler insurance policies can be further divided into:
1. Short term two-wheeler insurance
This plan is active for a year and must be renewed every year. The main features of this plan are: -
- Suitability: This may be more beneficial for older vehicles.
- Premium: Depending on market fluctuation, there is a possibility of a hike in premium every year.
- No-claim bonus: If you have not made any claim on the policy in the previous year, you are eligible for a no claim bonus at the time of renewal.
2. Long term two-wheeler insurance
This plan generally has a longer term. The key features of this plan are:
- Suitability: Best suited for newer vehicles.
- Premium: The premium is fixed for the entire term and you are free from market fluctuations.
- No-claim bonus: The terms for no claim bonus are slightly different from short term policies, but no claim bonus is applicable for long term policies as well.
- Hassle-free: You don’t have to worry about renewing your policy for at least 3 years.
Benefits of long term two-wheeler insurance
There are several advantages that come with long term two-wheeler insurance policies. Some of the key benefits are:
- No annual renewals.
- Free from fluctuating premiums during the term of the policy.
- Good terms for no-claim bonus.
Factors that influence the premium
The premium of the insurance policy is an important factor that you need to check before you purchase two-wheeler insurance. However, what a lot of people do not realise is that the premium of the insurance is actually affected by a number of the factors. This means that you may be able to influence the premium of the policy. Some of these factors are:
- Make and model of your vehicle.
- The volumetric capacity of your two-wheeler’s engine.
- Year of purchase.
- Your geographical location.
- Deductibles as defined by you at the time of purchase of the policy.
- Your age.
- Provision for no-claim bonus.
- Other add-ons like anti-theft devices and personal cover.
Purchasing a two-wheeler insurance policy
While the first two-wheeler insurance policy you get will be included by the dealership in the on-road price of the vehicle, it would be a good idea if you pay a little more attention at the time of renewal. In fact, for the first insurance policy too, you can opt to do research and buy your own plan. The best idea is to buy your two-wheeler insurance online as you can easily compare multiple plans and quotes to find the best suited insurance policy. The lower overheads of selling insurance online also allows the insurer to pass the benefits and discounts onwards to the customers.
The purchase of two-wheeler insurance being mandatory in India, it is best that you analyse different policies and make an informed purchase decision.