In India, most people own a vehicle, especially a two-wheeler, which helps them move around easily. Most people know how important two-wheeler insurance is. That is why they either purchase a long term two wheeler insurance online or complete their current bike insurance renewal online to keep their two-wheeler secure.
However, when buying a bike insurance policy, you should know about the regulations imposed by the Insurance Regulatory and Development Authority of India (IRDAI) for two-wheeler insurance policies in India.
IRDA Guidelines for Two-wheeler Insurance
The IRDAI bike insurance rules were established to safeguard the interests of both the insured individuals and the bike insurance providers. These regulations are detailed and precise — encompassing various aspects such as coverage types, inclusions, exclusions of plans and more.
These are the primary types of two-wheeler insurance coverage and their guidelines:
- Third-Party Liability Insurance
This type of insurance coverage is the most basic insurance policy available for motorcycles. As per the Motor Vehicles Act of 1988, all two-wheeler owners must have a third-party bike insurance policy. This coverage only applies to liabilities arising from injury, death, or property damage caused to a third party. Therefore, any damages to the bike owner and their insured bike cannot be covered under this policy.
Since this type of plan provides financial protection to the insured against third-party liabilities, as per the IRDAI bike insurance, the compensation will be provided by the insurer if the third party suffers death or injury. This amount will be determined based on the extent of loss or injury incurred by the third party.
In the unfortunate event of death, the compensation will be calculated based on the net worth of the deceased individual. Damages to a third party’s property will also be covered, with the compensation amount based on the extent of the damages.
- Comprehensive Insurance
Comprehensive bike insurance provides the legally-mandated third-party liability cover and own damage (OD) cover. The latter offers financial protection against accidental damage, damage resulting from natural or man-made calamities, and theft of your bike. Moreover, an online two-wheeler policy with comprehensive coverage can be enhanced with optional add-on covers for greater protection.
Per the IRDAI guidelines, the insurer will cover the cost of repairing or replacing bike parts damaged in an accident, as per the plan’s terms. If the bike is stolen or completely damaged (total loss), the insurer will compensate the insured based on the Insured Declared Value (IDV) of the two-wheeler.
This compensation will be provided for repairing or replacing bike parts damaged due to natural or calamities from human causes.
Insurance providers like Tata AIG offer long-term two-wheeler insurance policies that offer comprehensive coverage. These long-term policies offer great mental peace because they do not require annual renewal.
IRDAI Regulations for Personal Accident Cover
Personal Accident (PA) cover is a mandatory insurance policy that needs to be purchased separately when insuring your vehicle. It offers a lump sum payment in the unfortunate event of disability or death of the insured.
The sum insured under a PA cover can go up to ₹15 lakhs. Depending on the type of loss, a percentage of the sum insured will be paid as compensation by the insurer.
|Loss of limbs or eyesight in both eyes
|Loss of one limb or one eye
|Loss of one eye and one limb
New IRDAI Rules for Two-Wheeler Insurance
Since 2020, the IRDAI has had some new regulations in place for two-wheeler insurance:
- Penalty for Offences
If the penalty for a specific offence committed by a bike rider is not explicitly mentioned in the new rules, a fine of ₹500 will be imposed for the first offence and ₹1,500 for subsequent repetitions of the offence.
- Violation of Road Rules
Failing to comply with road rules will result in a penalty ranging from ₹500 to ₹1,000.
- Non-Cooperation with Authorities
Riders who fail to cooperate with authorities during legal proceedings will face an additional fine of ₹2,000 for non-cooperation.
- No Valid Driver’s Licence
Riding a bike without a valid driver’s licence will have to pay a fine of ₹5,000.
Riders who continue to ride a bike despite being disqualified will face a fine of ₹10,000.
Over-speeding while riding a bike will result in a fine of ₹1,000.
- Dangerous Driving
Engaging in dangerous driving practices will lead to a penalty of ₹1,000 and/or a maximum imprisonment term of 6 months.
Buying a bike insurance policy is paramount when you have a bike. However, apart from keeping your bike insurance valid with timely premium payments, it is also important to know how regulatory guidelines affect your policy.