Why is it Mandatory to Buy a Bike Insurance Policy in India?

ATK
New Delhi [India], September 14: Bike insurance is more than just a legal requirement in India; it safeguards the rider and others on the road. With over 460,000 accidents and 168,491 fatalities reported in 2022, it's clear that riding a two-wheeler comes with some inherent risks. The government mandates at least third-party insurance under the Motor Vehicles Act of 1988 to mitigate these risks and provide a safety net for all parties involved in road mishaps.
Why is bike insurance mandatory, and how does it protect you? Let's dive deeper to understand its importance.
The Legal Foundation: Why Bike Insurance is Mandatory?
India's traffic regulations make third-party bike insurance compulsory for every rider. This requirement stems from the high rate of accidents and the need to protect innocent third parties from financial burdens resulting from accidents they did not cause. Here's why bike insurance is a must:
1. Legal Compliance
To legally ride a two-wheeler on Indian roads, you must have at least third-party insurance. The Motor Vehicles Act of 1988 enforces this mandate to ensure that every rider can cover the expenses associated with injury caused to third parties or damages to their properties. Failure to comply can result in heavy fines or even imprisonment. This policy ensures that those affected by accidents receive due compensation without financial stress.
2. Protection Against Legal Liabilities
In the unfortunate event of an accident where a third party is injured, or their property is damaged due to your bike, you are legally responsible for compensating the affected party. Third-party bike insurance covers these liabilities, protecting you from paying out of pocket for these expenses. Without it, you could face severe financial consequences and potential legal action.
Types of Bike Insurance in India
Understanding the types of two-wheeler insurance available can help you make an informed decision:
1. Third-Party Two-Wheeler Insurance
This is the most basic form of insurance required by law. It covers any injury caused to third parties and damages to their properties in an accident involving your bike. For example, if your motorcycle collides with another vehicle or pedestrian, this insurance will cover the compensation amount for the damages or injury. Pillion riders are also covered in this policy. However, it does not cover damages to your vehicle.
Following a Supreme Court ruling in September 2018, the IRDAI mandated that all new two-wheelers have a 5-year insurance cover. This aims to ensure that more bikes remain insured, reducing instances of lapsed or expired policies and uninsured vehicles. However, the 5-year cover requirement applies only to third-party (TP) bike insurance policies.
2. Comprehensive Bike Insurance
Comprehensive bike insurance offers broader protection. It covers both third-party liabilities and damages to your own vehicle. This policy is highly recommended as it provides coverage for a wide range of incidents, including theft and damages from accidents, natural disasters, and man-made calamities like riots or vandalism. It also includes a personal accident cover for the rider and the pillion passenger, ensuring a higher level of protection.
3. Standalone Own Damage Insurance
This type of insurance covers damages only to your vehicle. It is suitable for those who already have third-party insurance but want to protect their bike from theft and damage due to accidents or disasters. It offers flexibility to the policyholder to choose the cover that best suits their needs.
What Does a Two-Wheeler Insurance Policy Cover?
The extent of coverage depends on the type of insurance policy:
1. Third-Party Bike Insurance
* Legal Liabilities: Covers damages or injuries caused to a third party. The insurance compensates the affected party for medical expenses, vehicle repairs, or property damage.
* Personal Accident Cover: Provides a fixed sum in case of permanent disability or death of the insured rider due to an accident.
2. Comprehensive Bike Insurance
- Own Vehicle Damage: This covers damage to your bike due to natural calamities like floods, earthquakes, or man-made disasters such as riots.
- Theft Protection: Compensates you with the current market value if your bike is stolen or damaged beyond repair.
- Accidental Cover for the Rider: Covers medical expenses resulting from an accident and provides compensation in case of permanent disability or death.
Why Opt for Comprehensive Bike Insurance?
While third-party liability cover is mandatory, opting for comprehensive vehicle insurance offers additional benefits. Let's explore why a comprehensive plan could be more beneficial:
1. Wider Coverage
Comprehensive bike insurance provides coverage not just for third-party damages but also for your own vehicle. Whether your bike is damaged in an accident, stolen, or affected by natural disasters like floods or earthquakes, this policy ensures you're financially protected. Given the unpredictable nature of accidents and other incidents, having a comprehensive policy offers peace of mind.
2. Personal Accident Cover
A comprehensive plan includes a personal accident cover, which provides compensation in the event of a permanent disability or death of the owner rider in a bike accident. This financial support can be crucial for the dependents.
3. Add-On Benefits
Comprehensive bike insurance also allows you to enhance your coverage with add-ons. These include zero depreciation cover, roadside assistance, engine protection, and more. Each add-on serves a specific purpose and helps in further minimizing out-of-pocket expenses in case of a claim.
4. Protection from Man-Made Disasters
The risk of man-made disasters, such as riots or vandalism, cannot be ignored. A comprehensive policy protects you from losses incurred due to these events, ensuring you're covered for various potential threats.
How Does Bike Insurance Protect You?
Bike insurance plays a vital role in safeguarding your financial health and offering peace of mind. Here's how:
1. Covering Legal Liabilities
In case of an accident involving a third party, you are legally liable for the damages caused. The insurance policy covers the compensation, preventing you from having to pay large sums from your savings. Moreover, by adhering to legal requirements, you avoid fines or imprisonment, which could arise from riding an uninsured bike.
2. Securing Financial Expenditure
Comprehensive bike insurance protects you against the costs of repairs and replacements arising from damages caused due to natural disasters, theft, or accidents. This coverage ensures you don't have to bear the financial burden alone, preserving your savings for other needs.
The Financial Implications of Not Having Bike Insurance
Failing to have at least third-party insurance can result in heavy penalties, potential imprisonment, and severe financial consequences in the event of an accident. You might also face challenges covering medical expenses and other vehicle or property damages. Thus, bike insurance is a legal formality and a financial safety net that provides critical protection.
Tips for Purchasing Bike Insurance Online
When buying bike insurance, consider the following:
1. Compare Plans: Evaluate different insurance providers and policies to find the one best suits your needs.
2. Check Coverage: Ensure the policy covers all potential risks you might face.
3. Consider Add-Ons: Add-ons like zero depreciation or roadside assistance can provide additional protection.
4. Read the Fine Print: Understand the terms and conditions to know what is covered and what is not.
Conclusion
Bike insurance is a legal mandate in India, but its importance goes beyond mere compliance. It provides essential protection against financial losses and legal liabilities. Comprehensive bike insurance offers even broader coverage, ensuring you and your bike are protected from unforeseen incidents. With the growing number of road accidents, investing in two-wheeler insurance is not just a legal requirement but a smart financial decision. To ensure road safety and financial security, every rider must consider buying the right bike insurance policy.
Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.
(ADVERTORIAL DISCLAIMER: The above press release has been provided by ATK. ANI will not be responsible in any way for the content of the same)