A bike insurance policy, at the end of the day, is a legal contract. It is a contract under which the policyholder promises to pay a certain amount of premium for a specified amount of time. In return, the insurance company promises to offer coverage as per the rules and extent of coverage.
Generally, a comprehensive bike insurance policy covers three things: the bike, the owner-driver and third-party liabilities. However, the wordings and nature of a policy are not always understood by the policyholder. Most people buy bike insurance because it is a legal mandate; they generally opt for the cheapest plan and get done with it.
However, that is not the right way to go about it. An insurance policy, including bike insurance, can get difficult to understand for the common people, which can lead to people buying wrong coverage.
So, to make it clearer and easier for you to choose the best bike insurance in India for your two-wheeler, we list down five common mistakes to avoid when buying insurance for your bike.
When purchasing an insurance policy for your bike, you must conduct extensive research about the different policies available in the market. Over the past few years, the insurance market has exploded, and you can choose from a host of two-wheeler insurance policies and providers. When you learn about the different policies available, you can compare them easily based on their features and how they suit your requirements.
You can use a bike insurance calculator to understand the premium amount. Good vehicle insurers and companies like Tata AIG provide bike insurance premium calculator on their websites.
Focusing solely on the premium price is a common mistake that individuals make when purchasing a two-wheeler insurance plan. While determining the total premium outflow is important to plan your finances and make funds available for your insurance policy, it should not be the number one criterion for choosing your bike insurance policy.
It is advisable to consider other critical factors like the coverage you will get from the plan, the additional features offered, the claim settlement ratio of the company, the claim settlement process, customer testimonials and after-sales service.
That does not mean that you do not consider the price at all. As mentioned in the previous point, use a premium calculator to calculate the approximate premium outflow based on the features offered by a company. Find a company that offers all the essential features at cost-effective prices and buy your bike insurance from them.
The Insured Declared Value or IDV is the current market worth of your bike – the invoice value minus the depreciation accumulated over the years. The IDV you choose for your bike when you buy bike insurance directly affects the premium. Higher IDV equals a higher cost of insurance.
As a result, when deciding on the IDV, you may want to go for a lower amount to get a lower premium cost. However, it is not the correct approach since the IDV is the sum assured of the policy. It is the amount you get when your bike gets damaged beyond repair or gets stolen. If you choose a lower IDV, the claim you get will also not be equal to the bike’s market value, leading to a loss in the long run.
Thus, make sure to choose the right IDV. You can go to any authorized dealership or vendor to get the current market value of your bike when finalizing the IDV for your insurance.
When purchasing the bike insurance policy online, it is imperative to go through the policy document’s fine print with a fine-toothed comb. As mentioned in the introductory paragraph, any insurance policy is a legal, binding contract between two parties – the insurer and the insured. The rights and liabilities of both parties are clearly mentioned in the document. The policy wordings are your best friend if your claim is denied or you face any other issues with the policy or the provider.
But many individuals overlook the terms and conditions and ignore the exclusion list in the policy. It can be quite dangerous as the benefit or coverage you wish for may lie in the plan’s exclusion list. This might result in your getting a lower claim amount or no claim at all.
Hence, you must learn about the exclusion, inclusions and other features of your policy. Reading the terms and conditions before making the decisions can be beneficial for you.
Deductibles in insurance are the proportion of the claim amount that the insurer agrees to pay by themselves. As logic states, the higher the deductible, the lower will be the premium, as it reduces the insurance company’s liability.
Also known as co-payment, deductibles can either be voluntary or fixed. When it comes to voluntary deductibles, a lot of policyholders opt for a higher deductible when buying two-wheeler insurance in India simply to save on the premium costs.
While this might save money in the short run, when the time comes to file a claim, it can cause a huge dent in your finances. Higher deductible means you will have to pay a higher proportion of the claim amount from your own pocket. And most of the times, this amount is significantly higher than the money saved on premiums.
So, make sure to assess your finances and choose a deductible percentage that is not too high or not too low – but just the perfect percentage!
‘Research – Compare – Buy.’
This should be the mantra for buying two-wheeler insurance in India for your bike. Assessing the bike insurance policies online based on the insurance coverage, premium amount, and benefits associated with each of them will help you make an informed decision.