Do You Need Bike Insurance in India? Complete Guide

Road accidents are unavoidable in India. Despite government investments to improve road infrastructure, accidents have been on the rise. The alarming rise in accidents calls for strong measures to curb them. Therefore, two-wheeler insurance policies play a significant role in such scenarios.

To legally ride a bike, third-party bike insurance is mandatory in India. However, many ask, “Is bike insurance compulsory in India?” for their own damage and comprehensive policies. Even if it is not legally mandatory, it is advisable to get these to avoid financial implications. An uninsured bike can land in legal trouble with significant penalties. This article explores why bike insurance is mandatory in India.

Important Tips for Buying Two-Wheeler Insurance

When buying an insurance policy for bike, it is crucial to consider the following:

1. Consider the Coverage: Before choosing a policy, understand the coverage it provides. Usually, there are two types: comprehensive and third-party. A comprehensive bike insurance policy will offer protection for your own damage and that of third parties, too. On the other hand, a third party will offer coverage only for third-party damages. 2. Cubic Capacity: The cubic capacity of your bike has a significant impact on the premium. If your bike's cubic capacity is high, you'll pay a higher premium, and vice versa. 3. Price: Always check the policy price. Since IRDAI has made third-party bike insurance mandatory for all, the premium is often fixed. However, for a comprehensive policy, pricing may vary based on your coverage and add-ons. However, do not make premium price the only factor; make sure to understand coverage benefits as well. 4. Insured Declared Value: Always understand the concept of insured declared value before finalising on the bike insurance policy. The insured declared value refers to the maximum amount you can claim in case of total loss or theft of the vehicle. The IDV is usually fixed at the time of policy purchase, so make sure to review the requirements carefully before making a decision.

How Does Bike Insurance Protect You Financially and Legally?

Your bike insurance acts as a safety net, thereby offering financial and legal protection. It protects you against unforeseen circumstances. Third-party bike insurance provides legal compliance by covering third-party liabilities.

The standard bike insurance policy offers protection against theft and own damage. Furthermore, you can also include add-ons for your comprehensive two wheeler insurance, like the following:
1. Zero Depreciation Cover
2. No Claim Bonus Cover
3. Engine Protection Cover
4. Roadside Assistance

In the event of an emergency or unforeseen circumstances, these covers would provide significant financial benefits. Therefore, you wouldn't have to pay for the repairs out of your pocket.

Third-party insurance will offer protection against third-party liabilities. Having third-party bike insurance mandatory according to the Motor Vehicles Act, 1988. Therefore, it protects against legal liability if your bike causes injury, property damage, or the death of a third party.

Moreover, carrying a policy also saves you from unwanted penalties and fines. In the event of a lawsuit arising from an accident, the insurance provider will also provide coverage for legal defence in court.

What Does a Two-Wheeler Insurance Policy Cover?

The bike insurance policy offers coverage against a wide range of risks. These include:

1. Damage or injury caused to the insured due to an accident. 2. Damage caused by natural disasters such as earthquakes, floods, or storms. 3. Damage due to man-made activities such as vandalism, theft, strikes, and riots. 4. Damage to the third party causing injury, death or permanent disability.

In the event of a lawsuit by a third party, the insurance company will also provide legal representation.

What to Check Before Opting for Bike Insurance?

Many often question “is bike insurance mandatory in India?” and what to check before buying. While third-party two wheeler insurance is mandatory, it is a smart idea to get your regular bike insurance as well.

Here are some of the key things to check before opting for a bike insurance policy in India:

1. The NCB benefits you will avail yourself of over the years. This will result in significant premium discounts at renewal. 2. The claim filing procedure. It should be easy and seamless. Furthermore, the claim settlement ratio should be high. 3. The premium amount you'll have to pay for the insurance and the kind of coverage you'll get from it. 4. The policy term of the insurance.

While buying an insurance policy for bike, make sure you check all the details thoroughly. If you spot any errors in the document, speak to your insurer immediately. Do not rush into buying the policy, as it is meant to provide significant protection for your bike.

Why Is Bike Insurance Mandatory for 5 Years?

One of the most commonly asked questions is, “Is bike insurance compulsory in India for 5 years?” Well, now it is. Two-wheelers are far more prone to accidents than any other vehicles on the road. With risks such as theft, accidents, and damage due to man-made and natural activities, the Government of India has introduced a new two-wheeler insurance rule.

At the time of purchase of two wheeler in India, only long-term third-party insurance is mandatory as per the Supreme Court and IRDAI implementation. The IRDAI (Insurance Regulatory and Development Authority of India) introduced this rule due to the increasing number of two-wheelers on the road. Old two wheeler owners can renew their third-party insurance annually.

By making 5 years mandatory for bike insurance for new vehicles, the authorities aim to:
1. Foster mindfulness for the riders to drive carefully.
2. Reduce the risk of road accidents.
3. Reduce the financial burden on accident victims.
4. Improve the compliance rates.
5. Streamline the entire insurance process for two wheeler owners.

If you're buying the 5-year bike insurance policy, you must purchase the right one.

Types of Bike Insurance Policies Explained

If you're wondering is bike insurance mandatory in India, the answer is yes. While third-party insurance is mandatory, there are other types of bike insurance policies you must get for additional protection. The different types of bike insurance policies offering enhanced protection include the following:

1. Third-party Bike Insurance

This is a fundamentally and legally mandatory bike insurance policy in India. It provides coverage for death, injury, or third-party property damage caused by your bike. However, it will not cover any damage to your vehicle. If you just want to comply with the law, you may get this insurance policy.

Many first-time vehicle owners prefer this option because of its affordability. This bike insurance policy is preferred by those who travel short distances at low risk or drive their vehicle very little. Long-term coverage is required at the time of purchase.

2. Comprehensive Bike Insurance Policy

The comprehensive bike insurance policy offers coverage for third-party and own-damage losses. It also offers personal accident cover for owner-drivers in case of accidents.

A comprehensive two wheeler insurance policy is considered to be the most convenient coverage for bike riders. As you gain overall coverage, you can significantly reduce your risks. As for own damage under the comprehensive insurance policy, coverage is provided for natural calamities, theft, fire, and man-made activities.

3. Own Damage Insurance Policy

The standalone own-damage insurance policy provides protection only for the bike if the bike owner has third-party insurance. It offers protection against accidental damages, fire, theft and natural or man-made calamities.

This policy is suitable for those who want to enhance their coverage without opting for comprehensive insurance. The riders get enhanced protection while significantly reducing their costs.

To know more about the types of bike insurance, read our blog Different Types of Bike Insurance.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.