Owning a two-wheeler brings convenience and freedom of mobility. However, it also comes with the responsibility of protecting yourself, your vehicle and others on the road. In India, bike insurance is not just a safety net but also a legal requirement under the Motor Vehicles Act.
Yet, many bike owners make avoidable mistakes when buying insurance, leading to inadequate coverage, higher expenses or even denied claims later. So, let’s explore the top mistakes to avoid when buying bike insurance and tips on how to steer clear of them.
10 Most Common Bike Insurance Mistakes to Avoid
While buying a bike insurance policy may seem straightforward, many riders overlook key details that can lead to costly errors. Below are some of the most common mistakes to watch out for.
1. Not Understanding Policy Types
One of the most common mistakes buyers make is not understanding the difference between third-party insurance and comprehensive insurance.
- Third-party insurance is mandatory in India, covering damages or injuries caused to another person or their property. However, it does not protect your own bike.
- Comprehensive insurance, on the other hand, covers both third-party liabilities and damages to your own vehicle due to accidents, theft, fire or natural calamities.
Choosing third-party insurance just because it is cheaper might save you money in the short run but can leave you financially exposed if your bike is damaged. On the flip side, comprehensive insurance offers wider protection and is often the better long-term choice.
2. Ignoring Add-Ons
Add-ons enhance your coverage by tailoring the policy to your needs. Yet, many bike owners skip them altogether. Popular add-ons include:
- Zero Depreciation Bike Insurance Cover: Ensures full claim settlement without factoring in depreciation.
- Roadside Assistance: Provides help in case of a breakdown.
- Engine Protection Cover: Covers damages to the engine, often excluded from standard policies.
- Pillion Rider Cover: Extends accident coverage to a pillion passenger.
At the same time, overloading your policy with unnecessary add-ons can increase premiums without much benefit. The key is to strike a balance and choose only those riders that match your usage and risk profile.
3. Focusing Only on Low Premiums
It is tempting to buy the cheapest bike insurance available. However, policies with very low premiums usually compromise on coverage. A low-cost plan may have a reduced Insured Declared Value (IDV), fewer add-ons and limited network garages.
While saving money upfront feels good, it could result in heavy out-of-pocket expenses during a claim. Always prioritise value for money by choosing a plan with the right coverage at a reasonable cost.
4. Not Checking Insurer’s Claim Settlement Ratio
The Claim Settlement Ratio (CSR) reflects how efficiently an insurer settles claims. A low CSR may indicate delays or frequent rejections, which can be frustrating in times of need.
Before choosing an insurer, check their CSR, customer reviews and reputation. Opting for a company with a strong track record ensures that your claims are processed smoothly and quickly.
5. Providing Incorrect or Incomplete Information
Many buyers unintentionally provide incorrect details, like the wrong year of manufacture, misreporting modifications or skipping past accident history, to reduce premiums. This is a costly mistake.
Insurers verify all details at the time of claim, and discrepancies can lead to claim rejection, policy cancellation or even legal action. Always be honest and accurate while filling in your proposal form to avoid unpleasant surprises later.
6. Overlooking the IDV
The Insured Declared Value (IDV) is the maximum amount your insurer will pay if your bike is stolen or totally damaged.
- Opting for a lower IDV reduces the premium but also reduces your payout in case of a major claim.
- Opting for a higher IDV increases premiums unnecessarily, even though the insurer won’t pay more than the bike’s current market value.
The right approach is to choose an IDV that accurately reflects your bike’s present market worth.
7. Ignoring Policy Terms and Exclusions
Many policyholders don’t read the fine print, only to realize later that their insurance does not cover certain situations. Common exclusions include:
- Riding under the influence of alcohol or drugs.
- Regular wear and tear.
- Electrical or mechanical breakdowns.
- Damages due to unauthorized modifications.
Understanding your policy’s inclusions and exclusions helps prevent claim disputes and ensures you are prepared for what your insurance will and won’t cover.
8. Not Comparing Policies Online
Buying the first policy offered by your dealer or agent might be the easiest option, but it is not always the best one. With online comparison platforms, you can evaluate multiple insurers on coverage features, premium costs, add-on availability and claim settlement processes.
Comparing policies empowers you to make an informed decision and often helps you find better deals.
9. Not Considering Cashless Garage Network
When your bike needs repairs after an accident, a cashless garage facility can make the process hassle-free. Instead of paying out-of-pocket and waiting for reimbursement, the insurer settles the bill directly with the garage.
Choosing an insurer with a wide network of cashless garages ensures that you have convenient options near your home or workplace. Skipping this check could result in extra financial burden during emergencies.
10. Overlooking No Claim Bonus (NCB) Benefits
The No Claim Bonus (NCB) is a reward offered by insurers for every claim-free year, ranging from 20% to 50% discount on the premium.
Many bike owners fail to protect their NCB or forget to transfer it when switching insurers. This results in losing out on significant long-term savings. Some insurers also allow you to buy an NCB Protection add-on, ensuring you retain your bonus even if you make a minor claim.
Bike insurance is not just a legal formality but also your safeguard against financial loss, unexpected accidents and repair expenses. However, making mistakes while purchasing a policy can dilute its benefits.
By avoiding these common mistakes and investing time in research, comparison, and honest disclosures, you can ensure that your bike insurance truly works for you when you need it most.
Ultimately, the right policy provides not just compliance with the law, but also peace of mind every time you hit the road.