Understanding the KYC Process in Two-Wheeler Insurance
Understanding the KYC Process in Two-Wheeler Insurance
Published on April 10, 2023. EST READ TIME: 4 minutes
![KYC Process in Two-Wheeler Insurance KYC Process in Two-Wheeler Insurance](/images/default-source/two-wheeler-insurance-page-images/kyc-process-in-two-wheeler-insurance.jpg)
Buying a bike insurance policy is mandatory when you buy a new bike. It is also mandatory to renew it on time so that you can continue reaping the benefits of the plan. However, in recent years, there has been a substantial uptick in the number of insurance-related frauds. In a bid to curb such malicious activities, IRDAI regularly updates its policies.
A result of these regular policy updates is the introduction need for the KYC process for bike insurance. If you aren’t aware of this new regulatory change, here is everything that you ought to know.
KYC is a two-wheeler insurance policy
The IRDAI recently provided master guidelines for counter-financing of terrorism and anti-money laundering. As a part of this, insurance providers are now required to collect customer identification information before renewing or issuing a new bike insurance policy. This process is known as KYC or knowing your customer. The KYC process will provide information about the creditworthiness of the insured and aims at making the claim settlement process smoother.
Understanding the KYC process for two-wheeler insurance policies
To make way for easier transformation, the IRDAI has outlined a few different ways by which the KYC process can be completed. As a policy buyer, you can use any of the following methods.
1. KYC using Aadhar
There are two different ways by which KYC via Aadhar can be completed. The first is Aadhar authentication where all your demographic and biometric information is saved in the Central Identities Data Repository. Once you submit for verification, the vault verifies the authenticity of the information. Alternatively, e-KYC can be done with the help of Aadhar. This is a simpler process where an insurance provider can directly access your information such as name, address, date of birth, gender, etc. from the central database. With this, the insurance provider can complete the authentication process.
2. KYC via video call
KYC verification via video call reduces any hassles and completes the process in a shorter duration. It is a paperless way of completing KYC authentication via video calls. An insurance provider can get on a one-to-one video call with the insured and authenticate the documents, confirm the address, and few other checks to complete the process.
3. KYC via PAN card
KYC authentication via PAN card is one of the simplest ways. You can either complete this process online or offline. To complete the KYC process, you will also need your Aadhar number. You must log in to the website and upload your PAN card along with a self-attested copy of your Aadhar card. You will receive an OTP on your registered mobile number, which you can use to complete the process.
4. CKYC
Alternatively, you can opt for the CKYC process as well. In this, you will be assigned a unique central know your customer number (CKYC). Henceforth, you can use the unique number to proceed with any financial service in the country.
Documents required for KYC
Here is a list of documents that you might need to comply with the KYC process for bike insurance policies. Note, you might not require all of them.
1. Aadhar card of the insured
2. Driving licence
3. Passport
4. Voter ID Card
5. PAN card
6. Ration card
7. Central government health scheme (CGHS) or Ex-servicemen contributory health scheme (ECHS)
For policy buyers who reside in rural areas, the following documents would be required for the KYC process.
1. PAN card
2. Kisaan passbook that has a photograph of the applicant
3. Gram panchayat residential certificate, usually issued by the panchayat head
4. MGNREGA card
5. Domicile and caste certificate that is issued by a state government that includes a photograph of the applicant
6. Certificate of address along with a photograph of the applicant issued either by MLA/MP or a gazetted government official
7. Previous three month’s mobile bill or telephone bill
8. Registration certificate for the bike
KYC norms for insurers
Since the introduction of the KYC process, the following norms are to be followed by individuals and juridical people, as far as bike insurance policies are concerned.
New KYC norms For individuals
1. Insurance providers should be aware of the personal details of existing and new policyholders to verify the authenticity of applied policies.
2. If you wish to submit a different address than the one present on your Aadhar card, you must sign a self-declaration for the mentioned address.
3. You must submit proof of residence, proof of identity, and a passport-size photograph to proceed with buying a bike insurance policy.
4. If you have opted for long-term third-party bike insurance, you will still need to complete the process, however, there is a different timeline for the same. Individuals with low-risk profiles can do it within two years, while individuals with high-risk profiles need to complete it within a year.
5. Individuals who were not able to complete the KYC process must submit all the necessary documents to their insurance provider.
New KYC norms for juridical person
1. Individuals must submit the name of the company, proof of the existence of the company, and its legal form.
2. Need to submit identification proof of the juridical person.
3. Need to submit proof of address for the registered address.
4. Proof of the power of the corporation to regulate authority.
5. An individual who is authorized on behalf of the juridical person.
Now that you are aware of the new process and how to complete the same, it is pertinent that you understand the need for a bike insurance policy.
1. The law makes it mandatory for all bike owners to buy third party bike insurance. Failing to secure a policy makes you liable to pay a hefty penalty to the traffic police department along with the liability to pay for damages or injuries.
2. A third party bike insurance will safeguard you against any damage or injuries to third parties during an accident. Ensuring that you do not end up paying large compensations from your pockets.
3. You can also choose a comprehensive bike insurance policy. During an accident, if your bike receives any damages, you can use your policy to claim the damages.
4. A comprehensive bike insurance policy will also compensate if your bike is stolen or damaged due to natural calamities or theft, vandalism, riots, etc.
5. A personal accident cover ensures that the loved ones of the insured receive compensation if the injuries result in the death or disability of the insured.
Conclusion
The IRDAI constantly is evaluating new processes and methods to ensure better transparency and reduce the chances of fraud. The introduction of the KYC process before buying a bike insurance policy is one such measure. The process will ensure that the insurance providers are aware of the worthiness of the individual and make the claim process simpler for everyone.
Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.
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