Understanding Two Wheeler Insurance for Second-Hand Bikes

Posted on: Nov 13, 2024 | 3 mins | Written by: HDFC ERGO Team

Understanding Two Wheeler Insurance for Second-Hand Bikes

two wheeler insurance coverage for used bikes

Two-wheeler insurance is an essential aspect of owning a motorcycle. It safeguards riders against financial losses resulting from accidents, theft, and other damages. This blog explores various types of two wheeler insurance for second-hand bikes.

What is Two-Wheeler Insurance?

Two-wheeler insurance is a legal requirement in India. It provides financial protection against losses resulting from theft and damages due to accidents or natural and man-made disasters. While it is crucial for safeguarding your investment, insurance can also offer peace of mind during your rides.

Understanding the different types of two-wheeler insurance available is vital for selecting the best policy that fits your needs.

Comprehensive bike insurance

Comprehensive Bike Insurance offers extensive coverage that includes protection against third-party liabilities and damages to your own bike. This type of policy is ideal for riders seeking peace of mind, as it covers damages caused by accidents, theft, fire, and natural disasters.

Third party bike insurance is the most basic form of insurance mandated by law. It covers injuries inflicted on other individuals or damages to their properties due to an accident involving your bike.

Secondhand Bike Insurance

When purchasing a used bike, obtaining secondhand bike insurance is equally important. This type of insurance is similar to new bike insurance and can be tailored to the bike's condition and ownership status. Many individuals overlook this step or forget to transfer their existing bike insurance. Used bike insurance functions like regular motor insurance, offering either third-party or comprehensive coverage to protect against damages and losses to both the insured vehicle and third parties.

Why is a Comprehensive Secondhand Bike Insurance Necessary?

Insuring your used bike or two-wheeler is not just a legal requirement; it also offers numerous benefits. Here’s why having comprehensive second-hand bike insurance is essential:

1. Protection Against Third-Party Risks

Third-party liability cover safeguards you against legal responsibilities arising from damages or injuries caused to others. With this two-wheeler insurance, you don’t have to bear any financial burden.

2. Theft Coverage

If your bike is stolen, it can be devastating, especially if you invested your savings or took out a loan for it. Fortunately, your insurer will reimburse you based on the current market value of the vehicle. Thus, having two-wheeler insurance is crucial to protect your investment in case of theft.

3. Coverage for Natural Calamities

Natural disasters, like floods, can severely damage your bike, potentially leading to a total loss. In such scenarios, bike insurance will compensate you for the Insured Declared Value or current market value of your vehicle, helping to mitigate your losses.

4. Protection Against Man-Made Calamities

Events like riots or vandalism can also harm your bike, and repair costs can be substantial. A comprehensive bike insurance policy allows you to claim for damages incurred due to these incidents, providing financial relief.

5. Legal Requirement

According to the Motor Vehicles Act of 1988, bike insurance is mandatory when driving on public roads in India. Along with your driving licence, registration certificate, and emission certificate, at least a third-party liability cover is essential for legal compliance.

6. Own Damage Coverage

Comprehensive bike insurance also covers the damages to your bike. In the event of an accident, you can claim repair costs for your insured bike.

Add-On Covers for Second-Hand Two-Wheeler Insurance

Comprehensive second-hand two-wheeler insurance offers various add-on covers. These additional benefits provide extensive coverage for your bike, addressing liabilities and incidents that may not be included in standard comprehensive or third-party plans. Here’s a closer look at the add-on covers available:

1. Return to Invoice Cover (RTI)

In the unfortunate event that your bike is stolen or deemed a total loss, standard insurance typically compensates you based on the current market value or the sum insured. However, with the return to invoice add-on, the insurer will reimburse you up to the original invoice value of your bike, including registration charges and road tax.

2. Nil or Zero Depreciation Cover

When your bike incurs damage due to an accident, the insurance company generally calculates the claim by factoring in the depreciation of parts. However, opting for the nil or zero depreciation cover means that depreciation won't be considered when settling your claim, allowing you to receive a full amount for the replacement of parts.

3. Engine Protection Cover

Comprehensive insurance policies usually do not cover engine damage. In such cases, you would be responsible for the repair costs. By adding the engine protection cover, you ensure that the insurer will cover the repair or replacement of engine components, providing extra peace of mind.

4. Breakdown Assistance

If you find yourself stranded on the road due to a flat tyre or a bike that won't start, the breakdown assistance add-on is invaluable. This service provides support, helping you transport your bike to the nearest garage or offering assistance on-site.

5. Consumables Cover

Standard comprehensive bike insurance often excludes consumables like engine oil, nuts, bolts, and screws when settling claims. The consumables cover add-on addresses this gap by reimbursing you for these essential items, ensuring you’re fully protected during repairs.

Documents Required for Secondhand Bike Insurance

When applying for secondhand bike insurance, certain documents are necessary for processing your policy:

• Registration Certificate (RC)

• Previous Insurance Policy (if applicable)

• No Claim Bonus (NCB) Certificate (if applicable)

• Fitness Certificate of the Bike

• Pollution Under Control (PUC) Certificate

• Identity and Address Proof

• Passport-Size Photographs

• Sale Deed/Form 29 & 30 (if recently purchased)

• Inspection Report (if required)

How to Purchase Secondhand Bike Insurance?

Purchasing secondhand bike insurance is straightforward, whether you opt for a new policy or transfer an existing one.

Scenario 1: Purchasing a New Insurance Policy

1. Research Online: Use insurance comparison websites to explore available policies.

2. Fill in Details: Enter your bike’s registration number and other relevant information to get quotes.

3. Select a Policy: Choose a plan that fits your budget and coverage needs.

4. Complete Payment: Pay the premium online to finalise your policy.

Scenario 2: Transferring an Existing Policy

1. Obtain Policy Details: Request the existing policy documents from the previous owner.

2. Policy Transfer: Ensure the policy is transferred to your name within the stipulated time frame.

3. Renew if Necessary: Renew the policy before it expires to maintain continuous coverage.

Renewing Your Used Bike Insurance

Renewing your insurance is crucial to ensure uninterrupted coverage. Here’s how to do it:

1. Review Current Policy: Assess if the existing coverage meets your current needs.

2. Choose Renewal Method: Opt for online or offline renewal based on your preference.

3. Transfer NCB: If changing insurers, ensure your No Claim Bonus is transferred.

4. Submit Required Documents: Have your existing policy and other necessary documents ready.

5. Complete Payment: Pay the renewal premium to continue your coverage.

6. Receive Policy Document: Verify the details to ensure continuity in your coverage.

Things to Keep in Mind While Insuring a Used Bike

• Ensure the new Registration Certificate (RC) is in the new owner's name.

• Check the Insured Declared Value (IDV), which reflects the bike's current market value and will be the sum insured in case of total loss.

• Opt for a plan with higher coverage and lower premiums to maximise insurance benefits.

• Transfer any No Claim Bonus (NCB) from your previous policy for a discount on the new one.

• Consider add-on covers like invoice protection and nil or zero depreciation for extra benefits.

• Research potential new insurance companies to assess their performance and services before selecting coverage for your used bike.

Conclusion

Understanding the different types of two-wheeler insurance is essential for every rider. Proper coverage not only fulfils legal obligations but also protects you from financial losses in the event of an accident or theft.

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

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