Examine the most recent IRDAI developments on insurance for two-wheelers. From long-term policies to NCB benefits and mandatory coverage, grasp essential insights for enhanced policy understanding and road safety.
Two-wheelers are a popular mode of transportation in India, with over 20 million new two-wheelers being sold every year. With the increase in the number of two-wheelers on the road, the need for insurance coverage has also grown. In order to regulate the insurance industry and protect the interests of policyholders, the Insurance Regulatory and Development Authority of India (IRDAI) has laid down certain rules and regulations for two-wheeler insurance policies. In this article, we will discuss the new IRDAI rules for two-wheeler insurance policies and how they affect you as a policyholder.
New Bike Insurance Rules
In 2018, the IRDAI introduced new rules for two-wheeler insurance policies, which came into effect from September 1, 2018. These rules were aimed at simplifying the insurance process for policyholders and making it more transparent. Here are the key changes introduced by the IRDAI:
Long-Term Insurance Policies
One of the major changes introduced by the IRDAI is the option to purchase long-term insurance policies for two-wheelers. Earlier, two-wheeler insurance policies were issued for a period of one year and had to be renewed every year. However, with the new rules, policyholders have the option to purchase a long-term policy for a period of three years. This means that you do not have to renew your policy every year and can enjoy continuous coverage for a longer period of time.
Third-Party Insurance Premiums
Under the new rules, the IRDAI has also made it mandatory for all two-wheeler insurance policies to have a third-party insurance component. This means that every two-wheeler insurance policy must provide coverage for any third-party liability that may arise due to an accident involving the insured vehicle. The premium for third-party insurance is fixed by the IRDAI and is revised every year. The current third-party insurance premium rates for two-wheelers are as follows:
No-Claim Bonus (NCB)
The new rules also make it mandatory for insurance companies to offer a no-claim bonus (NCB) to policyholders who do not make any claims during the policy period. The NCB is a discount on the premium payable for the next policy period and can range from 20% to 50% depending on the number of claim-free years. This encourages policyholders to drive safely and avoid making small claims, which can affect their NCB.Personal Accident Cover
Under the new rules, it is mandatory for all two-wheeler insurance policies to provide a personal accident cover for the owner-driver of the vehicle. This cover provides compensation in case of death or disability of the owner-driver due to an accident involving the insured vehicle. The minimum coverage for this personal accident cover is Rs. 15 lakh.
New Insurance Rules for Two Wheeler
Apart from the changes introduced by the IRDAI, there are also certain rules and regulations set by the Road Transport Office (RTO) that must be followed when purchasing a two-wheeler insurance policy. Here are some of the key rules that you should be aware of:
Compulsory Third-Party Insurance
As mentioned earlier, it is mandatory for all two-wheeler insurance policies to have a third-party insurance component. This is a legal requirement and failure to comply with this rule can result in a fine of up to Rs. 2,000 and/or imprisonment of up to 3 months. It is important to note that third-party insurance only provides coverage for any third-party liability and does not cover any damages to your own vehicle.
Insured Declared Value (IDV)
The Insured Declared Value (IDV) is the maximum amount that you can claim in case of a total loss or theft of your two-wheeler. It is important to ensure that the IDV of your vehicle is calculated correctly as it affects the premium payable for your insurance policy. The IDV is calculated based on the manufacturer's listed selling price of the vehicle and the age of the vehicle. It is important to note that the IDV decreases with the age of the vehicle.
Transfer of Ownership
If you sell your two-wheeler to another person, it is important to transfer the ownership of the vehicle to the new owner. This also applies to the insurance policy for the vehicle. The new owner must get the insurance policy transferred to their name within 14 days of purchasing the vehicle. Failure to do so can result in the policy becoming invalid and the new owner will not be able to make any claims in case of an accident.
RTO Rules for Bike Insurance
Apart from the rules set by the IRDAI, there are also certain rules and regulations set by the RTO that must be followed when purchasing a two-wheeler insurance policy. Here are some of the key rules that you should be aware of:
Registration Certificate (RC)
The Registration Certificate (RC) is a document that proves the ownership of a vehicle. It is important to ensure that the RC of your two-wheeler is always valid and up-to-date. In case of an accident, the insurance company will ask for a copy of the RC to process your claim. Failure to provide a valid RC can result in your claim being rejected.
Pollution Under Control (PUC) Certificate
The Pollution Under Control (PUC) certificate is a document that proves that your vehicle meets the pollution control standards set by the government. It is mandatory for all vehicles to have a valid PUC certificate. Failure to produce a valid PUC certificate can result in a fine of up to Rs. 10,000 and/or imprisonment of up to 6 months.
Insurance for New Bike Rules
If you have recently purchased a new two-wheeler, here are some important rules that you should keep in mind when purchasing an insurance policy for your vehicle:
Timely Purchase of Insurance
As per the new rules introduced by the IRDAI, it is mandatory for all two-wheelers to have a valid insurance policy at the time of purchase. This means that you must purchase an insurance policy for your new two-wheeler before taking it out on the road. Failure to do so can result in a fine of up to Rs. 2,000 and/or imprisonment of up to 3 months.
Comprehensive Insurance
While it is mandatory to have a third-party insurance component, it is recommended to opt for a comprehensive insurance policy for your new two-wheeler. A comprehensive insurance policy provides coverage for any damages to your own vehicle in addition to the third-party liability cover. This ensures that you are financially protected in case of any accidents or mishaps.
Bike Insurance IRDAI Rules for Personal Accident (PA) Cover
PA Cover is a mandatory cover for the owner-driver of the bike that is insured. The cover is provided in third-party as well as comprehensive bike insurance. This includes:
- Sum assured of INR 15 lakhs in case of total disability or death of the owner
- The compensation is provided on the following basis:
| Coverage | Compensation |
|---|---|
| Death | 100% of the sum insured would be paid as a compensation |
| If both limbs or both eyes or one eye and one limb are lost in the accident | 100% of the sum insured would be paid as a compensation |
| If only one eye, or one limb is lost in the accident | 50% of the sum insured would be paid as a compensation |
Insurance Regulations and Compliance
The IRDAI has also introduced certain regulations and compliance measures to ensure that insurance companies follow ethical practices and protect the interests of policyholders. Here are some of the key regulations and compliance measures that you should be aware of:
Grievance Redressal Mechanism
The IRDAI has set up a grievance redressal mechanism to address any complaints or grievances that policyholders may have against insurance companies. This mechanism ensures that policyholders have a platform to voice their concerns and get them resolved in a timely manner.
Claim Settlement Ratio
The Claim Settlement Ratio (CSR) is a measure of the number of claims settled by an insurance company in a financial year. The IRDAI has set a minimum CSR of 90% for all insurance companies. This ensures that insurance companies do not reject genuine claims and settle them in a timely manner.
Conclusion
In conclusion, the IRDAI has introduced new rules and regulations for two-wheeler insurance policies to make the insurance process more transparent and to protect the interests of policyholders. It is important to be aware of these rules and regulations to ensure that you are adequately covered and comply with all legal requirements. We hope this article has helped you understand the new IRDAI rules for two-wheeler insurance policies and how they affect you as a policyholder.
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