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  • 5 IRDA Rules For Two Wheeler Insurance You Must Know

    Published on April 11, 2019

    When buying your two-wheeler insurance, you surely have wondered how a policyholder can be sure that nobody is going to cheat them. You should be relieved to know that the Insurance Regulatory and Development Authority (IRDA) regulates the entire insurance sector.

    Whether you buy bike insurance online or offline, your purchase is secured by the authority and they protect the policyholder’s interest. They have set certain guidelines that the two wheeler insurance policy providers have to follow. IRDA also supervises the growth of the sector.

    Here are the guidelines that you need to know about to feel safe with your policy:

    1. Depreciation Rate

    The depreciation or deduction rate is one of the aspects that the IRDA regulates. This rate depends on different factors, the most important one being the age of your two-wheeler. The other factors are:

    • The rate of depreciation is 30% for all the components of the two-wheeler that are made of fibreglass. Only the parts mentioned in the policy are countable
    • The depreciation rate for parts that are made of tubes or nylon, rubber, the batteries, plastic parts and tyres is 50%
    • No rate has been specified for the parts made of glass
    • You can find the details of the deduction rate regarding the paint of your vehicle in the document of your policy
    1. Schedule of Depreciation

    The schedule of depreciation for the Insured Declared Value (IDV) of your two-wheeler depends on multiple aspects of your vehicle, like age and condition of it. The rate of depreciation is applied to vehicles that are six months to ten years old.

    However, if your two-wheeler is more than five years old then the IDV has to be decided between you and the policyholder. This is true for any vehicle model that has been discontinued too.

    1. Insured Declared Value

    The Insured Declared Value (IDV) is the amount of cover, which is paid to you in the case of theft or total loss of your two-wheeler. This value decides the amount of premium you have to pay. The IDV is decided based on the current market price of your two-wheeler and its accessories. Know the amount of premium you have to pay using the two wheeler insurance calculator.

    This is regulated by the IRDA to ensure that the policy providers do not cheat the policyholder when they make the insurance claim. You should compare two-wheeler insurance thoroughly before buying one to make sure that you get the best deals on the IDV.

    1. Cover for Personal Accident


    A two-wheeler insurance also provides cover for personal accidents. The IRDA guidelines regulate the amount of compensation depending mainly on the kind of injury the policyholder suffers. You can find these mentioned in the policy document.


    • The compensation for the death of the policyholder is 100%. This can change if the circumstances do not meet with specific conditions mentioned in the document
    • The compensation is 100% if the policyholder loses both of his or her limbs or one limb and one eye
    • If the policyholder loses one limb or one eye then for that the compensation is 50%
    • If any injury causes disablement then the paid compensation amount is 100%
    • You can make a policy claim for only one of the above conditions at a time
    • A claim cannot be made if the injury occurs due to illness, pre-existing physical defect, attempted suicide or self-harm
    • The policy provider’s liability cannot be more than INR 1 lakh at a time
    • No claim can be made in case the accident takes place due to Driving Under Influence (DUI) after consuming drugs or alcohol
    • The sum assured is paid to the policyholder’s legal representative or nominee
    • A claim can be made only if the driver/policyholder owns a driving license
    1. Other Exceptions
    • If the incident takes place outside the covered area then a claim cannot be made
    • If the two-wheeler is used beyond limitations then the claim will be denied
    • Any property damage made by your vehicle is not covered

    These factors are applicable to both third party two wheeler insurance as well as comprehensive two wheeler insurance.