APN News

  • Wednesday, December, 2018| Today's Market | Current Time: 06:35:32
  • There are certain changes proposed by the insurance regulator, IRDAI (Insurance Regulatory and Development Authority of India) for the third-party premium of two-wheelers. The changes are applicable from 1st April 2018. As a matter of fact, the insurance regulator will revise the third-party insurance premium on an annual basis. The revision will be done on the basis of past claims history.

    Reduction in insurance premium

    The IRDAI has reduced the insurance premium for third-party as well as comprehensive insurance plans. The basic premium payable to for your two-wheeler is based on the engine capacity (cc).

     

    Engine capacity Third-party premium
    Less than 75cc Rs. 427
    Above 75cc and less than 150cc Rs. 720
    Above 150cc and less than 350cc Rs. 985
    Above 350cc Rs. 2,323

     

     

     

    There is no change in the third-party premium for vehicles whose size is in between 75cc and 150cc. In fact, there is a slight increase in premium for vehicles of size above 150cc and below 350cc.

    The premium of vehicles whose size is above 350cc has increased by more than 100%.

    For 2017-18, the vehicle premium was Rs. 569 for engine size less than 75cc. The revised price for 2018-19 is Rs. 427.

    The impact of third-party bike insurance will be present on the comprehensive bike insurance premium as well.

    Third-party insurance is mandatory

    For every new vehicle, the third-party insurance is a must as per the Supreme Court of India ruling on 20th July 2018. The measure will give great relief to victims of road accidents. For cars, the third-party insurance is mandatory for 3 years and for two-wheelers, it is mandatory for 5 years. While the third-party subscription is made mandatory for new vehicles, the subscription to comprehensive policy is to be done on a voluntary basis.

    The move will ensure that above 66% of vehicles without any kind of insurance will be covered by the insurance so that the victims will get compensation. If there is injury or death of the third-party, the insurance company will pay the damages.

    Advantages of a third-party bike insurance

    • Covers the risk – There are certain advantages with a third-party bike insurance plan. It will protect the interests of the rider against any damages made to the third-party.
    • Economical – The third-party insurance policy is economical. The premium is low.
    • Less documentation – You can buy a third-party insurance plan with less documentation. It is easy to subscribe to the insurance plan.
    • Riders and options – The insured can subscribe to riders and options as per the needs of the vehicle and the rider. However, it will come with limited options. It will cover personal accident only based on your subscription.

    Drawbacks of third-party bike insurance

    The risk coverage is applicable to the third-party but not to the insured vehicle.

    • Damage of own vehicle – If your vehicle is damaged in the accident, the insurance company is not liable for payment. The repair or restoration cost of the vehicle should be borne by the insurance company.
    • Mandatory as per the law – New vehicles, as well as old vehicles, should be insured as per the provisions of the law. Third-party insurance is mandatory as per the law.
    • Little riders – There will be less flexibility with the third-party insurance plan. On the other hand, the comprehensive insurance plan offers maximum flexibility.

    Renewal of a third-party insurance plan

    You can renew the third-party insurance plan on or before the due date. By renewing the policy before the due date, you will enjoy many benefits. You will not want to pay a higher insurance premium.

    • It is also possible to convert into a comprehensive insurance policy so that you will enjoy better insurance benefits.
    • The insurance policy can be renewed online. You should provide the current policy number on the official website and after verifying the product, the insurance renewal premium can be paid online.
    • It is important to renew your insurance policy before the expiry date so that your liability against third-parties will be covered prominently.
    • The online payment can be done by using debit/credit card and internet banking facilities.

    Online quotes

    • Before purchasing an online insurance policy, you can compare the insurance quotes offered by various insurance companies. The online insurance calculator will be helpful in choosing the best plan as per your requirements.
    • The insurance calculator requires certain important parameters such as make & model of the two-wheeler, registration number, location, age of the driver and add-ons.
    • The comparison of insurance premiums will help you settle for the best insurance policy. The comparison tool will help you analyze the futures across various insurance plans.
    • You can switch-over from one insurance company to another insurance company as per your needs.

    Selection of a third-party insurance plan

    The selection of a third-party insurance plan should be done based on the following factors:

    • Claim settlement ratio – The claim settlement ratio will indicate the efficiency of the insurance company in settling the claims. The insurance company should settle the claims in a seamless manner.
    • Flexibility – The insurance company should offer great flexibility to buy or renew the insurance policy by either online or offline.
    • Enhancements – You can enhance the existing insurance plan by subscribing to additional riders. As you subscribe to additional riders, the insurance premium will increase.
    • NCB – The insurance company offers NCB (No-Claim Bonus) if you do not claim the policy in the previous policy year. The NCB will increase with every claim-free year. You will get the benefit if you renew the policy before the due date.
    • Choose the right coverage – You should choose the right coverage as per the type of vehicle and usage of the vehicle.
    • Long-term policy – You can opt for a long-term policy (for 2 or 3 years) by which the insurance premium will come down and you will not want to renew the policy on an annual basis.

    Risks factors which influence the insurance premium

    The following factors will influence the insurance premium:

    • Cubic Capacity (CC) – The two-wheeler’s insurance is based on the cubic capacity of the vehicle. If the cc is higher, the insurance premium will be higher.
    • Age of the vehicle – If the age of the vehicle increases, the insurance premium will also increase. With the increase in age, the probability of a breakdown of the vehicle will also increase.
    • Place of registration – The place of registration of the vehicle will influence the premium. If your vehicle is registered in a metropolitan city, the premium will be high. On the other hand, if the vehicle is registered in a rural place, the insurance premium will be low.

    For example, the following cities come under the Zone A where the premium will be high:

    • New Delhi
    • Mumbai
    • Kolkata
    • Chennai
    • Bangalore
    • Ahmadabad
    • Hyderabad
    • Pune

    The rest of the country comes under Zone B and the insurance premium for your two-wheeler will be lower than the premium payable for Zone A.

    Tips to buy third-party bike insurance plan

    The following tips offered by experts will help you choose the best third-party insurance plan:

    • Coverage – There should be clarity on the coverage offered by the insurance company. The sum insured should be sufficient to fulfill your payment to the third-party.
    • Add-ons – There are various add-ons which can be included to enhance the insurance plan. There will be a limited choice to include add-ons with a third-party insurance plan. If you buy a comprehensive insurance policy, there will be a number of options.
    • Zero depreciation cover – Zero depreciation cover is available with the comprehensive insurance cover as your vehicle will also be covered by the comprehensive insurance plan.
    • Voluntary deductible – With the subscription to the voluntary deductible, you can decrease the insurance premium. However, you will want to pay a higher share of the insurance claim when you go for a higher voluntary deductible. Hence, the deductible should be chosen judiciously.

    Claims process

    You should be aware of the insurance claims process. As soon as you are involved in the accident, you should inform the bike insurance company.

    The lodging of police complaints is important. The FIR copy should be attached along with the claims form so that the insurance company will settle the claim quickly. The other necessary evidence should be submitted to the insurance company.

    The claims process varies from one insurance company to another  insurance company.

    Exclusions

    As you buy an insurance policy, there are certain factors which are not covered by the policy. You should be aware of these exclusions so that you can make the most of your investment.

    • Driving the vehicle without a valid driving license
    • Intentional damage to the third-party person or property
    • An insurance policy is not in force

    Conclusion

    If you are shopping for third party two wheeler insurance, you can strike the best deal by comparing various plans offered by a different insurance company. It is mandatory to possess at least third-party insurance plan so that you can overcome legal liabilities in a very efficient manner.