INSURANCE

What is Two-wheeler insurance?

Two-wheeler insurance plan is a general insurance product that offers protection to the insured two-wheeler and its owner/driver against unfortunate events, including road mishaps, accidents or natural disasters that may require an unforeseen expense for the owner. The coverage is offered to a range of two-wheelers including Motor-cycles, Scooters, Activa, etc.

A two-wheeler insurance policy eases out the financial and legal burden that may arise out of situations involving damages or loss caused to the owner/driver of the insured two-wheeler, the insured vehicle, or any third party or their property.

Importance of Two-wheeler Insurance

As per the Indian Motor Vehicle Act, 1988, it is mandatory for any two-wheeler plying on the Indian roads to have a minimum of third-party vehicle insurance cover. Two-wheeler insurance plans not only provide coverage against third-party liability but also offer comprehensive coverage to the owner/driver of the two-wheeler. These plans cover accidental death or disability of the owner/driver and the cost of repair incurred due to damages caused to the insured two-wheeler.

Types of Two-Wheeler Insurance

Basically, two-wheeler insurance plans are categorized into two types and each of these two types offers a different set of benefits and perks to the policyholders.

• Third-Party Insurance: Also called liability only insurance, this plan covers the insured and the owner/ driver of the two-wheeler against third party liabilities arising out of an accident, which causes damage or loss to the third party or its property as well as death/disability of the Owner Driver arising out of the Accident. In this type of policy, only third-party damages that are caused by the insured vehicle are covered. Any damage caused to the insured two-wheeler is only covered in a comprehensive plan. It is mandatory to have third-party two-wheeler cover. And all the two-wheelers that are being purchased September 1, 2018 onwards would need 5-year third-party insurance cover.

• Comprehensive Two-Wheeler Insurance: Also called as package policies, this two-wheeler insurance offers comprehensive coverage to the insured two-wheeler. Apart from third party liability cover, this plan also covers disability or the death of the owner/driver and damage to the insured two-wheeler due to an accident, theft, riots, fire, earthquake, or explosion. There are various add-on benefits like roadside assistance cover, towing assistance, zero depreciation cover, and emergency fuel assistance among others.

Key Factors to Consider before Buying Two-Wheeler Insurance Plans

The sheer multiplicity of two-wheeler insurance service providers and plans in the market can baffle even the most seasoned of investors. Therefore, it makes sense to consider a few vital factors when buying two-wheeler insurance policy.

Here are 4 such factors that one must carefully consider before buying two-wheeler insurance plans in India:

• Two-wheeler Insurance Coverage: This is one of the major factors you should consider when buying a two-wheeler insurance plan. With two-wheeler insurance you can get a personal accident cover of up to Rs. 15 lakh. It also provides you comprehensive coverage against third-party legal liabilities and own-damages caused to your vehicle. In case of any accidental damage or repair you can avail cashless repair services in the registered garages.

• Online Services: A two-wheeler insurance plan can easily be purchased online. You can also renew your existing insurance plan on the go without any hassle from anywhere, anytime.

• Premium: Premium is another key factor that you must consider when buying a two-wheeler insurance plan. It is quite easy to get two-wheeler insurance premium quotes online. You can easily calculate the premium amount using two-wheeler premium online calculator tools.

Two-Wheeler Insurance FAQs

1. Is it compulsory for me to buy insurance for my two-wheeler in India?

Yes, as per the Motor Vehicle Act 1988, it is compulsory to have at least a valid third-party insurance plan when riding a two-wheeler on the Indian roads.

2. What type of coverage is offered under Third-party Insurance?

Third-party insurance plan covers:

• Legal liability arising out of an accident that causes permanent injury and/or death of a third person from your insured vehicle.

• Legal liability arising out of an accident from your insured vehicle that causes damage to a third party property.

3. How much penalty do I need to pay in case my two-wheeler is not insured or my insurance has expired?

Driving without valid insurance (at least third-party insurance) is illegal and this may attract a penalty of up to Rs. 2000 or even jail for 3 months or both.

4. Does a two-wheeler insurance plan cover hospitalization expenses in case of personal accident?

It makes sense that you secure yourself against any possibility of financial obligations that may arise due to a sudden accident. Personal Accident (PA) cover in Comprehensive Two-Wheeler Insurance Policies offers compensation on death/permanent total disability. You may also opt to provide coverage for the pillion passenger.

5. What are the exclusions on the Two-Wheeler Insurance Policy?

Listed below is the list of exclusions on the two-wheeler insurance policy:

• Normal wear and tear

• Any accidents or damages to a third party caused due to negligence of the driver

• Electrical or mechanical failure

• Accidents or damages caused when the two-wheeler is being driven by the owner/driver under the influence of alcohol/liquor/drugs

• Depreciation in the value of the insured vehicle

• Loss or damages caused due to war, or nuclear risks

Commercial Vehicle Insurance: Coverage, Claim & Renewal

Commercial vehicles are used for transportation of goods or passengers or both. Driving a commercial vehicle exposes the driver to continuous and stressful situations which can increase the chance of accidents, loss of goods or even loss of life of the driver or passengers or both. Expenses incurred because of this, if not covered, can cause serious financial and legal implications for the business owner. This is where the need for commercial vehicle Insurance arises that protects the policyholder from bodily injury, death in the event of an accident, and covers you for third-party liability and property damage as well.

Table of Contents:

• What is Commercial Insurance?

• Types

• Coverage

• Claim Process

• Exclusions

• Renewal Process

• Important Aspects

• FAQs

What Is Commercial Vehicle Insurance?

It is an insurance policy which covers commercial vehicles against different types of damage along with personal and third-party liabilities. The policy also provides coverage to the policyholder for any legal liabilities following the death, injury, or property damage of third parties arising out of your vehicle use.

Types Of Commercial Vehicle Insurance

1. Comprehensive Commercial Vehicle policy covers the following:

   • Loss and damage to the insured

   • Third party bodily injury

   • Third party vehicle and property damage

2. Third party cover only provides coverage in case of injury, property damage to third-party vehicle. It doesn’t cover the insured for any loss.

What Commercial Vehicle Insurance Covers?

It makes sense to understand the overall coverage provided under commercial vehicle insurance in order to get the best deal. The insurance covers the following:

1. Loss or damage to your vehicle due to:

   • Accident

   • Burglary, theft

   • Fire, explosion, lighting

   • Riots, terrorism, strike or malicious act

   • Earthquake, flood, storm, landslide

   • Malicious act

   • Terrorist activity

2. Covers third party insurance which protects you against bodily injury or death to a third party or any damage to that person’s property by use of your insured vehicle

How Commercial Vehicle Insurance Functions?

You should understand and know all the details and policies of the insurance well so that you don’t miss availing any benefit from the plan, when needed. Let us understand how it functions:

• Evaluate your requirement well to understand your need for the sum insured

• Also, analyse the insurance companies and the plans and policies before zeroing in on one plan

• Submit the duly filled in proposal form along with other necessary documents

• In case of any unfortunate event, inform your insurance company regarding details of accident, damage, site of the accident and your policy details. Along with that, also submit the vehicle-related documents and other claim-related documents to the insurance company as per the requirement

• On your intimation, the insurance company deputes a surveyor to ascertain the value of the damage and the payable amount as per the terms and conditions of the policy

• In case of a claim under a third party and accidental death or serious injury, you must file the First Information Report (FIR) with the nearest police station. It is the mandatory requirement for processing the claim related to the third party damage, medical expenses of the injured and compensation for the deceased in the accident

• After due repair work and above process, the insurance company hands over the vehicle to the owner within the stipulated time frame

Eligibility Criteria

In India, almost all kind of vehicles which carry commercial activity to transport the passenger or goods or both, can be covered under the commercial vehicle insurance policy. List of vehicles included in the insurance plan are:

• Bus

• Taxi

• Tractor

• Truck

• Trailer

• Crane

• Other goods and passenger transport vehicles

• One can insure his/her vehicle through specialised commercial vehicle policy such as commercial car insurance, bus insurance, truck insurance and taxi insurance.

Claim Process

Some motor insurance companies have cashless claim process while some of them reimburse the claim. Let us look at the two cases:

In case of cashless process

• The insurance company will shift the vehicle to the nearest network workshop for the repair work to be done within the stipulated time frame.

• It will also arrange a cashless medical treatment facility, if the nearby hospital has tied up with the insurance company.

In case of non-cashless process

• In case the cashless process cannot be carried out due to reason beyond the control of the insurance company, the policyholder needs to carry out repair work on their own at the nearest location which can later be reimbursed by the insurance company.

• Make sure to get original bill and payment receipt for all the repair work carried out as it will be required by the insurance company to process the claim.

Documents Required For Claim Process

Below are the important documents which the policyholder needs to submit for getting timely claim:

• Duly filed and signed claim form

• RC of the vehicle along with photocopy

• Driving license of the driver who was driving at the time of accident

• Valid fitness certificate

• FIR in case of third party death or injury or property damage

Exclusions

This insurance takes care of various areas that can put you into trouble. However, certain cases and situations are not covered by commercial vehicle insurance. Let us look at these exclusions:

• General wear and tear, depreciation, electrical faults

• Technical breakdown and damage, which is not accidental in nature

• Damage under “Drink and Drive” situation

• Damage due to overloading the vehicle or its improper use

• Damage caused due to driving the vehicle on incorrect routes, a gross violation of general traffic rules

• Damage due to war, nuclear risks, ionizing radiations

• Consequential loss; if the original damage causes loss or subsequent damage, only the original damage will be covered

• Vehicle driven by someone other than the driver

Renewal Process

One can renew commercial vehicle insurance policy either online or directly by visiting the branch. Most insurance companies provide a No-claim Bonus at renewals provided the policyholder hasn’t made any claim under the policy. One must check the amount of no claim bonus and renewal IDV (Insured Declared Value) before deciding on your policy cover and company.

Companies Offering Commercial Vehicle Insurance In India

Almost all general insurance companies in India provide this insurance. Some of the insurance companies offering commercial vehicle insurance in India are:

• Royal Sundaram Alliance Insurance Co. Ltd.

• Reliance General Insurance Co. Ltd.

• Tata AIG General Insurance Company ltd.

• Iffco Tokio General Insurance Co. Ltd.

• HDFC General Insurance Co. Ltd.

• Bajaj Allianz General Insurance Company Ltd

• The New India Assurance Co. Ltd.

• Future Generali India General Insurance Company Ltd

• DIGIT General Insurance

• Universal Sompo General Insurance Company Ltd

• Shriram General Insurance Co. Ltd.

• STATE BANK OF INDIA

• ICICI Lombard General Insurance Company Ltd

• Bharti AXA General Insurance Company Limited

Important Aspects

One must be aware of all the points related to the insurance and the insurance company in order to understand the plan better and get the best deal. Let us look at some aspects related to the commercial vehicle insurance:

Turn Around Time: The insurance company responds to a claim in a particular duration of time which is called turnaround time. Choose the insurance company which settles claim in the least possible turnaround time.

Claim Settlement Ratio: This ratio signifies the ratio or percentage at which claims will be settled by the insurance company. Even if the premium of the insurance is a little bit higher, you should opt for the company which has a higher claim settlement ratio. There is no point in paying low premiums and then not getting the claim when needed.

Claim Process: When a claim is requested for the commercial vehicle, the insurance company assigns an expert called a surveyor, who assesses the authenticity of the claim, actual damage to the vehicle and determines the fair amount payable in line with the terms and conditions of the insurance policy. While taking insurance policy, you should inquire whether the company has enough trained in-house surveyors as this will result in faster surveys.

Cashless Cover: Some insurance companies provide cashless repair of the vehicle under the claim. However, such a facility is only available at designated workshops of the insurance company. Before finalising the insurance company, you should inquire more about network and coverage of workshops for cashless claims.

Flexibility in Coverage: Based on your requirement, you may need flexibility in coverage and hence can balance yourself with optimum premium payment. For example, for a five-year-old commercial vehicle, you may not want to take own damage insurance but want to cover only third-party liability. In some cases, you want to cover your paid driver under the policy. You must check the flexibility and coverage offered to optimise your premium payment and benefits.

Advantages of Buying Commercial Vehicle Insurance

A commercial vehicle insurance is a must the moment you buy a vehicle. Let us look at some advantages of buying this insurance:

• If you have an entire fleet of vehicles then getting the commercial vehicle insurance will eliminate the stress of managing different insurance policy

• Commercial vehicles have better negotiation ability as they are insured for in bulk

Term Life Insurance

• Term Life insurance provides coverage for a fixed period of time at a fixed premium rate.

• In case of untimely death of the life insured during the policy term , the nominee of the life insured gets the Total Payout/Benefit. The benefit can be paid out as a lump sum payout or a combination of Lump sum & Monthly payout or only as a Monthly payout.

• Therefore Term insurance plans are said to be pure protection plans which ensure financial stability of the dependants in case of untimely death of the life insured.

Benefits of Term Life Insurance

• Death Benefit: In the unfortunate event of death of life insured during policy term, the nominee shall receive the Total Payout as a Lump sum amount or a combination of Lump sum & Monthly amount.

• Lump sum amount to take care of immediate financial liabilities.

• Monthly income to sustain the family lifestyle.

• Tax Benefit: The premiums paid for Term Life Insurance are Tax free under section 80(C) upto an amount of Rs 1,50,000.

• Rider Benefits: Riders are an important addition to the basic plan offering & provide an option to customize the coverage to the life insured.

• Accidental Death Benefit rider offers an additional sum assured over the base plan offering in case death occurs due to an accident.

• Accidental Disability rider offers an immediate lump sum payment on occurrence of any disability due to an accident.

• Critical Illness rider offers an additional sum assured over the base plan offering if the life insured is diagnosed with one of the critical illnesses mentioned in the rider.

• Waiver of Premium rider offers the waiver of all policy premiums in case the life insured is diagnosed permanent disability or critical illness.

• Option to increase Death benefit: Certain plans have offerings where the life insured can increase the life cover at key stages in life like marriage , birth of child.

Key Terms when comparing Term Life insurance plans

• Total Payout of each plan

• Premium amount paid for desired Total Payout

• Policy term offered

• High claim settlement ratio

• Riders offered with the plan