Each year, countless lives are lost on Indian roads due to accidents. India has the highest number of road accidents globally, driven by reckless driver behaviour, non-compliance with traffic rules and human errors. Alarmingly, two-wheeler fatalities rose by 8% in 2022, claiming nearly 75,000 lives — accounting for 44% of the 1,68,491 road accident deaths that year.

India’s roads have become busier over the years as average per capita income rises, leading to more people purchasing two-wheelers. With the world’s third-largest road network, the country had 354 million vehicles as of FY22, as per Statista. Yet, a significant concern stays— lack of insurance among vehicle owners.

As per a General Insurance Council report, over 60% of vehicles in India are uninsured, with two-wheelers leading the category. In 2015-2016, Only 8.26 crore of the about 19 crore registered vehicles were insured.

Reasons for hesitation

Although, third-party motor insurance is mandatory, many vehicle owners remain uninsured. This issue stems from three key factors: many bike owners avoid insurance to save money, and those who buy, often fail to renew policies and lack awareness about insurance products.

But being uninsured can severely jeopardise your financial security. In the event of a road accident causing property damage or injury, you have to bear all costs out of pocket.

Taking precautions by insuring your vehicle is far better than regretting it later. Driving without insurance also carries legal consequences. First-time violators face a fine of ₹2,000 and/or up to three months in jail. Repeat offences incur a ₹4,000 fine. Here are your options for insuring two-wheelers viz.

Two types of bike insurance are available: third-party insurance and own-damage (OD) insurance.

Third-party insurance

This mandatory coverage protects against liabilities arising from damage to someone else’s property or injury in an accident. Compensation depends on factors like severity of injuries, third party’s age, and their profession or income.

The maximum compensation is ₹7.5 lakh for third-party death or property damage. However, this policy does not cover: damage to your own bike, belongings inside your bike during an accident and theft or total destruction of bike.

The Insurance Regulatory and Development Authority of India (IRDAI) determines the premium for third-party insurance based on engine capacity. For example, the premium for bikes with engines between 75 CC and 150 CC is ₹3,851 for a five-year policy. The IRDAI has mandated five-year long-term third-party bike insurance to cut renewal hassles.

OD insurance

This policy covers damages to your bike caused by fire, theft, natural disasters or man-made incidents. Often bundled with third-party insurance, it offers enhanced protection. Add-ons like zero depreciation cover, roadside assistance, key and lock replacement, tyre protector, and invoice price can help you boost coverage.

Own damage insurance policies are valid for one year and must be renewed annually. However, many insurance companies have also started offering long-term plans like 3+3 years, which are highly affordable. The premium depends on factors like the vehicle’s age, registration location, make and model, and voluntary deductibles.

For all-around protection, a comprehensive policy combining third-party and OD insurance is recommended.

Comprehensive bike insurance offers peace of mind by ensuring financial security in the event of an accident. It safeguards not just your finances but also provides coverage for unforeseen situations like theft, natural calamities, and third-party liabilities.

As the number of vehicles on India’s roads continues to rise and the risk of accidents grows, having adequate insurance is not just a legal need but a very important step in protecting yourself and others.

Comprehensive bike insurance offers peace of mind by ensuring financial security in the event of an accident. Think about it—you’ve invested so much in your motorcycle, a companion for your daily rides and cherished journeys.

With today’s technology, buying or renewing bike insurance is incredibly simple and can be done in under a minute. This small step ensures your safety, safeguards your bike, and keeps you prepared for any unexpected situation on the road.

(The writer is head, two-wheeler insurance, Policybazaar.com)