Online insurance for motorbike might be
hassle-free but read fine print carefully
Driving a motorcycle without a valid
two-wheeler insurance policy can not only land you in trouble with the
authorities, but also be financially damaging in case of a road mishap. Despite
the fact that third-party motor insurance is mandatory under Indian law, a
whopping 45-50% of two-wheelers plying on roads across the country are not
insured, says a study by insurance aggregator Policybazaar.com.
The earlier a two-wheeler owner realises the benefits of third-party insurance, the benefits of third-party insurance, the better it is for him because, in case of an accident, he could be left poorer by a few lakhs of rupees. Though one is not required to insure one's vehicle against damage or theft under the law, one should consider insuring the vehicle. Despite the odds, most motorcycle owners do not renew their vehicle's insurance after the first 2-3 years.
Insurance agents, too, do not show any
interest in promoting such products because of the small ticket size of
two-wheeler insurance. To insure a motorcycle worth, say, Rs 60,000, the annual
premium works out to Rs 1,600-2,000, including Rs 460 for the third-party
cover. It is a small amount, but two-wheeler owners tend to ignore it
altogether.
Once the policy lapses, getting the vehicle insured can be tedious. The vehicle has to be physically inspected again and the owner has to go through the process of getting their vehicles inspected if the insurance has expired," says Vijay Kumar, chief technical officer, motor, Bajaj Allianz General Insurance.
The online advantage
Two-wheeler insurance accounts for barely 12% of the total premium of motor insurance. However, the high lapse rate is an opportunity for insurers to boost premium income. A few companies, including Bajaj Allianz General Insurance and HDFC ERGO, have started scheme s that allow two-wheeler owners to get their vehicles insured online without physical inspection. "Though the company is exposed to a certain amount of risk, the decision to waive the pre-inspection in case of online renewal of expired two-wheeler policies has been taken to promote two-wheeler insurance in India," says Mukesh Kumar, executive director, HDFC ERGO.
Policybazaar.com claims this effort has yielded positive results. "In June 2014, 25% of the two-wheeler insurance policies bought online through us were break-ins. In August, this number rose to 55%," says Naveen Kukreja, group chief marketing officer, Policybazaar.com.
Read the fine print
If you decide to buy an insurance policy for your vehicle after a break, take a close look at the fine print. For instance, the cover may not start immediately. "In case the vehicle is being insured online without inspection, the risk inception date starts three days from the date of issuance of the policy," says Kumar of Bajaj Allianz. While taking the physical route to explore revival of lapsed policies is an option, renewing it online is much simpler.
If you decide to buy an insurance policy for your vehicle after a break, take a close look at the fine print. For instance, the cover may not start immediately. "In case the vehicle is being insured online without inspection, the risk inception date starts three days from the date of issuance of the policy," says Kumar of Bajaj Allianz. While taking the physical route to explore revival of lapsed policies is an option, renewing it online is much simpler.
