Bike insurance is not only a legal formality but also an important financial safeguard. Although third-party bike insurance is widely known among riders, many are unaware of own-damage cover, which serves as an additional level of protection. Own-damage insurance has become popular over the last few years due to its affordability and customisation capability. Read on to learn all you need to know about own-damage bike insurance, why it is important, what it covers and more.
What is Own-Damage Bike Insurance?
Own-damage bike insurance is a standalone policy that covers the damage to your two-wheeler due to accidents, theft, fire, natural calamities or vandalism. In contrast to third-party insurance, where the policy only covers the liability to other parties, this policy provides financial security for your own vehicle.
As of September 2019, the IRDAI has permitted vehicle owners to buy own-damage cover and third-party cover separately to offer more flexibility. Digital-first insurance companies such as ACKO General Insurance allow customers to easily purchase or renew own-damage policies online, ensuring fast policy issuance and minimal documentation.
Importance of Own-Damage Bike Insurance
Own-damage bike insurance offers an important layer of protection that cannot be provided by third-party insurance. This is why it is important:
Protection Against Accidental Damage: This policy covers the cost of repair in case your bike is damaged in an accident on the road.
Coverage for Theft and Natural Disasters: Provides financial reimbursement in case your bike is stolen or damaged by events such as floods, fire or earthquakes.
Lower Out-of-Pocket Costs: Reduces the burden of paying for unexpected repair or replacement costs.
Customisation with Add-ons: Lets you enhance your coverage with add-ons such as zero depreciation or engine protection.
Peace of Mind for Bike Owners: Ensures that you are not left unprotected in case of major damage or loss.
Difference Between Own-Damage and Third-party Bike Insurance
Own-damage and third-party bike insurance serve different purposes. While one is legally mandatory, the other offers crucial protection for your own vehicle. Here is a quick comparison:
Feature |
Third-Party Insurance |
Own-Damage Insurance |
Coverage |
Covers damages caused to others (person/property) |
Covers damage to your own bike due to accidents theft etc. |
Legal Requirement |
Mandatory under Indian law |
Optional but highly recommended |
Beneficiary |
Third-party individuals or property |
Policyholder (bike owner) |
Add-ons |
Not available |
Multiple add-ons available |
Premium Regulation |
Fixed by IRDAI |
Varies based on bike location insurer etc. |
Claim Type |
Legal liabilities only |
Own vehicle damage or loss |
Recommended For |
Basic legal compliance |
Riders seeking complete financial protection |
Many bike owners opt for a comprehensive plan or a combination of third-party and standalone own-damage cover from providers like ACKO General Insurance for full protection.
What is Covered Under Own-Damage Bike Insurance?
Own-damage bike insurance is designed to protect your two-wheeler from a wide range of risks and unforeseen events. Here is what is typically covered:
Accidental Damage: Covers repair costs if your bike is damaged in a road accident.
Fire and Explosion: Provides financial protection if your vehicle is damaged due to fire or explosions.
Natural Calamities: Covers damage caused by floods, earthquakes, storms, cyclones and other natural disasters.
Theft or Burglary: Offers compensation if your bike is stolen or irrecoverably lost.
Vandalism or Riots: Covers damages resulting from civil disturbances, riots or malicious acts.
Transit Damage: Protects against loss or damage during transportation by rail, road, inland waterways, lift or elevator.
What is Not Covered Under Own-Damage Bike Insurance?
While own-damage bike insurance offers wide protection, there are specific situations and damages that are excluded from coverage. Here are the common exclusions
Normal Wear and Tear: Damages due to ageing, depreciation or regular use are not covered.
Mechanical or Electrical Failures: Breakdown of the bike’s internal components due to faults is excluded.
Driving Without a Valid Licence: Claims are rejected if the rider does not hold a valid two-wheeler driving licence.
Riding Under the Influence: Any damage caused while riding under the influence of alcohol or drugs is not covered.
Illegal Use of the Vehicle: Damages resulting from participation in illegal activities or racing are excluded.
Consequential Losses: Indirect losses (like income loss due to bike unavailability) are not covered.
Damage Outside Geographical Limits: If the damage occurs outside India or beyond the policy’s coverage area, claims may not be accepted.
Popular Add-ons for Own-Damage Bike Insurance
Add-ons are optional covers that supplement your basic own-damage bike insurance. These are some of the most common ones that are provided by insurers:
Zero Depreciation Cover: Provides complete settlement of the claim without considering the depreciation of the parts that are replaced.
Engine Protection Cover: Covers damage to the engine caused by ingress of water or oil leakage, which is normally not covered in standard plans.
Roadside Assistance Cover: Covers emergency assistance such as towing, jump starting of battery or fuel delivery in the event that your bike breaks down.
Return to Invoice Cover: Covers the initial value of your bike in case of total loss or theft, as opposed to the current market value.
Consumables Cover: Covers the expense of items such as nuts, bolts, lubricants and brake oil, which are not normally covered in general claims.
No Claim Bonus (NCB) Protection: Protects your built up NCB even when a claim has been made.
Factors Affecting Own-Damage Bike Insurance Premiums
The premium for your own-damage bike insurance is influenced by multiple factors. Understanding these can help you make informed choices and potentially lower your costs.
Bike’s Age and Model: Newer and high-end bikes usually attract higher premiums due to higher repair or replacement costs.
Insured Declared Value (IDV): The current market value of your bike; a higher IDV leads to a higher premium.
Location of Registration: Bikes registered in metropolitan or high-traffic zones may have higher premiums due to greater risk exposure.
Add-on Covers Selected: Opting for multiple add-ons like zero depreciation or engine protection increases the overall premium.
Previous Claims History: Frequent claims can lead to a higher premium or loss of No Claim Bonus (NCB).
Security Features Installed: Anti-theft devices approved by ARAI can reduce the premium as they lower the risk of theft.
Voluntary Deductibles: Choosing a higher deductible (the amount you pay during a claim) can help reduce your premium.
Conclusion
Own-damage bike insurance is essential for safeguarding your two-wheeler against unexpected events like accidents, theft and natural calamities. While third-party insurance is legally required, own-damage coverage gives you financial protection for your own losses, offering peace of mind and long-term savings. Leading insurers like ACKO General Insurance provide flexible, affordable own-damage policies that can be customised with useful add-ons. Whether you are a daily commuter or an occasional rider, investing in the right cover ensures you are prepared for whatever the road brings.
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