Exceptions In A Two Wheeler Insurance Policy

A standard comprehensive bike insurance policy provides you coverage in a variety of instances such as accident, fire, theft, explosion, lightening, self-ignition, riots, strikes and any malicious damage caused to your vehicle by a third person. Since, it provides you a greater scope of coverage, it always scores more than the third-party bike insurance policy. However, let's try to understand the inclusions and exclusions of comprehensive two-wheeler insurance in detail.

Things Covered Under A Comprehensive Two Wheeler Insurance Policy

Own-damages: Coverage against loss of or damage to your vehicle caused by accident, theft, fire, explosion, self-ignition, lightning, riots, strikes or act of terrorism, natural calamities. Third-party policy: Covers only your legal liability for the damage you may cause to a third party - bodily injury, death and damage to third party property - while using your vehicle. while using your vehicle. Personal accident cover for the owner-driver subject to conditions.

Personal Damages: Any damage or loss caused to your vehicle due to accidents, theft of the vehicle, explosion, fire, self-ignition, flood, earthquake, other natural calamities as well as man-made calamities such as riots, strikes and act of terrorism.

Third-Party Liabilities: A comprehensive two-wheeler insurance policy also provides you coverage against damages or losses caused to a third-party or their properties while riding the vehicle. This may include the bodily injuries, death of a third person as well as any damage caused to their physical belongings.

Though a comprehensive insurance policy gives you a larger scope of protection, it does not completely save you from out of pocket expenses. The final claim amount that you may receive will take into consideration the different conditions and limitations within your insurance policy and you will never receive compensation for the total amount of loss or damage. Below are some of the permanent exclusions to your comprehensive motorcycle insurance policy:

1. If your insurance policy is not active, you may not be eligible to file any claim. Reasoned to this, timely renewal of your bike insurance policy is extremely important. If there is any loss or damage to the vehicle or the rider after the expiry of the policy or before its renewal, there would not be any compensation provided whatsoever. To avoid such situations, you may opt for long-term insurance policies up to a period of 3 years.
2. If the policyholder or any other person in their knowledge is riding the insured vehicle under the influence of alcohol, drugs, or any such intoxicating substance.
3. If your bike or scooter was driven by a person who does not possess a driving license.
4. Any damage caused to the engine due to leakage of oil.
5. A motor insurance policy does not cover you against any violation of the guidelines provided by your two-wheeler's manufacturer.
6. Any loss or damage caused to your two-wheeler due to terror attacks, wars, foreign enemy attack, invasion, civil war, hostilities, rebellion, mutiny, or radiation or explosion due to nuclear substance/ weapons are not covered in a standard motor insurance policy.
7. Any loss or damage done to the vehicle or self deliberately is not covered under the insurance policy.
8. Damages that are consequential in nature are not covered in the insurance policy. This includes any loss as a consequence of an action in which the policyholder or a third-party is involved. For example, damages to the engine due to hydrostatic loss which is common during monsoons. Any such loss will not be covered under a policy as the damage did not happen because of floods but because the rider cranked up the vehicle in waterlogged areas either intentionally or accidentally.
9. The bike insurance policy also does not cover contractual liabilities that the insured may have towards their vehicle. Contractual liability is any liability that arises as a result of the policyholder entering into a contract. For example, if the insured has pledged their two-wheeler to a third person (say a lender), and a mishap takes place when the vehicle is driven by the person to whom the vehicle has been pledged. However, if the policyholder is driving the vehicle even if it's pledged to someone else, they are eligible to receive compensation for any unfortunate incident.
10. If an insurance claim is rejected by the insurance provider and the case is not raised in the court within the period of 12 months, the claim cannot be recovered at any time later.

Exclusions That Can Be Included In Your Bike Insurance Policy

While you may not be able to get the permanent exclusions covered in your policy, there are certain expenses and risks that can be added to the scope of your policy by paying an extra premium to the insurer. Some of which are listed below:

Normal Wear And Tear Of The Vehicle:

With passage of time, every machine including your two-wheeler goes through certain wear and tear. Any loss due to depreciation of the vehicle is not covered in a standard motorcycle insurance policy. Reasoned to the same, every time you renew your insurance policy, the Insured Declared Value (IDV) of your vehicle is revised.

As per the guidelines laid down by the Insurance Regulatory And Development Authority Of India, the rate of depreciation on rubber, metal, plastic and nylon parts will be applied as follows:

The insured declared value of two-wheelers that are more than 5 years old and vehicles that are not manufactured anymore is determined by the insurer based on their own policies and the understanding with the insured. Also, the IDV of other accessories fitted to the vehicle (not included in the factory version of the bike) are depreciable.

However, if you get a zero-depreciation cover, the monitory value of damaged parts can be fully recovered from the insurer. The ad-on cover also takes into account the repair and replacement cost of rubber, plastic and glass parts. Opting for a zero-depreciation cover may need you to spend a little more on premium but it is certainly worth considering if your vehicle is not older than 5 years.

Limited Liability:

No matter what the extent of your loss is, the insurance provider is not liable to pay more than the insured declared value of your vehicle subject to certain deductibles. The IDV is the current market value of a vehicle is calculated based on the selling price listed by the manufacturer for a particular brand and model of the vehicle. The IDV of the vehicle can be recovered from the insurer in case of a theft or total loss of the vehicle. Total loss of the vehicle applies when the cost of retrieval or repair of the vehicle goes above 75% of the IDV.

Even in case of a total loss, the settlement amount is often less than the total cost you spend on the repair and retrieval of your vehicle. The compensation that you receive from your insurance provider will be much less than what will take you to buy a new car of the same model and make. However, you can get an invoice cover to get full reimbursement of the total value of the car. This cover can usually be opted for a period of two years when your car is brand new.

Limitations on third party claims: While there is no limit on the liability covered for injury or death, the cover for third-party property (usually the third party's car) damage is capped at Rs 7.5 lakh.

Meaning, the most valuable part of the two wheeler, your engine is not covered for non-accidental failures or malfunctions. Now, imagine a situation where the engine of the car is submerged in a waterlogged area. Starting the car in such a scenario can result in the engine seizing. This will not be covered under regular insurance. Here, adding an engine protector cover will insure the car for all non-accidental exclusions related to your engine. It is highly recommended for luxury cars. Also, consider buying if you plan to take your two wheeler  off-road and it has a low ground clearance.

Roadside Assistance:

Similarly, a 24x7 Roadside Assistance cover provides support for basic on-road breakdown situations like tyre puncture, battery jump start, emergency fuel, medical assistance, etc. which are not covered under the regular policy. .

Extended Accident Cover:

A basic personal accident cover for the owner-driver is compulsory provided the owner holds a valid driving licence and is able to drive the car. However, the passengers or a hired driver are not covered under personal accident insurance. There is an optional add-on personal accident cover for the passengers of your car as well as separately for your paid driver.

The standard motor cover is applicable only in India.

However, the geographical area of motor policies may be extended to include Bangladesh, Bhutan, Nepal, Pakistan, Sri Lanka and Maldives for a flat additional premium of Rs 500 per vehicle, irrespective of the class of vehicle. Such geographical extensions, however, specifically exclude cover for damage to the vehicle, injury to its occupants, third-party liability in respect of the vehicle during air passage or sea voyage for the purpose of ferrying the vehicle to the extended geographical area. Within Indian borders, damages during transit by road, rail, waterway and airlift are covered.

The Deductibles: A deductible is that portion of any claim, which is not covered by the insurance company, which the insured has to compulsorily pay out of his pocket at the time of claim settlement. Only the balance amount is payable by insurance company. However, you can get additional discount on your premium by adding a a voluntary deductible amount to the compulsory deductible. If your car is old you could consider going for a voluntary deductible to get a good deal on the premium.