While regular servicing and maintenance of old bikes are necessary to upkeep their performance, owners also need to opt for at least a third-party two-wheeler insurance policy to ride the bike legally on Indian roads.
Here’s a brief overview of an insurance plan for old bikes that you need to know.
Insurance Policy for Old Bikes:
Often, people tend to forget renewing or buying an insurance policy for their old bikes and this should not be the case. Regardless of whether you own a new bike or an older one, having a valid insurance policy for it is necessary. Moreover, this is specifically to stress on the fact that one should renew/buy insurance for old bikes.
Primarily, it is mandated by law in India to have at least a third-party bike insurance to ride your bike legally. On the other hand, a comprehensive two-wheeler insurance plan covers the rider-owner financially against any cost incurred due to accidents, damage, or theft of the insured vehicle.
Hence, you should renew the two-wheeler insurance policy for your old bike in case it has expired or buy a new one before riding it.
Like other vehicles, a two-wheeler is also not immune to depreciation. Hence, the insurer provides a detailed list of depreciation rates in different stages of a bike’s lifetime, as per Indian Motor Tariff. For instance, for vehicles between the age of 1 and 2 years, the depreciation rate is 10%.
Thus, the maximum coverage offered by the insurer of an old bike depends on the agreed-upon insurance depreciation value.
Importance of Renewing Insurance for Old Bikes
Every two-wheeler insurance plan expires after a certain time. It means after the expiry date, bike owners need to renew the insurance plan for their vehicle to continue enjoying the benefits it entails.
Besides end-to-end coverage in case of a comprehensive policy, you can also get the benefits of No Claim Bonus (NCB) on the policy premium upon renewal against the non-claim years. If you fail to renew the insurance on time, you may lose these benefits.
Besides, the repair and cost of parts replacement of old bikes are usually higher than new ones. Hence, with this insurance plan, you can cover most of such expenses if the need arises.
A comprehensive bike insurance cover safeguards the owner against all the expenses in case of the following instances:
- Damage due to accident or fire or earthquake or any such instances
- Liability arising due to damage caused to third-party property by the insured bike
- Liability arising due to bodily injury of a third party due to an accident where your bike was involved.
Disadvantages of not renewing an insurance plan for an old bike
As per Motor Vehicle Act, 1988, in India, it is mandatory for every vehicle, including bikes, to have at least a third party bike Insurance plan. Such a policy covers expenses incurred due to damages caused to a third-party person, vehicle or property.
Otherwise, for riding an uninsured bike, an owner needs to shell out a penalty of Rs.2000 and/or 3-month imprisonment for a first-time offence. For the second time, one needs to pay Rs.4000 and/or 3-month imprisonment.
It is applicable for old bikes as well. Hence, an expired bike insurance policy can lead to paying hefty penalty fees or even legal prosecution.
Besides the legal aspect, without a comprehensive insurance policy for old bikes, you need to liquidate your savings to cover the cost of repairing, servicing, etc. if the vehicle faces an accident, gets damaged, etc.
Similarly, in case of theft or complete damage of the bike, you cannot claim money to replace it or buy a new one.
In case of a rider-owner’s personal injury, he/she cannot get coverage for hospitalisation or treatment expenses. Likewise, in case of demise, the family of the deceased would not get compensation from the insurer.
Things to Keep in Mind before Buying Insurance for an Old Bike
While several insurance companies are offering motor insurance policies, it is necessary for you to choose the best cover for your old bike.
Following are some crucial pointers that you should consider while purchasing a comprehensive two-wheeler insurance plan for your old bike.
a) No Grace Period
Every bike insurance policy comes with a policy term. After that, you need to renew the plan to continue enjoying its benefits. However, every insurance company offers a grace period which includes the time between policy expiry and policy renewal.
However, in most cases, two-wheeler insurance plans do not entail any grace period. Hence, you need to renew an insurance plan for an old bike before its expiry date to avoid any loss of coverage benefits.
b) Depreciating IDV of Bike
Since the depreciation of a bike changes every year, policyholders need to know the IDV of the bike or Insured Declared Value before buying one cover. In case of theft and complete loss of an old bike, an insurer will pay that particular amount and not the bike’s purchase or invoice price. It’s always recommended to go for a higher IDV for a better Safety net.
c) Lower Premiums
Since the IDV of your old bike decreases with time, the premium of an insurance plan also decreases. However, you should not show the IDV of your bike lower than its actual one to pay a lower premium.
This is because if you need to claim in case of theft or irreparable damages, you will get a lesser amount. Bike owners should, therefore, adjust the IDV accordingly.
d) Option for Add-ons
Most insurers offer add-on cover in two-wheeler insurance plans. You can purchase add-ons with your primary comprehensive insurance plan for your old bike by paying a little higher premium.
You can consider purchasing a zero depreciation Cover, tyre protect cover, etc.
Factors that Decide the Insurance Premium for an Old Bike
The premium of an old bike depends on various factors. Following are some of them:
- The engine capacity of the bike.
- Insured Declared Value of the bike. Lower IDV of a bike ensures a lesser premium amount.
- Safety equipment was available. The older bikes with Automotive Research Association of India (ARAI)-authorised safety gear lower the premium.
- No Claim Bonuses
- Bike’s age.
- The number of add-ons. More number of add-ons means a higher premium.
One can also access an online bike insurance calculator to estimate the premium of an old bike.
Choose Comprehensive Two-Wheeler Insurance for End-to-End Cover
While a third-party bike insurance policy is mandatory in India, irrespective of the age of the vehicle, it only provides limited coverage. If you have the budget, then go for comprehensive bike insurance as it ensures that your precious possession is protected against theft, fire, and natural calamities.
However, the features and specifications of a comprehensive two-wheeler insurance plan might vary with insurers. Thus, compare and check the details of such insurance plans to make an informed decision.