It is common knowledge that two-wheeler insurance is a compulsory requirement and a part of your vehicle documents. Registration is mandatory to ride your bike on the road, but it also needs compliance with the Motor Vehicles Act. This law stipulates the requirement for a two-wheeler insurance policy.
When buying a new bike, the vehicle dealer offers you a bike insurance
plan. But it is your, i.e., the vehicle owner’s responsibility to renew such a policy periodically. Non-compliance with such a requirement can attract legal as well as financial consequences.
Bike insurance renewal can be done with either a liability-only plan or a comprehensive plan. You are free to opt for either insurance policy, irrespective of your previous insurance coverage. This gives policyholders the freedom to either increase or decrease the coverage based on their requirements. While a third-party coverage offered in a liability-only plan is the bare minimum requirement as per the law, it has limited coverage from legal liabilities occurring due to injuries or damages to a third person. The same is not the case for a comprehensive policy, where it offers an own-damage insurance cover. This ensures protection for damages occurring to your bike too.
Here are the regulatory and monetary impacts of the untimely renewal of your insurance policy.
Legal implications of not renewing your policy
- Challans and fines are the first legal consequences of missing your bike insurance renewal. When stopped by a traffic official for inspection of your vehicle documents, you generally need to provide your driving license, vehicle’s registration certificate, PUC certificate and a valid insurance policy. Failing to provide a valid insurance certificate attracts a hefty penalty of ₹2000 for the first offence, whereas such penalty increases to ₹4000 for every subsequent offence.
- In addition to the above penalties, the court is also authorised to impose a jail term for a period of three months. This imprisonment can either be in addition or in substitution of the above fine amount.
- The third consequence of failing to renew your policy is a legal liability to compensate for injuries or damages. Such a situation arises only in the case of an accident where injury or damage is caused to a third person. Here, the tribunal decides on a compensation amount, which, in the absence of policy with third-party coverage, is required to be borne by you, the policyholder.
These above-mentioned legal consequences can be avoided when you ensure timely renewal of your two-wheeler insurance policy. Other than legal consequences, financial implications of not renewing on time include loss of coverage, loss of personal accident cover and even loss of NCB benefits.
During an accident or collision, it isn’t only the third person’s vehicle that faces damages, the repairs to your bike can also be made when you have a comprehensive policy. Moreover, any coverage for injuries to you, the rider, is not available, as the personal accident cover bundled in your insurance coverage also ceases. Lastly, if you have a comprehensive policy not renewed longer than 90 days after the end of its coverage, it loses the no-claim bonus (NCB) attached to it. Thus, insurance renewal
of your two wheeler policy restores the bike insurance price to its original amount.
Hence, you must ensure that your policy is renewed on time, helping you avoid not just legal consequences, but also financial ones. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.