What is CKYC and Its Impact on Bike Insurance

When you purchase your bike, the first thing you must do as a responsible bike owner is to buy two-wheeler insurance. However, recently the regulatory authority has bought changes in the process of the policy purchase. Just like how banks ask for KYC, now insurers will do a CKYC. What is this process? How does this benefit you? Let’s find out.

What is KYC?

Know your customer (KYC) is the process of having your details verified. It is a common occurrence in banks and how they require you to do this process every year. This helps the bank authorities remain in the loop if you have updated your details such as your address or contact number. While KYC deals with the information being stored by one single entity, CKYC stands for central know your customer. In this, it is the central government that would be storing all the data. The data provided by you goes into the central KYC registry. This helps them in creating a database of everyone’s information. The benefit is that it eliminates the requirement of having to do KYC each time, thus, saving your time as well as that of those in charge of verifying and consolidating it.

KYC in bike insurance

As per a recent directive from the central authority for insurance, insurance companies must have new customers go through the CKYC procedure. This means, if you are looking to buy a comprehensive motor insurance policy for your bike, you need to do this procedure. Generally, when you purchase an insurance policy, like bike insurance, you are required to furnish documents such as an Aadhaar card or driver’s license as identity and address proof. Along with this, you need to provide information about your bike such as the purchase receipt, chassis number, and registration number. These details are mentioned in your policy document. However, if you relocate or change your contact details, your insurer might not know about this change. One of the reasons that the CKYC process has been mandatory for all insurance buyers is to avoid such situations. For example, your current two-wheeler insurance policy is about to expire, but you are contemplating opting for a new policy. You have recently relocated to another city, but this has not been updated in your insurer’s database. If you were to file a claim; since your insurer does not have your updated details, this might cause problems with your claim process*. With the central KYC however, your details get updated automatically in this database, which then notifies the insurer about it. This benefit can help reduce any issues which might arise at the time of your claim process.

What is CKYC Number in Insurance?

The CKYC (Central Know Your Customer) number is a unique 14-digit identifier assigned to individuals who register their KYC details with the Central KYC Registry. This system, governed by the Government of India, simplifies the KYC process by creating a centralized database accessible by financial institutions, including insurance providers. In the context of insurance, the CKYC number ensures hassle-free policy purchases and renewals. It eliminates the need to submit KYC documents repeatedly for different policies or insurers. Once your CKYC is registered, insurers can access your verified details directly from the registry. To obtain a CKYC number, you need to provide valid identity proof, address proof, and a recent photograph while applying for any financial service. By streamlining KYC compliance, the CKYC system enhances efficiency and reduces documentation errors, making it a crucial component for modern insurance processes.

Features of CKYC in Bike Insurance

1. Unique Identification: Assigns a 14-digit unique CKYC number to each individual, ensuring consistent identification across financial institutions.
2. Centralized Database: Maintains a unified repository of KYC documents accessible to banks, insurers, and other financial service providers.
3. Streamlined Process: Eliminates the need for multiple KYC submissions, simplifying transactions with various institutions.
4. Secure and Confidential: Ensures that customer data is stored securely and is accessible only to authorized entities.
5. Wide Applicability: CKYC is applicable for banks, insurance companies, mutual funds, and other financial services.
6. Digital Access: Enables seamless verification of KYC details electronically, reducing paperwork.
7. Updates and Portability: Allows easy updates to personal information and ensures the updated details are available across all linked institutions.
8. Compliance: Helps meet regulatory requirements by maintaining uniformity in customer identification across sectors.

CKYC simplifies processes, enhances security, and improves customer convenience in the financial ecosystem.

How is this Process Done?

At the time of purchase of your insurance, you are required to provide either of these documents to your insurer:

1. Aadhar card
2. Driver’s license
3. PAN card
4. Passport size photograph

The details mentioned in these are then entered into the central registry to create a database of your information. A 14-digit CKYC number is generated which gets linked to your proof of identification. Once the details have been verified properly, they get stored in the registry.

How to Claim Two-Wheeler Insurance?

Since CKYC can play a vital part when you claim two-wheeler insurance, here is how can file it properly:

1. Inform your insurance company

The first step of filing the claim is to inform your insurer. There are two ways to do this: By calling them through their claim helpline number or by filling up a form on their website.

2. Register an FIR

File an FIR so that the legal process can be initiated. It is mandatory by the insurer that you file an FIR. If the damages are minor, filing an FIR is not necessary. However, do read the policy document to know more about this.

3. Take photos and videos

It is important to take photos and videos of the damages caused to your vehicle. If there is a third-party vehicle involved, document the damages caused to that vehicle as well. This helps in ensuring the genuineness of your claim. Once this evidence has been collected, submit it to your insurer for further verification of your claim.

4. Submit documents

When filing a claim, you are required to submit documents that help your insurer verify your claim. The following documents need to be provided:

1. Copy of the two-wheeler insurance
2. Copy of your driver’s license
3. Copy of the FIR
4. Copy of the registration certificate

5. Get your bike inspected

Based on the details provided by you, the insurer will send a surveyor to inspect the damages. The surveyor will collect all the details and submit them to the insurer.

6. Wait for the claim settlement

Your insurer will verify all the details collected by the surveyor. If the insurer is satisfied, they would offer you two methods of compensation: 1) You can get the bike repaired and pay for the damages. The insurer will reimburse you for that *. 2) Your bike will be taken to a network garage. Once your bike is repaired, the garage will directly bill the insurer, who will pay the garage owner through the cashless claim method *.

Difference between Normal KYC, eKYC, and CKYC?

Conclusion

With this initiative being launched by the government, it might things easier for you when looking to buy or renew bike insurance in the future. If you do not own a policy and are looking to purchase one, use the bike insurance calculator to get a quote for the policy you are looking for. *Standard T&C apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.