What is IRDAI Claim Settlement Ratio for Bike Insurance?

Buying a bike insurance policy is the best way to financially cover yourself in the time of need.  To get the most out of your bike insurance policy you must understand its coverage.

Your bike insurance policy becomes your saviour during accidents and damages. To get a compensation for a loss you suffered, you must intimate your insurance company about the damage. This intimation is made in a form of a “Claim” against your bike insurance policy.

  • What Is a Bike Insurance Claim?
  • What Is Claim Settlement Ratio?
  • What Are The Types Of Claims?
  • How To Make A Bike Insurance Claim?
  • Things to Remember about Claims:
    • Claim Rejections
    • Claim Settlement
    •  Documents Needed While Filing A Claim
  • Why Comparing Claim Settlement Ratio Is Important?

What Is a Bike Insurance Claim?

Let’s spare you the complicated dictionary definition of claims. Simply speaking, a claim is a process of informing your insurer in case you suffered a loss.

The number of total claims settled by an insurance company in a year can be worth crores of rupees. As per IRDAI, in the financial year 2015-16, a total of Rs 15,428.54 crore was claimed in motor insurance. This is a sum total of the number of paid claims and the estimate of unpaid liabilities for the insurance companies during a year.

What Is Claim Settlement Ratio?

Claim settlement ratio is the percentage of total claims approved and settled to the total claims received in one financial year. IRDAI provides the claim settlement ratio for each insurance company registered under them.  Considering the claim settlement ratio of an insurance company  is  important to measure a company’s performance and customer satisfaction. The ratio helps you to gauge the reliability of a two-wheeler insurance company

Formula for Claim Settlement Ratio:

The general rule is that higher the claim settlement ratio, the more trustworthy the insurer.

What Are The Types Of Claims?

  Cashless Claims Reimbursement Claims
Meaning When you make a cashless claim against your bike insurance policy, you do not pay for the entire repairs amount from your pocket. When you make a reimbursement claim against the own damage cover of your two-wheeler insurance, you pay for the repairs from your pocket first. The insurer then pays you back.
Garage network The insurance company has its own network of garages.
Your bike is repaired in any one of these.
You choose a garage that is not necessarily a part of the insurer’s network.
Your bike is repaired from any garage of your choice.
Deductible You do not pay anything except the deductible.
Your insurer takes care of the rest.
You pay the entire amount for repairs, including the deductible.
Your insurer subtracts the deductible, and reimburses the repair cost to you.

How To Make A Bike Insurance Claim?

You make a claim in either of the three cases:

  1. Third-party liability
  2. Own vehicle damage
  3. Total loss of vehicle in case of theft or fire etc.

The process is as follows:

Stages Third-party Own-damage Theft
Step 1 If your bike causes damage to a third party, immediately inform the police and your insurer.
If you are a victim of the accident, take the insurance details of the third-party vehicle, and inform their insurer.
In the case of any loss or damage to your own bike, inform your insurer and the police immediately.
If you do not inform within the stipulated time, your claim could be rejected.
If your bike is stolen, immediately inform the police and your insurer.
Step 2 After being informed, the insurer transfers the matter to the motor insurance claim tribunal. After being informed, the insurer appoints a surveyor to examine the case.
After a survey of your bike, the insurer sends an approval to the garage to begin the work.
Submit your bike documents to your insurer.
These include the registration certificate of the bike, your licence, etc.
You might also have to submit the original bike keys.
Step 3 The tribunal then decides the amount to be paid as compensation. Your insurer then pays or reimburses the repairs cost as per the terms and conditions of your policy. If the police cannot locate your bike within a reasonable time period, it issues a non-traceable certificate.
Your insurer then settles your claim as per the terms and conditions of your policy.

Things to Remember about Claims:

Claim Rejections

In some cases, your insurer might reject a claim. This may sound impracticable. But, it is possible. Your insurer has the right to reject your claim in the following cases:

  • If you provide false or incomplete information while filling the application form for buying the policy.
  • You do not inform your insurer about the accident within the given time frame.
  • You were riding under the influence of intoxicating substances.
  • You do not have a valid driver’s license.
  • You have a second-hand bike, but the insurance policy is still in the name of the previous owner.
  • You get your bike repaired without or before informing your insurer.
  • You use your bike for illegal activities.
  • If a two-wheeler is badly damaged and the insurer believes that the repair cost will be higher than the value of your two-wheeler.
  • Damages caused when driving outside the country.
  • When damage is caused deliberately.
  • Using the bike in an area with the chances of a potential nuclear attack.
  • Using the bike in a war zone.
  • Electrical or mechanical breakdown.
  • If the bike is used for purposes other than the permitted use, for example: commercial use, your claim will be rejected.
  • In the case of consequential loss.
  • Lapsed bike insurance policy.

Claim Settlement

Ideally, you would want the entire claim process to be smooth. To ensure a hassle-free claim process, be mindful of these things:

  • Always have a valid license.
  • Do not drink and ride.
  • Follow the traffic rules.
  • Read the policy documents carefully.
  • Be fully aware of your coverages and exclusions.

 Documents Needed While Filing A Claim

Keep the following documents ready while filing a claim:

  • The copy of the registration certificate of your two-wheeler.
  • Police report or FIR.
  • The copy of the insurance policy.
  • The copy of your license.
  • Original repair bill, cash receipts, etc.

Why Comparing Claim Settlement Ratio Is Important?

By comparing the Claim Settlement Ratios, by IRDAI, of different bike insurance companies, you will get a rough idea about the likelihood of your claim getting settled. While this does not entirely depend on the Claim Settlement Ratio, a basic comparison leads to a better understanding of the reliability of an insurance company.  

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