Cancellation of Two Wheeler Insurance

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The market is flooded with insurance companies who promise to offer you the best service at competitive price and great benefits. It is only logical that you as policy buyers do research for the best insurers who can provide the benefits you are looking for at negotiable and affordable price to you. There are two ways you can buy an insurance, online and offline. Obviously the perks for online shopping and purchase is higher. Because it offers all the information you want to know at your fingertips, you can compare quotes from different insurance providers, compare benefits, and compare prices offered on the third-party website and so on.

Owning an insurance is mandatory under the law of Motor Vehicle Act 1988. It is mandated by the IRDA that every vehicle owner commercial or personal should be insured at least with Third-Party liability cover. Third-party policy was introduced to impart a sense of safe driving among the riders where no one is hurt. If there is such situation where third-party property or person is hit by the insured vehicle, then he/she shall be liable to pay for the damages caused to either property or person.

The second type of Insurance is Comprehensive policy which provides protection to the bike and the rider against unfortunate situation where either of them is hurt. It provides protection for own damage, dents, scratches, accident, third-party cover, personal accident, theft, natural calamities, man-made calamities and so on. Since the coverage is so extensive, the premium is higher for this policy compared to third-party cover. But unlike third-party cover, you can enhance this basic cover by buying few add-on cover like zero-depreciation cover, pillion rider protection, no-claim bonus cover, etc. These will also add more value to your basic policy. You can avail these add-on covers for a little extra premium.

When you buy an insurance, there is always a line reading ‘please read the documents carefully before signing’ and we always tend to ignore this line and sign the documents right after reading the benefits and coverage. Read the document carefully to know what is covered and what is not covered to have a clarity. The validity for two wheeler insurance is generally one year, unless you have chosen a long-term cover.

At any point in time if you are not satisfied with the insurer for either for personal or service dissatisfaction reason, you can definitely cancel the policy. In a fierce market, the customers are lured with schemes, offers, and discount on policies which will only tempt you to switch over to a new insurer. And yes, you can do so.

Canceling Bike insurance:

• You can cancel the insurance policy on two times, during a policy period or after expiration. It is definitely a myth that you have to complete the policy year to change or cancel the insurer.
• You can cancel the policy during a policy year if you have not made any claim in that year. Once you intimate the insurer that you are canceling the policy all the benefits will be annulled.
• You do not have to cancel the policy if you are buying a new bike, you only have to update your policy to a new registration. If the new bike has higher engine capacity then you may have to pay the difference amount in the premium because higher the cubic capacity, higher the premium.
• If you are transferring the ownership of the insurance policy, cancellation is not required there is a provision for the same. Supporting documents for the transfer is required.
• The process of cancellation will be complete only if you replace the old policy with a new one. The vehicle you own should be at least insured with third-party liability. Supporting documents is needed for the closure with the old insurer. So if you do not have an alternative insurance cover, cancellation is not possible.

Procedure to cancel two wheeler insurance policy:

• Generally the insurance company prefers to be informed at least a week or 7 days in advance. Here are the steps you need to follow:
• Contact the office of the insurer and inform that you are intending to cancel the policy. Make sure that you do it before renewal time to save from further charges.
• Submit a written application to the insurer as directed by their official and make sure you submit a notice 7 days or a week in advance.
• If you have already bought a new insurance from a different insurer, attach a copy of the same along with the application as an evidence for cancellation with the current insurer.
• A few paperwork have to be signed and duly filled by you to terminate the insurance policy and the agreement between both the parties. Post this, a copy of the cancellation document will be handed over to you.
• The insurer will retain a minimum premium of Rs.100 and the balance will be refunded to you on pro-rata basis as per the insurance policy.
• A minimum of Rs.25 will be levied as cancellation fee by the insurer if the vehicle was owned by a blind or differently abled person. Else, the cancellation charges depends on the insurer and the company policy.

If you are switching to a different insurer for lower premium, compare the benefits and perks between the two. At the time of purchasing the two wheeler insurance, the insurer provides ‘cooling-off’ period. During this period even though you have already purchased the insurance from the current provider, you can cancel the policy if you have a better offer. The cooling off period is usually 14 days during which if you cancel the policy, the cancellation charge will be less or nil. If you wish to cancel the policy after this period and in initial months, the charges will be levied accordingly. Do not contemplate on switching over to a different insurer only based on the premium rates. You should always gauge the insurer, based on their, claim paying capacity, company background, ranking, insurance plans, features in the policy, etc. Read the document carefully before you sign it because you will not be liable for any refund after the completion of 8 months in a policy period.