In 2020, a Ludhiana-based policyholder of a popular bike insurance company died in an accident. When his family filed a claim post his death, the insurer denied the claim on the grounds that the deceased was riding a bike of more than 150cc capacity. This was against the terms and conditions of the policy.
While the insurer eventually paid the claim and removed the clause from its policies, it sparked a debate among people about whether an insurance company can deny an accident claim based on the engine capacity of a bike.
In this article, we will discuss if an insurer can deny an accident claim based on the engine capacity of the bike to help you find the best two-wheeler insurance online.
Can An Accident Claim Be Denied Based on the Bike Engine Capacity?
Yes, if the insurer has specified in the policy document, it can use the clause to deny the accident claim. While in the Ludhiana case, the insurer paid the claim amount, it was because it identified the error and took corrective measures.
However, if an insurer wants to deny the claim, then it can be based on the engine capacity of the bike. Remember, when you buy insurance, the insurer has to specify all the clauses in the policy document. Therefore, it cannot deny any claim if the clause is not mentioned in the said document.
When Can an Insurer Deny a Bike Insurance Claim?
Most people tend to overlook the fine print while auto buying insurance. Here are reasons that can lead to the denial of your claim in bike insurance:
- Misrepresenting facts: On many occasions, bike owners tend to miss or falsify the details of the accident to get a better claim amount. If the insurer finds out that you have misrepresented the facts, then your claim request can be denied.
- Unlawful Acts: If a bike owner consumes alcohol and rides his bike, he cannot raise a claim if he meets with an accident in the inebriated state. Also, if a rider meets with an accident while performing a bike stunt, then his claim can be denied.
- Driving without a valid licence: In India, bike owners tend to lend their bikes to friends and colleagues. While doing so, it is important to ascertain that the person you are lending your bike to has a valid driving licence. If a person without a licence meets with an accident, then your claim will be rejected.
- Faulty parts: While accidents can happen because of a range of external factors, there can be times when your bike meets with an accident due to loose brakes or bad tyre. In such conditions, the insurer can reject your claim application.
- Policy clauses: This is where the Ludhiana incident fits in. Insurance companies specify the clauses under which they can deny a claim on the policy document. Hence, before you buy a policy, make sure that you read the fine print carefully.
When you opt for an online 3rd party bike insurance or a comprehensive plan, it is important to make sure that you understand the terms and conditions. While most of the reasons for rejection are due to the inappropriate use of the bike, there can be some clauses in the online two-wheeler policy that you might not be aware of. Therefore, it is prudent to spend some time going through the insurance for the bike and avoid the hassle later. Before you buy bike insurance online, compare insurers and plans and read reviews about their claim experiences and make an informed decision.