Home / Two-wheeler Insurance / Articles / Bike insurance background checks in India: Why & how?

Bike insurance background checks in India: Why & how?

Team AckoJan 17, 2024

Bikes are a popular choice of commute in India due to lower maintenance costs, easy manoeuvrability, and high mileage output. But these two-wheelers are also more prone to accidents as compared to cars. Because of this, buying a good bike insurance plan is necessary, not just for compliance but also for a financial backup.

Since bike insurance companies give a financial cover to the bike owner (as per the terms of the policy), they must ensure that the claim amount goes into the right hands. To ensure this, insurers conduct thorough background checks on the bike owners. So, in this article, we will shed light on why and how bike insurance background checks are helpful for an insurance company.

Contents

Bike insurance background check: Why & how?
4 reasons why bike insurance companies conduct a background check on users
What things do insurance companies check?
In a nutshell
Frequently asked questions

Bike insurance background check: Why & how?

Fraud is one of the main concerns for bike insurance companies, and they need to ensure that bike owners do not engage in the same. Thus, comes into the picture bike insurance background checks. Here are some common types of frauds customers engage in.

Deceptive/incomplete information

Sometimes bike owners share incorrect information with the insurer. This can be about past damage to the bike or claiming an amount more than the actual repair cost. If insurance companies do not cross-check such claims, then the payout would be more than the actual claim. This comes under fraud and people must avoid engaging in it.

Bogus customer profiles

A fraudster would create a fake customer profile and then raise claims for non-existent injuries or damages. Checking the user for accurate identities becomes crucial in this case. Going through the evidence of the accident (CCTV footage, pictures, witnesses, etc.), and inspecting the damaged vehicle is necessary.

Punishable fraud

One of the major examples of fraud is to report a fake bike theft and claim the full value of the bike. A non-traceable report of the bike from the police is a crucial document in this case. This is a type of insurance fraud that can attract serious punishment like imprisonment.

4 reasons why bike insurance companies conduct a background check on users

Here are four major reasons why insurers run a background check on bike owners or a third-party person that has made a claim.

1. To rule out identity theft

A person with malicious intentions would steal a bike owner's identity to get a bike insurance policy and then raise a fake claim. Here the insurance company contacts the real bike owner to complete the claim process. This can be a hassle as there is no real accident. Conducting a background check can ensure that the real bike owner raises a claim when necessary.

2. To create custom products

Nowadays, insurance products including bike insurance can be customised to meet the needs of a bike owner. To achieve this, bike insurers need specific data related to the bike owner. Custom products can reduce the cost of the policy and provide better services. Thus, a background check is helpful to provide a better bike insurance plan.

3. To comply with the insurance regulator

The Insurance Regulator and Development Authority of India (IRDAI), has made it compulsory for bike insurance companies to adhere to Know Your Customer (KYC) and anti-money-laundering regulations. A thorough background check is necessary as per such guidelines.

4. To ensure that a third-party claim is genuine

If the bike owner gets involved in an accident with a third party, then the third party can raise a claim against the bike owner's insurance policy. Since there is no prior KYC of the third party, the insurance company must do a complete background check on the third party bike insurance.

What things do insurance companies check?

Insurance companies need exact information of the bike owners and details about the bike. Here is a list of things that bike insurance companies look for during background checks.

Customer details

Basic user information like ID proof, name, address, residential proof, etc. is what insurers verify before issuing the policy.

Bike details

Every detail about the bike, for example, registration number, engine's cubic capacity, manufacturing year, make and model, brand, etc., is necessary for the background check.

Policy details

Bike insurance companies may ask for previous policy details like type of plan, claim history, applicable No Claim Bonus, etc. However, this does not apply in the case of new bikes.

In a nutshell

Bike insurance allows you to get a financial backup for bike-related losses (as per the policy terms). Bike insurance background checks ensure that the right person is getting compensation for the loss suffered. A background check is not a bad thing. In fact, your insurance company is acting responsibly and going one step ahead to make sure that you get compensation for a loss covered under the policy.

Frequently asked questions

Here are some questions related to bike insurance background checks in India. You can get in touch with us if you have more questions by sending an email at [email protected].

Is it possible to cancel a bike insurance policy if I am not happy with the services?

Yes, it is possible to cancel a bike insurance policy. Just make sure that you buy another plan from a good bike insurance company to ensure continued coverage. Else, you will expose yourself to not only financial losses from bike damage but also fines and penalties.

Do I need to give my employer's details while buying a bike insurance policy?

Usually, no. A bike insurance company would not ask about your job or the employer. However, this depends upon the insurance company and their rules.

Do bike insurance companies check for bike owners' police records?

Not unless there is a history of fraud. But it depends upon the terms of the insurance company and what kind of background checks they prefer.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions. Explore More: