Can a Claim Filed for Accidental Damage Be Rejected Due to Bike’s Engine Capacity?

In Ludhiana, an insurance provider initially rejected a personal accident claim because the bike engine capacity exceeded the prescribed limits. Can the insurer do that? Read on to know the full details.

Bikers today have many options to choose from while purchasing a bike. Moreover, many people today prefer bikes with relatively higher engine capacity and power than the usual 110-125 cc commuter bikes. Therefore, you can see an increasing number of bikes with an engine capacity of 200-350 cc on Indian roads today.

Buyers of such high-end bikes usually take adequate bike insurance coverage to minimise expenses in the case of any mishap. However, can an insurer reject a claim based on a bike’s engine capacity? A 2020 incident in Punjab brings forth this question.

What Was the Incident?

On 19th April 2020, a rider in Ludhiana, Punjab, met with a tragic accident and died while riding his bike. The deceased rider had personal accident insurance with death benefits as part of his comprehensive two-wheeler insurance policy.

But the insurer initially denied the accidental death claim by the deceased policyholder’s family as the insured person rode a 346cc bike. The insurer communicated to the nominee that the bike engine capacity was above 150cc. Hence, the claim was not payable under policy terms and conditions.

Can an Insurer Reject Accident Claim Because of a High-Capacity Bike Engine?

The requirement for a bike engine to be below 150cc is an outdated exclusion clause many insurers have now done away with. Interestingly, in the above case, the insurer later paid the claim amount to the deceased’s family and removed the particular exclusion from all its old policy products in October 2020.

But the incident highlights that certain backdated clauses can be the reason for denying an otherwise legitimate claim. Therefore, always be careful about the policy terms and conditions while purchasing bike insurance to save yourself from later hassles.

What Should Policyholders Do to Ensure Hassle-Free Claim Settlement in the Future?

  • Read the Terms Carefully

Policy buyers are usually aware of the benefits provided in a particular bike insurance policy. However, it is equally important to carefully go through the fine print and understand the various policy terms and conditions.

  • Pay Special Attention to General Exclusions

Every bike insurance policy has certain exclusion clauses, which is a normal practice. These clauses may list certain incidents or situations when the insurance claim can be denied, such as driving without a helmet, driving under the influence of alcohol, etc.

A policyholder should thoroughly go through these clauses. If you find a particular clause that may seem unclear or backdated, then ask for an explanation or demand its exclusion.

  • Insurer’s Reputation

Don’t just consider the benefits and the cost while purchasing two-wheeler insurance. Consider the reputation of the bike-insurance provider as well. The insurer should have strong goodwill in the market and a proper mechanism in place to process claims in a hassle-free manner.

A bike engine capacity should not be a reason for a claim denial. However, a bike owner should be vigilant while purchasing the two-wheeler policy so that no such exclusion clause is included in the insurance contract. After all, your spirit and interests should dictate the choice of your bike, not some clauses in a contract.