Importance of PUC Certificate for Bike Insurance Renewal

Can Bike Insurance Policy be Cancelled?

Yes, a bike insurance policy can be cancelled. Many policyholders assume that once a bike insurance policy is issued, it must remain active for the entire duration, usually one year. However, bike insurance companies do allow policy cancellations before the end of the policy term under specific conditions.

Notably, the cancellation process varies based on whether you have a third-party bike insurance policy or a comprehensive bike insurance plan.

Conditions for Cancelling a Two-wheeler Insurance Policy

Take a look at certain conditions that must be met for bike insurance policy cancellation:

• No Claims Should Be Made: If you have filed any two-wheeler insurance claim during the policy tenure, you may not be eligible for cancellation. Bike insurance companies usually require a clean, claim-free record before processing the cancellation request.
• Alternative Insurance Coverage is Mandatory: If you are cancelling an existing 2-wheeler policy, you must provide proof of a new insurance policy covering at least third-party liability. Since third-party bike insurance is mandatory by law, insurers require documented evidence before approving cancellation.
• Cancellation During Ownership Transfer: If you sell your bike, the existing bike insurance policy cannot be cancelled immediately unless the new owner provides proof of alternative insurance coverage.

When Can You Cancel the Bike Insurance Policy?

As a policyholder, you can cancel the policy at any time after the purchase. However, your insurer must be aware of the reason for cancelling it. In addition, you must adhere to the terms & conditions of the insurer regarding the cancellation.

Below are some of the most common reasons for bike insurance policy cancellation in India:

1. Reason 1: Selling the Bike

   If you are planning to sell your bike or scooter, it is your responsibility to cancel your active bike insurance policy. You can even transfer the policy to the new vehicle owner.

   Read More: Transferring Two-wheeler Ownership & Its Insurance

2. Reason 2: Theft of the Bike

   If your insured bike is stolen and you cannot find it, you must cancel the two-wheeler insurance policy of the stolen bike. In such a case, you have to submit the FIR, Non-traceable Report, and other relevant documents (which may vary from insurer to insurer) to your existing insurance provider. Remember, you can raise bike theft claims under your comprehensive bike insurance policy.

3. Reason 3: Unsatisfied with Existing Insurer's Services

   Another common reason to switch to a new company could be an unpleasant customer experience with your existing insurer or if you have found a more affordable plan. For cancelling the policy in such a situation, you have to share a copy of the new insurance plan (at least the mandatory third-party bike insurance) with your former insurer to confirm that you have basic coverage.

How to Cancel the Bike Insurance Policy?

Traditionally, policyholders used to cancel the two-wheeler insurance policy by writing an application to the insurance company stating the reason to cancel the policy. Along with it, supporting documents were required.

However, with the digitalisation of the insurance industry, the bike insurance cancellation process has become quite easy. The rules of cancelling might vary from insurer to insurer, but below is the common process followed by most of the motor insurance companies in India:

Step 1: Intimate the Insurer Company

Initiate the policy cancellation process by connecting with your existing insurer's customer assistance team. You can find the insurer's contact details by visiting their official website or through their mobile application.

Step 2: Email the Insurer

You insurer might ask you to send an email stating the reason for policy cancellation. However, some bike insurance companies have a dedicated webpage or an exclusive feature available in their mobile application to cancel the policy and initiate the refund process.

Step 3: Get the Certificate of Insurance (COI)

Once your bike insurance policy is cancelled, the insurer will send you a Certificate of Insurance (COI). It includes the details of the cancelled policy along with the accumulated No Claim Bonus (if any) until the date of cancellation. Make sure to issue this certificate to utilise the accumulated NCB (if any) while purchasing a new bike insurance policy.

Step 4: Receive the Refund Amount

Your bike insurance provider will refund the premium amount based on the time your policy was active and the terms and conditions of your insurer.

NOTE: If your reason for cancelling the policy is 'switching insurer', you have to buy at least a third-party liability policy. However, buying a comprehensive bike insurance policy is optional.

Refund for Your Bike Insurance Policy Cancellation

If you decide to cancel your bike insurance policy, the insurer will first verify your documents and review your reason for cancellation and will refund the amount based on the following scenarios:

• If you cancel the 2-wheeler insurance policy before its start date, you are likely to receive a full refund. However, a small fee may be deducted for administrative costs.
• If the policy is cancelled after it has started, the insurer will refund the amount on a pro-rata basis.

Documents Required to Cancel Your Bike Insurance Policy

Depending upon the reason for the two-wheeler insurance policy cancellation, you have to submit the following documents:

• Cancellation in case of Sale of the Bike: Sale Deed/Form 29
• Cancellation in case of Bike Theft: FIR copy, Non-traceable report, and other supporting documents
• Cancellation in case of Switching Insurer: Copy of the new two-wheeler insurance policy