4 IRDA rules for two-wheeler insurance policies you must know

The Insurance Regulatory and Development Authority of India (IRDAI) is the chief regulatory body in the insurance sector. The aim of IRDAI is to protect the insured’s rights and ensure that the policyholder is not deprived of the insurance coverage and benefits in any way.

When it comes to motor insurance, the IRDAI has a couple of set rules and regulations. Before you purchase an insurance policy for your two wheeler, here are 4 rules that you must know of-

  1. Loss of/damage to the insured vehicle

As per IRDAI rules, the two wheeler insurance provider will indemnify the policyholder against any loss/damage to the insured vehicle in the event of the following-

  • A fire explosion/lightning/ self-ignition
  • Theft/burglary
  • A riot/strike
  • An earthquake
  • An extreme weather condition such as flood/hailstorm/cyclone/landslide
  • An accident
  • Any malicious/terrorist activity
  • While in transit by an external mode such as road, rail, air, or waterway


  1. The rate of depreciation

As per IRDAI regulations, the depreciation or deduction rate depends on the age and external parts of the vehicle such as the following-

  • Depreciation rate for two wheelers with fiberglass components, as mentioned by IRDAI is 30%
  • Depreciation rate for vehicles, the parts of which are made of nylon, rubber, plastic, tubes, tires and batteries is 50%
  • For all vehicle parts made of glass, zero depreciation rate is charged
  • For all other parts including wooden parts, the depreciation rate is determined following the schedule below-




Not more than 6 months


More than 6 months but less than 1 year


More than 1 year but less than 2 years


More than 2 years but less than 3 years


More than 3 years but less than 4 years


More than 4 years but less than 5 years


More than 5 years but less than 10 years


More than 10 years



  1. Third-party liability

As per the third party two wheeler insurance policy guidelines, the company will cover the insured against any legal liability in the event of an accident that leads to the death/bodily injury/permanent disability of the third party, and/or causes damage to the surrounding property.


Keeping in mind the rise in the number of accidents involving pedestrians, the Motor Vehicles Act has mandated third-party liability insurance policy in India.


  1. Personal accident cover for rider/owner

Personal accident cover offers coverage to the vehicle owner or rider against accidents that occur while travelling or riding a two wheeler. The compensation scale is given below –






Loss of one limb and sight of one eye/loss of two limbs/loss of both the eyesight


Loss of one limb OR Loss of sight of one eye


Permanent total disability arising out of injuries other than those mentioned above



As a two wheeler insurance policy buyer, you must be familiar with the above rules and guidelines as stated by the IRDAI. These are the general set of rules and regulations under IRDAI. To inquire more about the terms and conditions of two wheeler insurance policy, visit different insurers’ websites and read the policy documents carefully.


motor insurance , two wheeler insurance , third party two wheeler insurance policy

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