April 20, 2024

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Hypothecation In Bike Insurance: What You Need To Know

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Hypothecation In Bike Insurance
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Many can own their dream bikes with numerous financing options, making ownership achievable through EMI payments. Yet, bike financing often involves hypothecation, a crucial aspect to grasp.

What Is Insurance For Hypothecated Bikes?

When you finance a bike, it’s registered in your name at the RTO but with the lender’s name recorded, indicating hypothecation. Until the loan is repaid, the bike belongs to the lender, providing them security. Once paid, hypothecation is removed, giving you full ownership.

Adding Hypothecation To Your Motorbike Insurance Policy

Ensuring that hypothecation details are incorporated into your bike insurance policy is imperative, whether you’re buying a new or pre-owned bike. This information is crucial for policy bike insurance renewal. Providing a copy of the registration certificate to your insurer allows them to update the hypothecation in your bike insurance policy. The necessary documents for this process include the bike’s registration certificate, address verification, completed Form 34 for hypothecation, bike insurance policy, a self-attested PAN card copy, Pollution Under Control certificate, and a payment invoice supporting the hypothecation. To determine your bike insurance premium, factors such as the bike’s make, model, and riding history are considered by insurance providers. Claims are subject to terms and conditions set forth under the motor insurance policy. *

Removing Hypothecation Details From Your Bike Insurance Policy

Removing hypothecation from your bike insurance policy involves coordination between the financing company and the RTO.

Hypothecation Cancellation: This step occurs only after the loan is entirely repaid. Once you’ve fulfilled your financial obligations, the lending institution issues a No Objection Certificate (NOC).

  • Records Submission: Present the NOC, bike insurance policy, and a duly filled Form 35 to the RTO to eliminate hypothecation details from the registration certificate.
  • Documentation Submission: Submit the necessary documents to the RTO, and a small fee might be applicable.
  • Remittance: Pay the RTO the required fee to complete the process of removing hypothecation.

Checking Hypothecation Cancellation Status

Verification of the hypothecation cancellation status can be done through two methods. Firstly, visit the RTO to inquire about the progress. Alternatively, use the Parivahan portal online to check the status conveniently.

Why Insuring Your Bike Is Crucial

Regardless of financing, bike insurance is essential for several reasons:

  • Legal Requirement: The Motor Vehicle Act of 1988 mandates all bike owners to insure their vehicles, making it illegal to ride without insurance.
  • Comprehensive Coverage: Insurance protects against accidental damage, covering repair costs.
  • Theft Protection: In case of theft, comprehensive insurance compensates with the bike’s Insured Declared Value (IDV).
  • Natural Disaster Coverage: Damages from natural disasters are covered by insurance policies.
  • Personal Accident Coverage: Insurance covers injuries leading to disability or demise.

Always make sure that you compare bike insurance online before buying a policy

With the prevalence of bike financing, understanding and managing hypothecation in your bike insurance is crucial. Regular updates and eventual removal after loan repayment ensure a smooth ownership transition. Bike insurance, irrespective of financing, remains a legal requirement and offers comprehensive coverage, making it an essential aspect of responsible bike ownership.

*Standard T&C Apply

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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