Two-wheelers are quite famous in India. With two-wheelers, individuals can easily move through heavy traffic, carry out small distance trips, and use them for their work commutes. However, as two-wheelers are more exposed than cars, their probability of being involved in accidents is high. Therefore, it is important to get a suitable bike insurance cover for the vehicle.
Apart from the cover, getting the bike insurance renewal done on time for the policy is crucial. With a timely renewal of two-wheeler insurance, you can ensure your policy stays active. Most insurers like Tata AIG allow customers to renew the insurance for two-wheeler insurance online. They also offer features like bike insurance calculators to help customers estimate the premium amount.
Since a bike insurance policy claim offers financial cover, insurers need to ensure that the claim amount is offered to the correct individual. Therefore, insurers conduct background checks in bike insurance in India to ensure the coverage is offered to the correct individual.
Background Check in India for Two-Wheeler Insurance
Insurers in the country carry out a background check mainly to avoid fraud, and they wish to ensure bike owners do not engage in it. Here are certain ways individuals engage in fraud:
- Incorrect or incomplete details: Bike owners share incorrect details with the insurer. It can be about the past damages to the bike or claiming an amount higher than the actual cost of repair. If insurers do not cross-check these claims, the payout may be higher than the correct amount. Such actions are considered fraud and must be avoided at all costs.
- Fraud: A huge example of fraud is to report a fake bike stolen and claim the full value of the bike. A non-traceable report by the police is important for such cases. Moreover, it is a type of insurance fraud that can attract serious punishment like jail time.
- Fake customer profiles: Individuals create fake customer profiles and raise claims for non-existent injuries or damages. Therefore, checking the user for correct identities will become important for such cases.
These instances can lead to fraudulent claims, and insurers rely on background checks.
Reasons Why Insurers Conduct Background Checks on Customers
Given below are a few reasons why insurers run a background check on the bike owners or a third party in the event of claim intimation:
- To build better products: Insurance products offered by insurers can be adjusted as per the customer’s needs. However, insurers will need specific data from the bike owner to offer suitable products. When insurers have the data on their customers, they will access certain insights to help insurers build products as per the customer’s requirements. Custom products like these can lower the policy cost and offer better services to the customer.
- To check if a third-party claim is genuine: If a customer is involved in an accident with a third party, the third party can raise a claim against the bike owner’s bike insurance plan. As there is no prior KYC of the third party, the insurance company will need to do a background check on the third party to ensure they aren’t raising a fraudulent claim.
- Rule out identity theft: An individual may steal someone’s identity to get two-wheeler insurance coverage and raise a fake insurance claim. For such scenarios, the insurance company will contact the bike’s real owner for the claim process. This will be an issue as there wasn’t a real accident. Therefore, with the help of a background check, the insurer will be able to identify legitimate claims.
- To meet regulations: The Insurance Regulator and Development Authority of India (IRDAI) has made it compulsory for two-wheeler insurance companies to follow the KYC (Know Your Customer) and anti-money laundering regulations. Therefore, a clear background check is important as per these guidelines.
Background checks will help the insurer learn about important things regarding the insurance, claim, customer, etc. However, when an insurer decides to conduct a background check, they look for certain crucial things.
Things Insurers Check During Background Checks
Given below are some of the things that insurers check when they need information from a bike owner:
- Customer details: The insurer will look through the basic information about a customer. This will include the customer’s ID proof, name, address, residential proof, etc. Learning about these details will help the insurer verify certain crucial things.
- Insurance plan details: Bike insurance companies will look through your bike insurance policy information. They will consider different details like the policy type, history of claims, No Claim Bonus discount available, etc.
- Two-wheeler details: All the details about the bike, like its registration number, engine’s cubic capacity, manufacturing year, company, model and make, etc., are crucial for the background check. These details will help the insurer learn about the bike thoroughly.
Bike insurance policies offer you financial support if your bike is stolen or gets damaged. Bike insurance background checks ensure that the individual gets financial help for the damages. Insurers conduct these checks to ensure the claim is offered to the correct individual. The background check will ensure you get financial support for the losses you have faced.