The Two-Wheeler Insurance KYC Norms: Everything You Need to Know
Buying insurance for a bike is necessary when you purchase a two-wheeler. However, there have been several instances of insurance-related fraud and malpractices. To curb this, the Insurance Regulatory and Development Authority of India (IRDAI) has launched specific guidelines for bike insurance.
January 1st, 2023, onwards, all two wheeler insurance providers will have to follow customer identification procedures when issuing fresh and renewing an existing insurance policy for bikes. So, the next time you visit your insurer’s website for insurance renewal or fresh policy purchase, you will probably have to complete the KYC process.
Here we should mention another important step that you must consider — use the online bike insurance calculator to calculate the premium for a bike’s insurance policy. It can save you some money on insurance premiums.
What Is KYC in Two-wheeler Insurance?
The Know Your Customer (KYC) process helps the insurance company know about the credibility and worthiness of the policyholder. The process is beneficial during claim settlement and ensures transparency in transactions.
Any insurance provider in India can only offer a customer bike insurance online or offline if they comply with the KYC norms. Here are the KYC norms an insurance company needs to follow to offer bike insurance to individuals and juridical people:
KYC Norms for Individuals
- An insurance provider must get the customer’s personal details for identity confirmation. It applies to both new and existing customers.
- The customer must provide his identity proof, address proof, and a recent passport-sized photograph to the insurance provider.
- If the customer’s current address differs from the address mentioned on his Aadhar card, he must submit a self-declaration.
- Suppose a customer cannot complete the Aadhar-based verification for a genuine reason like illness or injury. In this case, he has to submit all the required documents at the start of an account-based relationship.
- The KYC process is mandatory for existing customers, also. However, for low-risk customers, the re-KYC process can be done in 2 years, and 1 year for high-risk customers.
KYC Norms for Juridical People
The insurance provider can confirm the legal status of a juridical person in the following ways:
- The juridical person’s registered office address.
- His name, legal form, and proof of existence.
- His power of regulatory authority.
- An authorised person acting on behalf of the juridical individual.
- Identity of the beneficial owner of the juridical individual.
Methods of KYC for Offline and Online Insurance for Two-wheelers
An insurance company can use several methods to carry out the KYC process for customers. Let’s understand these methods briefly:
- Aadhar-based KYC: It is a hassle-free process of linking the customer’s Aadhar number with his bike insurance policy. Customers can do this process offline or online.
- Video-based KYC: Under this process, the customer provides identity proof to the insurance provider and a live video of themselves. The insurance company matches the customer’s identity in the video with the identity proof presented.
- CKYC: The insurance company can verify the customer’s identity through a unique Central Know Your Customer (CKYC) number.
- Physical KYC: It is the traditional method of verification where the customer visits the nearest branch office of the insurance company to furnish the documents and identity proof.
- OTP-based KYC: Another convenient method of performing the KYC process is the OTP (One Time Password) method. The customer provides a mobile number, and the insurance provider verifies it by sending an OTP on the number to complete the KYC process.
Documents Required for KYC Verification
The list of documents an individual needs to submit for the KYC process is as follows:
- Aadhaar Card
- Driving Licence
- Voter ID card
- Ration card with the individual’s photograph
- ECHS (Ex-servicemen contributory health scheme) or CGHS (Central Government Health Scheme) card
The list of documents an individual needs to submit in rural areas for the KYC process is as follows:
- Gram Panchayat Residential Certificate issued by the village panchayat head.
- Income tax PAN card
- Caste and domicile certificate with photo issued by the state government
- Certificate or proof of address having photo attested by MP/MLA or Group- A Gazetted office on the letterhead
- Kisaan passbook with attached photo
- MGNREGA card
- Bike registration certificate
- Telephone bill/ mobile postpaid bill for the last three months
What Happens If a Customer Fails to Comply with the KYC Process
If a customer cannot comply with the KYC process, the insurance company may decline his insurance application or delay the renewal of his existing policy. Moreover, an insurance claim made by a customer may get rejected if he still needs to complete his KYC formalities. Therefore, it is advisable to comply with the KYC norms when taking bike insurance.
Completing the KYC process when taking a two-wheeler insurance policy is mandatory per the IRDAI guidelines. A two-wheeler insurance policy from a reputed company like Tata AIG ensures you face no hassles when filing an insurance claim.