Insurance Guide for Modified Two-Wheelers

For many individuals, a motorcycle represents more than just transportation; it reflects identity, lifestyle, and passion. Consequently, modifications to bikes, ranging from cosmetic paint changes to performance enhancements, are often made by owners. While these customizations enhance the vehicle's appeal and value, they carry significant implications for insurance. SBI General Insurance provides insights on how customized or modified two-wheelers can be insured, the necessary processes, and the conditions policyholders should understand.

1. Financial Security:

   The insured value of the motorcycle is adjusted to account for approved modifications.

2. Comprehensive Protection: 

   Coverage is extended against theft, accidents, fire, and natural calamities.

3. Hassle-Free Claims: 

   If modifications are disclosed, the claim settlement reflects the motorcycle's true value.

Mandatory Insurance

As mandated by the Motor Vehicles Act, motor insurance is compulsory in India. Third-Party Liability Insurance covers only damages or injuries to third parties and does not protect the insured's customized motorcycle.

Comprehensive Insurance for Modified Vehicles

This plan includes own-damage coverage in addition to third-party liability. Declared modifications are included in the Insured Declared Value (IDV), ensuring that both factory-fitted components and aftermarket enhancements are protected. Additional cover options such as Zero Depreciation, Engine Protection, or Roadside Assistance can also be selected.

Valuation and Premium

Modifications significantly increase the IDV, as they add to the overall replacement cost of the motorcycle. Premiums may be adjusted based on the type of upgrade. Cosmetic changes, such as decals, might have a minor impact, while engine modifications could raise the risk factor and, thus, the premium.
For example, if a standard motorcycle is valued at ₹1,00,000 and modifications worth ₹20,000 are added, the insured value may be adjusted to ₹1,20,000.

Disclosure of modifications is critical; all changes must be declared at the time of policy issuance or renewal. Generally required documents include:

• Original invoice of the bike
• Bills or receipts of modifications
• RTO approval (for structural or performance changes)
• Recent photographs of the vehicle
• Settlement during a claim will be based on the IDV, including approved modifications. Non-disclosure can lead to claim rejection.

Eligibility: 

Any registered two-wheeler, including modified or customized motorcycles, can be insured.

Tenure: 

The standard policy duration is one year, with multi-year options available as per IRDAI guidelines.

Insurance will not cover:

• Modifications not approved by the Regional Transport Office (RTO).
• Illegal alterations, such as nitrous oxide kits or unauthorized engine tuning.
• Changes that compromise safety, like the removal of mirrors or alteration of brakes.
• Any undisclosed modifications at the time of policy issuance or renewal.

Customization adds uniqueness and value to a two-wheeler but also entails responsibility. A comprehensive two-wheeler insurance policy, supported by the transparent disclosure of modifications, ensures complete protection. SBI General Insurance encourages policyholders to retain all relevant documents, seek RTO approval when necessary, and choose add-on covers to safeguard both factory-fitted and aftermarket enhancements. By adhering to these guidelines, a modified bike can remain compliant with regulations and protected against financial risks.