In India, bikes are one of the most preferred modes of transport for the daily commute. It is easy to manoeuvre bikes around when in long traffic jams. Besides, bikes require less maintenance and are more fuel-efficient than four-wheelers. However, compared to cars, bikes are more prone to accidents. Hence, it is vital to purchase a bike insurance policy with high coverage amount to comply with the law and get financial protection against accidental risks.
Since the bike insurance provides a financial cover, they ensure that they pay the claim amount to the right person who is legally entitled to receive it. Therefore, the insurance companies conduct a thorough background check of the policyholders. If you are not sure, what is an insurance background check? Why and how insurance companies conduct the background check, read on to know more.
Why do insurance companies do background checks on the policyholders?
- To prevent identity theft
Many people steal a bike owner’s identity with malicious intentions like buying a bike insurance policy and raising a fake claim. The insurance companies contact the bike owner to verify the claim to prevent paying the claim to the wrong person. And, if there is no accident and the actual bike owner has not filed a claim, they reject the claim. Thus, background check helps prevent identity theft.
- To offer customised insurance services
Today, insurance companies offer customised bike insurance services and products to meet the specific insurance needs of a bike owner. However, to be able to provide this, the insurance companies need specific data related to the bike owner. Thus, a background check helps provide a better plan to the policyholder.
- Comply with the IRDA norms
The Insurance Regulatory and Development Authority had mandated all insurance companies to adhere to the KYC (Know Your Customer) and anti-money laundering regulations. Hence, the insurers conduct a thorough background check on all policyholders to comply with such guidelines.
What information do insurance companies verify during a background check?
Customer details
The insurance companies verify the policyholder’s basic personal information like name, residence address, occupation, age, etc., as per the relevant documents issued by the government authorities.
Vehicle details
Like personal details, the insurance companies also verify the two-wheeler details like registration date, engine cubic capacity, year of manufacturing, brand, model, etc
Policy details
Insurance companies ask for policy details like the type of plan you have purchased, claim history, the NCB, and other policy benefits accrued over the years (this will not apply to you if you buy a new policy).
Thus, the primary purpose of a two-wheeler background check is to prevent fraud on the customer’s part and ensure that the right person gets the compensation for the losses they suffer. As a policyholder, you need not worry about the background check; it is for your own benefit.
In fact, you must be happy that your insurance company is responsible and taking the initiative to protect you from insurance-related fraud.