Home Insurance A complete guide about Third-Party Bike Insurance

A complete guide about Third-Party Bike Insurance

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Did you accidentally hit someone else’s car parked outside? Have you ever injured anyone from your bike unintentionally? If this has ever happened to you, it is easy for you to understand the guilt you suffer with. But that is not all as you will also have to compensate the affected party. This is where the Third Party Bike Insurance policy helps.

According to the National Crime Records Bureau, a total of close to 48000 people were killed in hit and run cases in the year 2019. A total of 1.37 lakhs of people lost their lives due to negligent driving in the same year. To prevent the financial losses of several such loss bearers, the Government of India made Third-Party Bike Insurance mandatory.

Who is referred to as a Third-Party?

Under a bike insurance policy contract, there are two parties involved, one is the insurer and the second is the policyholder(insured). Anyone other than these two parties who are affected in an accident from your bike becomes a Third-Party.

The third-party could be a car, commercial vehicle, pillion rider on the bike, passenger inside the car, anyone walking on the road, or the owner of the property.

What is Third Party Bike Insurance?

A Third-Party Bike Insurance is the policy that protects the policyholder if there occurs damage to the property/person from the bike.

Let us see what is covered under Third Party Bike Insurance? 

  1. Death or bodily injury to the third party.

If an individual suffers from a bodily injury due to an accident caused by your bike, your insurance company will pay for the loss. Your insurance company will take care of their medical cost till they recover. And if the injured person expires or sustains physical deformities, the individual can also file a claim for loss of income.

  1. Third-Party Property Damage.

When you happen to damage any third-party’s property, the policy will cover the

losses up to RS 7.5 lakh. If the cost of the damage exceeds this upper limit then the balance amount has to be taken by the policy holder.

  1. Death of the owner of the bike.

Personal accident cover- this has been made mandatory by the Governament of India. If you do not have one then you must have this as a part of the third party policy that you are going to purchase. When in an accident, the

insured(owner-driver) of the bike dies/ suffers from permanent disability, the dependent survivor of the family will be financially comforted by the insurance company, as per this policy.

What does the compulsory cover of Third-Party Liability indicate?

The compulsory cover of Third-Party Liability cover indicates that you cannot adopt

reckless behavior while driving any vehicle on the road. You are responsible for your as well as others’ safety on the road.

In case, you happen to damage someone else’s property, you are liable to pay for all the repairs. Driving a bike without Third-Party Bike Insurance will attract heavy fines. As per the Motor Vehicle Act, the penalty of not having a Third Party Bike Insurance is Rs.2000/- and/or imprisonment of up to 3 months.

READ  Top 7 Significant Tips Necessary to Choose Auto Insurance Company

What is not covered under the Third-Party Bike Insurance Policy?

Here are a few things that will not be covered under the Bike Insurance Policy:

  1. Any damage that may happen to your bike in an accident.
  2. Any damage to the bike that happens beyond the geographical limits of the
  3. Any damage caused from your reckless drunk driving
  4. Damages caused in an accident caused by a person who does not have a valid licence.
  5. If the bike is being used for any other purpose (like racing, commercial purpose) as defined in the insurance policy or with the motor vehicle’s department.

How much premium will you pay for the Third-Party Bike Insurance?

The premium for the Third-Party Bike Insurance will depend on the engine capacity. The Insurance Regulatory and Development Authority sets the premium. Below is the list of engine capacity vs the premium charged:

Engine capacity Third party insurance premium (INR)
Up to 75 cc 482
Between 75-150 cc 752
Between 150-350 cc 1,193
Above 350 cc 2,323

Please keep in mind that no insurance company can charge you more than the pre-defined premium.

As per the recent update of the Motor Vehicle Act, a long term third party insurance policy is now mandatory. The minimum period of a long-term third party insurance policy is 5 years.

Should you buy Third-Party Bike Insurance or a Package Policy?

A Third-Party Bike Insurance policy is mandatory under the MV Act. There is no choice of skipping this cover. But buying a third-party standalone cover will be an economical option as compared to the comprehensive policy.

Let us look at the difference between the two:

Particulars Third-Party Bike Insurance Comprehensive Bike Insurance
Cost Lower premium Higher premium depending

 

    on the extent of cover.
Legal It is made mandatory by law. This is not a compulsory cover.
Documentation Third-Party Insurance policy saves you from documentation and facilities because it covers third parties and not your bike. You would need a lot of papers like the invoice of the bike, vehicle registration certificate, and other similar documents.
Coverage The scope is only for the third parties that are person or object. Cover expands to third parties as well as your bike.

Read more: Third-Party Vs Comprehensive Two Wheeler Insurance

Is it always good to buy a stand-alone third party bike insurance?

Leaving aside the fact that the third party bike insurance policy is a mandatory cover, let us think about whether it is always beneficial or not?

Here is why a stand-alone third party bike insurance policy may not be a great option:

  1. It does not provide you the extended comprehensive cover or the package
  2. It does not provide you the cost of damage to your
  3. You do not have the option to buy the additional covers.

What we just discussed is the question in every bike owners’ mind. The decision is also impacted by the recent update of the long term third party policy. For some policy buyers, it can be a big amount to consider. To have a hassle-free cover, you must decide the best possible coverage for your bike.

Read more: Car Insurance Policy – What to know about car insurance be-fore you shop?

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