Third-Party Insurance for Bikes
In India, most motorcycle owners choose third-party insurance to comply with motor vehicle regulations. While this type of coverage does provide a certain degree of financial protection if your vehicle is involved in an accident, is it the best insurance for your bike?
Beyond fulfilling legal requirements, bike insurance can provide significant financial protection and contribute to the longevity of your vehicle. In this article, we will help you decide which insurance is the best for your bike.
Understanding Third-Party Insurance
Third-party insurance covers any loss or damage a third party suffers because of your driving. The Motor Vehicle Act of 1988 makes third-party insurance compulsory for all 2-wheeler owners. Riding a bike without third-party insurance can result in financial and legal penalties. This emphasises the need to renew bike insurance before it expires.
Here are some important components included in third-party bike insurance:
- Any legal and financial obligations you have towards third parties
- Protection for any bodily harm suffered by a third party
- Damage to a third party’s property
The compensation depends on factors such as:
- Extent of the injuries
- Age of the third-party
- The income level of the third-party
Moreover, the compensation for property damages is capped at Rs. 7.5 lakh. Unfortunately, if a third party is injured or killed, the Motor Accident Claim Tribunal (MACT) is responsible for determining the compensation amount.
Other Types Of Bike Insurance Policies
Apart from third-party insurance, there are 2 other types of insurance you can buy:
1. Stand-Alone Own Damage Policy
This type of insurance plan covers any damage, loss, or theft suffered by your bike. You can buy this insurance only if you have third-party insurance. You can further increase the extent of the coverage by purchasing add-ons.
2. Comprehensive Policy
It combines the best of its own damage coverage and third-party insurance. Thus a comprehensive plan will secure you against damages suffered by your bike and those by a third party. If you buy this policy, you won’t need to buy any other policy separately. You can further increase the extent of the coverage by buying add-ons.
Add-ons For Comprehensive Bike Insurance
Here are some of the add-ons you can buy for bike insurance:
1. Personal Accident Cover
The Motor Vehicle Act of 1988 makes personal accident cover compulsory for all bike owners. As per IRDAI guidelines, it can provide coverage of up to Rs. 15 lakh.
2. Return to Invoice Cover
A typical insurance plan provides coverage based on the Insured Declared Value (IDV) of your bike. The IDV indicates the market value of your bike and it is lower than the cost at which you bought the bike. But if you opt for return-to-invoice cover, the insurer will provide coverage up to the invoice value of the bike.
3. Zero Depreciation Cover
Zero depreciation car ensures that the value lost due to depreciation of vehicle parts is not subtracted from your claim. This means you will receive the complete amount for repairs, which can lead to significant savings. The exact number of claims allowed under zero depreciation coverage may vary depending on the insurance provider.
4. Roadside Assistance Cover
Roadside assistance helps if your vehicle suffers a breakdown while you’re on the road.
In situations ranging from minor accidents to minor mechanical issues, having access to a professional mechanic can be invaluable. Round-the-clock roadside assistance service helps you navigate unexpected challenges with ease and convenience.
5. No-Claim Bonus Protection
Insurance companies provide a discount on renewal premiums if the insured person doesn’t make any claims during the policy period. This discount is called the no-claim bonus (NCB). However, the NCB is unavailable if you make a claim during the policy term.
To protect your NCB even if you file a claim during the policy period, you can opt for NCB protection.
Is Third-Party Coverage Enough For Bikes?
From a legal standpoint, it is enough to have third-party coverage for your bike. It fulfils your legal obligations under the Motor Vehicle Act of 1988.
But beyond the legal requirement, you should consider how much financial security you need. Third-party insurance will not cover damage suffered by you or your bike. For greater coverage, you can opt for an own-damage cover or a comprehensive plan. You can also choose add-ons which expand the depth of your coverage. To safeguard both yourself and your bike, it’s essential to have an insurance policy that provides all-around coverage.
Final Words
To conclude, although third-party insurance for your bike is legally required, it is likely to fall short of providing adequate protection. Therefore, it is strongly advisable to choose a comprehensive insurance policy.
Such a policy not only safeguards your bike against damages and theft but also covers third-party liabilities. By opting for comprehensive coverage, you can have peace of mind. You will know that you are shielded from high costs that may arise due to unfortunate events.
