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What is Third-Party Insurance For Bikes?

Third party bike insurance provides coverage to the policyholder for all third-party liabilities caused due to a road accident.

  • 22 Aug 2023
  • 3 min read

As individuals, we are all responsible for not causing harm to others or their property. But have you ever considered the potential risks and consequences of your actions? Accidents can happen, even when we are being careful on the roads. And in those situations, having a safety net becomes crucial. That is where third-party liability insurance comes in.

Third-party coverage in bike insurance is a fundamental policy that provides coverage for damages caused to anyone other than the rider or pillion rider of the insured bike. This coverage extends to property loss, bodily injury, or even death.

Usually, the premium for third-party bike insurance gets determined by the Insurance Regulatory and Development Authority of India (IRDAI), which considers the engine displacement size as the basis for calculating the insurance cost. This means that if you and your friend own 150cc bikes, the premium for both vehicles will be the same.

However, it is worth noting that third-party liability insurance has several drawbacks. It does not, for example, cover damage to an insured vehicle. Furthermore, if the rider or pillion rider on the insured bike sustained severe injuries, the medical bills should be borne by the victim or covered by their health insurance. As a result, the policyholder may incur financial losses and medical expenses. So, should we forego purchasing third-party insurance for our bikes? Read on to know the answer.

Is third-party insurance Mandatory for bikes?

According to the Motor Vehicles Act of 1988, all vehicle owners in India must have at least third-party liability insurance coverage. The government took this step to protect the general public from the financial burden of accidents caused by uninsured bikers. Now that you are aware of its significance, you should also familiarise yourself with situations when third-party coverage stands null and void. 

  • If you ride your bike in areas considered high-risk by your insurer and not covered by standard insurance policies, your policy is null and void.
  • You won't be able to obtain policy benefits if you make a fraudulent claim, such as providing false information about the accident or the extent of damages or injuries or claiming for damages or injuries that did not occur.
  • If you allow someone not authorised by your insurance policy to ride your bike, your third-party insurance will become void. 
  • If your insurer finds out that you were on your bike riding under the influence of alcohol or drugs at the time of an accident, your third-party insurance will become void.

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