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.
What are the benefits of third party insurance for bikes?
While basic in nature, third-party bike insurance offers several key advantages:
- Legal compliance: Helps you avoid penalties and legal hassles by fulfilling mandatory insurance requirements.
- Financial protection: Covers the cost of damage caused to a third party-person or their property.
- Peace of mind: Accidents happen unexpectedly. This policy ensures that you’re not financially burdened due to someone else's damage or injury.
- Affordable premiums: Since it covers only third-party liabilities, the premium is much lower compared to a comprehensive two wheeler insurance policy.
What does third party insurance cover?
Third-party insurance for bikes covers the following:
- Bodily injuries or death of a third party: If your bike causes an accident that results in injury or death to another person, your insurer will cover the compensation payable.
- Property damage: If you accidentally damage someone else’s property, like a parked car, boundary wall or shop, the policy will cover the costs up to a certain limit.
- Legal expenses: Any legal costs arising from third-party claims are also covered under this policy.
What does third party insurance not cover?
While it is essential for legal compliance, third-party insurance has notable limitations. Here's what it does not cover:
- Own damage: Damages to your own bike, whether due to an accident, theft or natural calamities, are not covered.
- Personal accident cover: Unless purchased as an add-on, it does not include coverage for injuries or death of the bike owner/rider.
- Mechanical or electrical breakdowns: Issues like engine failure or wear and tear are not included.
- Driving without a licence: If an accident occurs while you’re riding without a valid licence or under the influence of alcohol, the claim will be denied.
For broader coverage that includes both third-party and own damage protection, opting for a comprehensive two wheeler insurance policy is a better choice.
Conclusion
Third-party two wheeler insurance is the most basic but essential form of protection every bike owner must have. It ensures legal compliance and offers financial protection against third-party liabilities, making your ride safer not just for you, but for everyone on the road. However, if you're looking for more robust protection, including coverage for theft, accidents and natural disasters, a comprehensive two wheeler insurance policy offers far greater peace of mind.
Evaluate your needs, riding habits and budget to choose the plan that offers the right balance of coverage and cost. And most importantly, never hit the road without valid insurance, because safety always comes first.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the topic featured in the article. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.