What is the Difference Between Third-party and Comprehensive Bike Insurance?

Two-wheeler insurance is undoubtedly the best way to protect your bike from accidents and damages. Due to increased awareness and the recent implementation of new traffic laws, more people are seriously considering insuring their vehicles. Also, more people are gaining confidence by witnessing the seamless claim settlement processes. 

The significance of a two-wheeler insurance policy is now clear. To ride legally in India, you must purchase at least third-party bike insurance. However, many seem confused about the differences between a third-party and a comprehensive bike insurance policy. 

In this guide, we have chalked out the differences in simple terms. 

What is Third-party Bike Insurance?

Third-party bike insurance is a basic insurance policy that covers damages or injuries caused by your bike to a third party, including property damage or bodily harm. It does not cover your own bike’s damage or personal injury. This mandatory insurance protects you from financial liabilities arising from accidents involving others.

What is Covered in Third-party Bike Insurance?

Third-party bike insurance covers the following:

• Third-party injury claims: Compensation for injuries or death caused to another person in an accident involving your bike.
• Third-party property damage: Covers damage to someone else’s property, such as vehicles, buildings, or structures, caused by your bike.
• Legal liabilities: It ensures coverage for legal expenses that can arise from lawsuits filed by others for damages.

What is Not Covered in Third-party Bike Insurance?

Although third-party bike insurance is sufficient for legal compliance and primarily covers damages to others, it does not include the following:

• Personal injury: The insurer denies coverage for injuries sustained by the policyholder in an accident.
• Bike damage: You cannot claim for repair or replacement costs for your own bike.
• Theft or loss: Third-party insurance does not protect the vehicle owner from theft.
• Natural calamities: Damages due to floods, earthquakes, or other natural disasters are excluded.
• Fire damage: You get no coverage for damages due to fire or explosion.
• Vandalism: Damages due to acts of vandalism are not covered.

Apart from these, accessory damages such as loss or damage of bike accessories are not included in such plans. The various issues that can arise due to mechanical or electrical failure are not covered.

Note: The insurance company holds the right to deny coverage if you are found not holding a valid license at the time of an accident.

What is Comprehensive Bike Insurance?

A comprehensive bike insurance policy protects your bike against several risks like accidental damage to the bike, theft or even natural calamities. It also entails third-party legal liability insurance for other people or property that you may harm. 

This policy provides coverage for the bike and, to a great extent, for any legal ramifications resulting from a bike accident.

What is Covered in Comprehensive Bike Insurance?

Comprehensive bike insurance typically covers the following:

• Own accidental damage: Covers repairs or replacement costs if your bike is damaged in an accident.
• Theft: Provides compensation if your bike is stolen.
• Third-party liability: Covers legal liabilities if your bike is involved in damage to property or injury caused to someone.
• Fire damage: Covers damages due to fire incidents.
• Natural disasters: Protects against damage caused by natural calamities such as floods, earthquakes, or storms.
• Man-made disasters: Covers damage due to vandalism, riots, or terrorism.
• Personal accident: Offers financial protection if the policyholder is injured or dies in an accident.
• Towing Assistance: Covers expenses for towing the bike after an accident.

Plus, a comprehensive insurance policy enables you to opt for optional add-ons. These allow you to add extra protective layers like roadside assistance, zero depreciation cover, engine protection, etc.

What is Not Covered in Comprehensive Bike Insurance?

Comprehensive bike insurance typically offers extensive coverage but excludes certain scenarios. Here’s what is usually not covered:

• Depreciation: The insurance does not cover the reduction in the bike’s value over time.
• Wear and tear: Damages resulting from normal wear and tear are excluded.
• Riding without a licence: Accidents occurring while riding without a valid licence are not covered.
• Riding under influence: Damages caused while riding under the influence of alcohol or drugs are excluded.
• Consequential loss: Losses that occur as an indirect result of an incident, like engine damage due to water leakage, are not covered.
• Mechanical or electrical breakdown: Faults or damages due to internal breakdowns are not included.
• Illegal usage: The policy does not cover damages if the bike is used for illegal activities or races.

Insurance companies incorporate limits to comprehensive bike insurance to manage their risks effectively. Also, it deters misuse and provides coverage exclusively for unforeseen incidents. Adopting these regulations ensures affordability and sustainability for both parties involved.

Difference Between Third-party and Comprehensive Bike Insurance

Here’s a quick breakdown to help you understand the difference between third-party and comprehensive bike insurance:

Getting your bike insured is a must in India, according to the Motor Vehicles Act of 1988. However, the bike owners have complete freedom regarding which insurance policy they want to proceed with. 

While third-party coverage plans do not cover personal liabilities after an accident, comprehensive bike insurance is much more helpful. Thus, you should think wisely before finalising an insurance plan for your two-wheeler.