Two-wheel vehicle insurance is without a doubt the best way to protect your bike against accidents and damage. Due to increased awareness and the recent implementation of new traffic laws, more people are seriously considering insuring their vehicles. Additionally, more people are gaining confidence by witnessing the ongoing claims settlement processes.
The importance 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 bicycle insurance policy and a comprehensive bicycle insurance policy.
In this guide, we describe the differences in simple terms.
What is third party bicycle insurance?
Third party bicycle insurance is a basic insurance policy that covers damage or injury caused by your bike to others, including property damage or bodily harm. It does not cover damage or personal injury to your own bicycle. This mandatory insurance protects you from financial liabilities arising from accidents involving third parties.
What is covered by third party bicycle insurance?
Third-party bicycle insurance covers the following:
- Third-party injury claims: Compensation for injury or death caused to another person in an accident involving your bicycle.
- Damage to someone else’s property: Covers damage to someone else’s property, such as vehicles, buildings or structures, caused by your bike.
- Legal responsibilities: Ensures coverage of legal expenses that may arise from lawsuits brought by third parties for damages.
What is not covered by third party bicycle insurance?
While third-party bicycle insurance is sufficient for legal compliance and primarily covers third-party damage, it does not include the following:
- Personal Injury: The insurance company denies coverage for injuries sustained by the insured in an accident.
- Bike damage: You cannot claim repair or replacement costs for your own bike.
- Theft or loss: Third-party insurance does not protect the vehicle owner against theft.
- Natural disasters: Damage due to floods, earthquakes or other natural disasters are excluded.
- Fire Damage: You are not covered for damage due to fire or explosion.
- Vandalism: Damage due to acts of vandalism is not covered.
In addition to these, accessory damages such as loss or damage to bicycle accessories are not included in these plans. The various problems that can arise due to mechanical or electrical failures are not covered.
Note: The insurance company reserves the right to deny coverage if you do not have a valid license at the time of the accident.
What is comprehensive bike insurance?
A comprehensive bicycle insurance The policy protects your bike against various risks such as accidental damage to the bike, theft or even natural calamities. It also involves third-party legal liability insurance for other people or property that you may damage.
This policy provides coverage for the bicycle and, to a large extent, any legal ramifications resulting from a bicycle accident.
What is covered by comprehensive bicycle insurance?
Comprehensive bicycle insurance typically covers the following:
- Own Accidental Damage: Covers repair or replacement costs if your bike is damaged in an accident.
- Theft: Offers compensation if your bike is stolen.
- Civil Liability: Covers legal liabilities if your bike is involved in property damage or injuries caused to someone.
- Fire Damage: Covers damage 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: Provides financial protection if the policyholder is injured or killed in an accident.
- Towing Assistance: Covers the costs of towing the bicycle after an accident.
Additionally, a comprehensive insurance policy allows you to opt for optional add-ons. This allows you to add extra layers of protection like roadside assistance, zero depreciation coverage, engine protection, etc.
What is not covered by comprehensive bike insurance?
Comprehensive bike insurance typically offers broad coverage but excludes certain scenarios. Here’s what isn’t usually covered:
- Depreciation: Insurance does not cover the reduction in the bike’s value over time.
- Wear: Damage resulting from normal wear and tear is excluded.
- Driving without a license: Accidents occurring while driving without a valid license are not covered.
- Driving under the influence of alcohol: Damage caused while driving under the influence of alcohol or drugs is excluded.
- Consequential Losses: Losses that occur as an indirect result of an incident, such as engine damage due to water leakage, are not covered.
- Mechanical or electrical failure: Failures or damages due to internal faults are not included.
- Illegal use: The policy does not cover damages if the bicycle is used for illegal activities or races.
Insurers build limits into comprehensive bike insurance to manage your risks effectively. Furthermore, it prevents misuse and offers coverage exclusively for unforeseen incidents. Adopting these regulations ensures accessibility and sustainability for both parties involved.
Difference Between Comprehensive and Third Party Bike Insurance
Here’s a quick breakdown to help you understand the difference between third-party insurance and comprehensive bike insurance:
Parameter |
Bicycle insurance for third parties |
Comprehensive bicycle insurance |
---|---|---|
Coverage Terms |
Covers damage to third party property and injury/death to third parties. |
Covers third party liabilities as well as own damage caused to your bicycle (accident, theft, fire, etc.). |
Insurance premium |
Lower premium as it offers limited coverage. |
Higher premium due to wider coverage. |
Protection against own damage |
Not included |
Covered (for accidental damage and natural or man-made disasters) |
Theft Coverage |
Not covered |
Addressed |
Add-ons |
Not available |
Available (engine protection, zero depreciation, roadside assistance, key loss coverage, etc.) |
Legal Requirement |
Mandatory as per law in India |
Optional, but often recommended for better coverage. |
Claim process |
Simple, as it only deals with third-party complaints. |
Slightly elaborate due to the multiple coatings. |
Insuring your bike is mandatory in India as per the Motor Vehicles Act, 1988. However, bike owners have complete freedom regarding the insurance policy they want to go ahead with.
Although third-party coverage plans do not cover personal liability after an accident, comprehensive bicycle insurance is much more useful. Therefore, you must think wisely before finalizing an insurance plan for your two-wheeler.