No matter what type of bike you own, be it a commuter, cruiser, sport bike, scooter or an antique, the love for your bike will never stop you from maintaining it well or shielding it with a two-wheeler insurance policy. Whether you ride it to work or enjoy a long ride, it is not without its risks. In most cases, accidents that involve third-parties may involve huge financial liabilities, which can be devastating to your finances. Also, as per the Motor Vehicle Act, 1988 it is mandatory to protect your two-wheeler by insuring it with at least the Third-Party Two-Wheeler Insurance policy so that you are protected from financial burdens. Read on to know about Third-Party Bike Insurance and how to buy or renew 3rd-party two-wheeler insurance.
What is a Third-Party Bike Insurance Policy?
A Third-Party Bike Insurance Policy, also known as Third-Party Liability Cover, will protect you against financial liabilities arising out of damages sustained by the third party due to an accident involving your insured bike. This could include death or injury, bodily harm, and damage to the third party’s property or bike. If you want to take your two-wheeler out on the road, it is important that you insure your two-wheeler with Third-Party insurance coverage, which is now mandatory as per the Motor Vehicles Act. In simple terms, this protects you financially, especially in situations when the other party is not insured or does not have enough coverage.
So, in case of an unfortunate event, the Third-Party motor insurance will pay for any financial liabilities during such situations. You can save yourself a lot of money, stress and most of all it offers you peace of mind in case of an unfortunate accident.
Key Features of 3rd Party Bike Insurance:
Third-Party bike insurance is a liability type of vehicle insurance which covers only third-party liabilities arising due to accidental damage, death or injury to a third party. But most of all, the policy ensures you do not pay a fine while riding your vehicle on the road. Below are the key features of a 3rd party bike insurance:
No Financial Obligation:
The Third-Party two-wheeler insurance covers your financial liabilities for the damages caused to the third party, especially related to medical needs. This eliminates your financial liabilities towards the third party when it comes to taking care of their immediate medical care.
Third Party Property Damage Cover:
In case you accidentally damage the third party’s property or their vehicle, the Third-Party two-wheeler insurance policy covers up to Rs.1 lakh.
Personal Accident Cover:
You can opt for the Personal Accident Cover at an affordable premium with a sum assured amount of Rs.15 lakh.
Easy Online Process:
With new-age insurtech companies, you can perform almost all transactions online without stepping out to get the work done. It hardly takes any time to buy or renew Third-Party bike insurance with online insurance providers.
Key Features of Third-Party Bike Insurance by Acko:
Below are the key features of Acko’s Third-Party Bike Insurance:
|Key Features||Acko Bike Insurance Benefits|
|Bike Insurance Premium||Rs.482 onwards*|
|Personal Damages to Third-Party||Unlimited Liability Cover|
|Property Damages to Third-Party||Up to Rs.1 lakh|
|Personal Accident Cover||Up to Rs.15 lakh|
|Personal Accident Cover Premium||Rs.350|
|Buy/Renew/Claim Process||Online and Mobile App Enabled Process|
Benefits of Third-Party Two Wheeler Insurance:
There are several advantages in insuring your vehicle with Third-Party insurance. Here are some of the main benefits of Third-Party two-wheeler insurance:
Meets Legal Obligation:
Since Third-Party insurance is mandatory as per the Motor Vehicles Act, insuring your bike with a Third-Party insurance policy will ensure you are not breaking any law and meet the legal obligation. While the third party might be the beneficiary, you do not lose out, especially financially since the insurance company settles the claim.
Relief From Stress:
Unforeseen accidents can leave you traumatised, especially when the third party suffers financial loss and you may have to bear the costs. Third-Party vehicle insurance protects you from mental stress by paying the financial liabilities of the third party and relieves you from stress.
The Third-Party bike insurance premium is not relatively high compared to other types of motor insurance. It is economical and affordable for everyone. The IRDAI fixes the premium for the policy, hence there are very few chances of an unwanted price hike. Third-Party two-wheeler insurance policies are indeed cost-effective.
This type of vehicle insurance requires very less documentation and can be completed with fewer formalities. It needs fewer checks or inspections since it does not insure the vehicle. And, you can avail it as per your time and convenience.
Unlike other insurance policies, which still require traditional offline checks, renewals or applications, Third-Party bike insurance can be done online. You can buy/renew/raise claims online at any time of the day, hour and 365 days of the year, making this type of insurance highly accessible.
How Does Two-Wheeler 3rd Party Insurance Work?
The insured person is the first party, the insurance company is the second party, while the third party is the victim. In case of an unfortunate accident, and if the third party feels that you are responsible for the damages sustained by them, they may raise a claim against you. If your bike is insured with Third-Party insurance, the insurer will pay for the financial liabilities.
Long-Term Third-Party Cover for Five Years for New Bike Owners:
In a landmark ruling by the Hon’ble Supreme Court of India, to protect the third party, it has made it mandatory for new bike owners to insure their vehicle with Third-Party insurance for a minimum of five years. This came into effect from 1 September 2018. This eliminates renewing your bike every year with Third-Party two-wheeler insurance.
The main reason behind the resolution adopted by the Supreme Court of India was to ensure new bike owners buy at least a Third-Party cover. This also eliminates lapses in renewing the policy or not buying a bike insurance policy with enough coverage. With this new resolution, new bikes will have solid risk coverage as well as it financially protects the policyholder against financial liabilities arising out of injuries and accidental death caused by the insured vehicle.
What’s Covered in Third-Party Bike Insurance: Inclusions
Third-Party two-wheeler insurance provides several benefits to the insured vehicle and its owner. Here is what’s covered in 3rd Party Bike Insurance:
Injuries or Death of the Third Party:
In case of an unforeseen accident, if the third party is injured or dies due to a mishap with the insured bike, the 3rd party bike insurance can be utilised. Medical expenses arising out of the accident by the third party can be covered by this policy.
Damages To Third Party Property:
If your insured bike damages third party’s property, expenses arising out of the damages can be paid using this policy. As per the IRDAI, up to Rs.1 lakh can be used to cover the costs of the third party’s property damages.
Death of the Rider of the Insured Vehicle:
In case of accidental death of the rider/owner of the insured two-wheeler is covered under this policy. The coverage can be up to Rs.15 lakh. This option is available if you opt for Personal Accident cover.
Permanent/Total Disability of Rider of the Insured Vehicle:
In the case of permanent or total disability of the rider/owner of the insured vehicle, the insurance company will compensate accordingly under this policy if you have chosen to add Personal Accident Cover.
Also, read: Two Wheeler Insurance – Add On Covers
What Is Not Covered Under Third-Party Two-Wheeler Insurance: Exclusions:
It’s important for any insurance policyholder to know what is not covered under the 3rd party bike insurance. Below are the exclusions under Third-Party Two-Wheeler Insurance Policy:
Damages to the insured bike are not applicable in case of an unfortunate accident under this insurance coverage.
Driving Under The Influence of Alcohol:
If the rider or the owner of the insured bike is found riding under the influence of alcohol or intoxicating substances, this policy does not cover you in such situations.
Driving Without a Valid Driving Licence:
If the owner or the rider is found riding the two-wheeler without a valid driving licence, then Third-Party insurance does not cover you in such situations.
Driving Without a Valid Driving Licence Holder:
If the owner or the rider holds a Learner’s Licence and is riding the insured bike without a valid DL holder as a pillion, then claims will be rejected in such cases.
Third-Party Bike Insurance Premium Rates:
The cost of 3rd Party Bike Insurance is fixed by the IRDAI and not by the insurance provider. The apex body of insurance policies in the country revises Third-Party Bike Insurance premium rates every year. The basis of the rates is on the engine capacity of the vehicle. Below are the latest Third-Party two-wheeler insurance rates applicable from 16 June 2019:
|Engine Capacity||Third-Party Bike Insurance Rates|
|Up To 75cc||Rs.482|
|75cc To 150cc||Rs.752|
|150cc To 350cc||Rs.1193|
|350cc and Above||Rs.2323|
How Much Does a 3rd-Party Bike Insurance Cost?
A recent resolution by the Hon’ble Supreme Court of India made it compulsory to insure your bike with a 5-year insurance cover from 1 September 2018. Failure to insure your bike at the time of purchase will lead to heavy penalties as per the law.
The IRDAI, which is the regulatory body of insurance companies and policies in the country, fixes the Third-Party two-wheeler insurance rates based on the engine capacity of the bike. The third-party insurance price is based on what the IRDAI fixes on an annual basis. The most recent is 16 June 2019 and the rates are mentioned above.
How To Buy/Renew Third-Party Bike Insurance Policy:
You can buy Third-Party bike insurance online and the entire process is easy and fast. To buy a 3rd Party two-wheeler insurance online follow the below steps:
- Step 1: Visit the official website of Acko Two-wheeler Insurance.
- Step 2: Enter or select the two-wheeler from the options offered in the search box.
- Step 3: Select the year you bought the bike and click on ‘View Prices’ to view the 5-year Third-Party insurance policy for your vehicle offered by Acko.
- Step 4: Choose the plan, pay the required premium and receive the policy document instantly to your registered email address.
To renew Third-Party bike insurance, you can do so through the online method as well, which is faster and easier to process. Below are the steps:
- Step 1: Visit the official website of Acko Two-wheeler Insurance.
- Step 2: Enter or select the two-wheeler from the options prompted through the search box.
- Step 3: Enter the year you bought your vehicle.
- Step 4: Choose if your current policy has expired or not and click on ‘View Prices’.
- Step 5: You can view Third-Party plans and choose the most appropriate plan, pay the premium and receive the policy document instantly to your registered email address.
If you would like to renew the Third-Party bike insurance which you bought from Acko, then login with your mobile number and renew the policy accordingly.
Documents Required at the Time of Renewal:
While renewing your bike insurance policy, the online method is easier and faster as it requires fewer documents. At the time of renewal, below are the set of documents required for reference:
- Current or existing bike insurance policy details for reference.
- Details of the two-wheeler such as Registration Certificate, year of purchase, and the make and model of the vehicle.
Things To Remember For Bike Insurance Renewal:
Everybody who owns a two-wheeler should insure their vehicle as it is mandatory as per law. It is important to renew your bike as it offers complete financial protection against damages to your bike and avoid unforeseen situations such as accidents, financial liabilities of the third party. Below are some of the things to remember for bike insurance renewal:
Renew Before Expiry:
Renew your bike insurance ahead of the expiry of the current policy. When your policy lapses, you tend to lose all the benefits of an active insurance policy. Make a decision to renew it at least 45 days before its expiry.
Review Your Coverage:
While renewing your two-wheeler insurance, you have the opportunity to review the coverage. You can either opt for a higher or a lower coverage based on your requirement. However, ensure you do not compromise on the Insured Declared Value (IDV) of your vehicle.
Make Use of ‘No Claim Bonus’:
If you have not raised any claim during the previous year, you can make use of the ‘No Claim Bonus’ which acts as a discount on the renewal premium. Several insurers provide discounts for not raising any claim during the previous year. This will ensure a lower premium without affecting the IDV of the bike.
Understand Insured Declared Value:
The current market value of your two-wheeler is referred to as Insured Declared Value (IDV). In case of total loss or theft of the bike, the insurer will compensate you with the agreed IDV. Since the market value of the two-wheeler decreases due to the age of the vehicle, the Insured Declared Value decreases and so does the premium. However, it is your choice to set the IDV while renewing the policy. Ensure the IDV is appropriate and does not affect the value of the bike.
Look For Any Discrepancies:
The right time to correct any mistakes is during the time of renewal. In case your address or other personal details are incorrect, you can get it corrected while renewing your bike insurance policy.
Expired Bike Insurance Policy:
While it is advisable to avoid a situation where the policy has lapsed, in case you have missed the expiry date you have a grace period within which you can renew it. You can recover your policy by renewing it within the given grace period.
Opt For Valuable Add-Ons:
Opt for good or practical Add-ons which will add value to your policy. You may have to pay a nominal premium for the Add-ons but your vehicle is well covered with Add-ons such as Zero Depreciation, personal accident cover for the pillion, etc.
How To Claim 3rd Party Insurance For Bikes?
There are two scenarios, one, you are the third party and want to raise a claim, or you have met with an unfortunate accident and the third party wants to claim through your insurance. However, as a third party, below are the steps to claim 3rd Party insurance for bikes.
- Step 1: As a third party, file an FIR and inform the insurance providing company of the first party.
- Step 2: If there’s compensation that needs to be paid, the insurance company will pay on behalf of the insured person.
- Step 3: In case there are no violations of terms and conditions, then the insurance company will try and opt for a non-monetary settlement with the third party. If need be, the insurer will represent the second party or the insured person in the court to settle the claim.
Advantages and Disadvantages of Third-Party Liability Insurance:
A Third-Party bike insurance policy is compulsory under the Motor Vehicles Act. But how does it impact the insured person? Below are the advantages and disadvantages of Third-Party Liability Insurance that will throw some light on the mandatory insurance policy for two-wheelers:
Advantages of Third-Party Bike Insurance:
- Save Money: By ensuring your bike is protected with Third-Party liability insurance, you could potentially save money by not paying any penalties or fines as it’s a traffic violation as per the law.
- Comply With Law: A Third-Party insurance for the bike will ensure that you adhere to the law and ride your bike legally in the country.
- Protects You From Unforeseen Losses: In case of an unfortunate accident, the policy protects you from financial liabilities arising out of damages to the third party or their property.
- Protects You From Personal Damages: In case you are injured while riding your insured bike, the policy covers personal damages with Personal Accident (PA) cover.
- 24×7 Support: When you buy Third-Party two-wheeler insurance online, you get 24×7 support in case of claims, queries, etc.
- Peace of Mind: With a Third-Party Liability cover, you can rest assured that you are well protected in case of any third-party damages or injuries as the policy will cover your financial liabilities.
Disadvantages of Third-Party Bike Insurance:
- Natural Calamities Are Not Covered: In case of floods, fire and other natural calamities, the policy does not cover damages or losses arising out of such situations.
- Own Damages Not Covered: In case you accidentally damage your bike, the insurance policy does not cover such losses or damages.
- No Coverage Against Theft: In case your bike is stolen, then the Third-Party Insurance policy does cover against this type of loss.
- No NCB: Even if you do not raise any claim under the Third-Party insurance plan, you do not get benefits such as NCB which you enjoy in a Comprehensive Bike Insurance Policy.
Types of Bike Insurance Plans:
Bike insurance plans are broadly classified based on certain categories such as coverage and the type of two-wheeler for which the insurance is required. Below are the types of bike insurance plans:
- Third-Party Liability Insurance: Third-Party Liability Insurance is the most basic form of bike insurance. It offers protection against financial liabilities arising out of third-party injuries/death and damages to the property of the third party caused by an unfortunate accident. As per the Motor Vehicle Act, it is mandatory for two-wheelers to be insured with at least Third-Party Liability insurance.
- Comprehensive Insurance: This type of bike insurance offers protection to third-party coverage as well as Own Damage coverage. As the name suggests, it offers exhaustive coverage which includes damages sustained by the insured vehicle as well as that of the third-party involved in a mishap.
Also, read: Best Two Wheelers for Ladies and Working Women
Which Policy is Better? Comprehensive or Third-Party Bike Insurance?
While the Third-Party Liability insurance is compulsory as per the Motor Vehicle Act, the Comprehensive Bike Insurance policy offers an exhaustive category of coverage such as Own Damage and Third-Party Liability. The Third-Party bike insurance premium is much lower than that of the Comprehensive insurance due to the extent of the coverage.
Frequently Asked Questions About Third-Party Bike Insurance:
Below are some of the common questions about Third-Party Two-Wheeler insurance:
While the Third-Party Liability insurance is mandatory for the 15-year-old bike, Comprehensive or full insurance will cover Own Damages as well.
The premium for Third-Party insurance is decided by the IRDAI based on the engine capacity (cc) of the bike. Since the Hero iSmart Splendor is powered by a 113.2cc engine, the premium for bikes with engine capacity between 75cc and 150cc is approximately Rs.752 per annum. This rate is dynamic and the IRDAI regularly revisits the premium.
Since the main objective of the Third-Party Liability insurance policy is to cover the damages of the third-party, it will not cover ‘Own Damages’ of the insured bike. It is advisable to get the Comprehensive bike insurance to cover damages to the insured vehicle.
Yes, you can renew your Third-Party two-wheeler insurance online. There are several new-age insurance companies which offer several methods of renewing insurance such as mobile apps and websites.
No, you will not lose NCB under Third-Party motor insurance if you raise a claim during the period since NCB is not available on this type of insurance coverage.
Yes, you can buy only the Third-Party two-wheeler insurance. However, a Comprehensive Bike Insurance offers the benefit of both Third-Party Liability and Own Damage cover.
Since it is mandatory as per the law under the Motor Vehicle Act, you are liable to pay a fine while riding a bike without a valid Third-Party insurance policy.
The maximum compensation under Third-Party bike insurance depends on the extent of damages sustained by the third-party. While the Third-Party personal damage offers unlimited liability, the third-party property or vehicle damage is up to Rs.1 lakh.