Team AckoNov 12, 2021
Ever wondered what is all the buzz about bike insurance? This topic has been trending in the recent past because of the increase in penalties for riding a two-wheeler without an insurance policy.
One might ask, isn’t an insurance policy for the benefit of the bike owner? Then shouldn’t the choice to purchase the policy or not lie with the bike owner? Read ahead to know the answers to these questions and inform yourself about the mandatory bike insurance policy in India.
Third-party bike insurance is a mandatory policy that all bikers must posses while riding their two-wheelers on Indian roads. The Motor Vehicles Act makes it compulsory to do so. If you fail to comply with the law, you shall be liable to face penalties. One can also be jailed in severe cases.
This type of insurance doesn’t shield you from financial losses pertaining to damages incurred to your bike. A Third-party bike insurance or Act-only insurance or Third-party liability insurance focuses on insuring the policyholder against injury or damages done to any third party’s property due to the insured vehicle.
As the name suggests, a comprehensive bike insurance policy is comprehensive or wide-ranging in nature. It offers the Own Damage cover, which is not a part of the Third-party plan. Moreover, a comprehensive bike insurance policy includes the mandatory Third-party cover.
You also have the option to choose suitable Add-ons along with a Comprehensive plan. Note that it is not possible to do so with just a Third-party plan. However, if you choose to insure your bike with a Comprehensive plan, you will have to shell out more money for insurance premium as compared to a basic Third-party plan.
The exact process might differ depending upon whether you have a Comprehensive plan or just a Third-party Plan, and the specific details of the case in question. If you have a Comprehensive plan, then it is easier to raise a claim with your insurance company against Own Damage cover.
But if you have just a Third-party Liability cover, then you will have to depend upon the compensation offered by the damage-causing person’s Third-party insurance policy as you are the third party in such a scenario. This process is often complex and time-consuming.
Here’s an example – You only have a Third-party Liability cover for your bike. A car owner (with a Third-party cover) damages your bike while it was parked in a designated area. Now, you raise a Third-party bike insurance claim against that car owner’s policy by following the below-mentioned process.
Click photographs of the incurred damage.
Note down the details of the damaging vehicle.
If possible, check if someone witnessed the accident and note their contact details.
Inform your insurance company, they will be able to guide you regarding specific scenarios.
File a First Information Report (FIR) at a police station under whose jurisdiction the accident took place.
Register a case with the Motor Accident Claims Tribunal Court with the help of a lawyer.
Prove in court that the third party was guilty by furnishing required documents and details.
Receive applicable compensation from the damage-causing person’s insurance company.
Here’s a list of important points to consider in case of filing Third-party Two-wheeler Insurance claim.
Safety and medical attention are of prime importance.
Avoid getting into a monetary settlement without filing an FIR if you want to follow the legal process.
Collect as much evidence as you can to substantiate your claim.
Cooperate with different authorities at different stages.
Be patient, as such a claim settlement process can be time-consuming.
Ensure proper documentation throughout the process.
Two-wheeler third party insurance premium amount is stated by the apex body of insurance in India – Insurance Regulatory and Development Authority of India (IRDAI). These are standard rates and are followed by all insurance providers. They are free to charge a different premium for Comprehensive plans but have to follow IRDAI-declared rates when it comes to Third-party policies.
Usually, these rates vary on an annual basis. IRDAI declares Third-party two-wheeler insurance premium based on the vehicle’s engine capacity (cc). Here’s a list of two-wheeler insurance third-party rates for the year 2019.
|Two-wheeler Engine Capacity||Premium in INR|
|Not exceeding 75cc||482|
|Exceeding 75 cc but not exceeding 150 cc||752|
|Exceeding 150 cc but not exceeding 350 cc||1193|
|Exceeding 350 cc||2323|
If you want to stay unaffected from the price increase, you can opt for a long-term policy. This way, you will be charged for the price prevalent at the time of purchase and be shielded from the hike in price during subsequent years. Going for long-term Third-party bike insurance is mandatory for a new bike but you can also opt for it during policy renewal to save money on bike insurance premium.
A few years ago, insurance companies require lots of documents to process a bike insurance policy. However, that is not the case now. Digital insurers have made it possible to buy and renew bike insurance without much documentation and form-filling. You can renew your Third-party bike insurance online easily by filling up details related to you (name, address, etc.) and your bike (engine capacity, make and model, etc.)
If there has been a considerable gap between the expiration date of your Comprehensive bike insurance policy and your policy renewal application, the insurance company might feel the need to check or inspect your vehicle before insuring it. In such cases, you might require a positive Policy Inspection report to renew your policy.
Such inspection might also increase your insurance premium if the insurance company finds that your bike is in a bad shape. Thus, it is suggested that you renew your Comprehensive bike insurance policy before the expiry date to avoid any renewal hassles. And if you own a Third-party plan, then keeping it active while on the road is compulsory by law.
Also, read: Two-Wheeler 3rd Party Insurance
It is suggested to go through the policy document to check the exact nature of your bike insurance policy’s coverage including detailed terms and conditions. Here’s an overview of what’s covered and what’s not in a Third-party Liability Two-wheeler policy.
Third-party property damage
Own Damage cover
Additional covers (Add-ons)
Cases involving drunk/intoxicated driving, driving with an invalid license, etc.
What is the major benefit of purchasing a Third-party Liability Two-wheeler Policy?
The most important benefit of purchasing Third-party policy is that you become compliant with the law as it is a mandatory policy.
Can I have enough insurance coverage with a Third-party policy?
No, a third-party policy does not offer wide-ranging coverage. Consider purchasing a Comprehensive policy instead.
Is a Third-party policy a one-time purchase?
No, even if you purchase a long-term policy, you will have to renew it before its expiry date to avail continuous coverage.
Can I get a Third-party policy at a cheaper rate from a different insurance company for my bike?
No, all insurance companies offer a Third-party policy at the same rate (as per engine capacity) as stated by the IRDAI.
What happens if I ride my bike without a valid Third-party policy?
You can be penalized for riding a bike without an active insurance policy. Things can get problematic for you if your uninsured bike is involved in an accident; you can be jailed.
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