A major chunk of Indians relies on two-wheelers for their daily commute. Whether it is a scooter or a bike, these are much more economical and time-saving modes and hence, always in demand. However, these are also more prone to accidents and hence, it is vital that you get your bike insured before you take it out on the roads. If you also own or planning to own a bike, it is important that you take two-wheeler insurance. Two-wheeler insurance not just offers financial security in case of theft or accident but is also mandatory by law as per Indian Motors Act.
Understanding Bike Insurance
Two-wheelers are the primary mode of travel for most people in India. Besides being cost-effective and easy to maneuver during traffic times, it is also less expensive and faster than other modes. But since these are also more prone to be involved in road accidents, it is important that you secure them with the right bike insurance. Adding to that, bike or two-wheeler insurance is mandatory for all two-wheelers and covers financial losses in case of theft or accident. As per the Motor Vehicle Act, 1988, all bike and scooter owners must have third-party bike insurance which is the minimum legal requirement. There are two major types of insurance available for bikes – third-party bike insurance and comprehensive bike insurance.
What is Third-party Bike Insurance?
Third-party bike insurance, as the name suggests, is insurance that provides the minimum cover against damages and losses related to a third party. For instance, if you get into an accident with another vehicle, third-party bike insurance will provide coverage against damages and losses incurred by the third party. However, it would not cover damages caused to your own vehicle. This is the bare minimum coverage for two-wheelers that you need to get as per Motor Law.
Advantages of Third-party Bike Insurance
- This insurance covers you against losses incurred by a third party.
- The insurance covers you as per law and protects you from hefty fines.
Limitations of Third-party Bike Insurance
- This policy does not cover damages to your own bike from accident, fire or natural calamity.
- The policy does not compensate you in case of theft of the bike.
- Third-party bike insurance cannot be customised with added covers or add-ons.
What is Comprehensive Bike Insurance?
Comprehensive bike insurance provides extensive coverage to bikes in case of an accident. Along with coverage for third-party liabilities, comprehensive bike insurance covers damages to your own vehicle against unwanted situations like accidents, natural calamities or collisions. Justifying its name, it provides wholesome coverage to you and your bike.
For instance, you are speeding on a road and lose balance and meet with an accident that leads to damage to your bike. In such a case, on filing your claim, your comprehensive bike insurance will cover you for the financial losses incurred by you on the bike repair.
Besides a comprehensive cover, you can avail of additional benefits with a combination of available add-ons to give your bike better coverage. Add-ons like Roadside Assistance Cover and Breakdown Assistance cover offer many additional benefits when required.
Advantages of Comprehensive Bike Insurance
- It covers third-party damages
- It covers the repair costs of damages to your own bike.
- Comprehensive bike insurance offers financial assistance for personal damages caused by an accident.
- Comprehensive two-wheeler insurance allows you to customise the plan with added riders and benefits.
- It provides coverage against theft or losses due to fire and natural calamities.
Limitations of Comprehensive Bike Insurance
- This insurance does not cover the regular wear and tear of the bike.
- The policy does not cover against depreciation of your bike.
- Comprehensive insurance for two-wheelers is more expensive than third-party insurance.
- Unless a specific cover is added, comprehensive insurance does not cover rubber and fiber parts of the bike.
Which Policy is Better: Comprehensive or Third-party?
There is a plethora of two-wheeler insurance options available in the market to choose from. With a myriad of insurance providers, riders and kinds of insurance coverage available in the market, most people are generally more confused about the coverage they should opt for. Why take comprehensive insurance when third-party insurance is enough? Well, to put it simply, the decision to procure a third party or a comprehensive insurance policy must be based on the coverage you require for your bike.
For instance, if your bike is rarely used or you are planning to sell it off soon, third-party coverage is ideal. Since the bike is rarely exposed to roads, basic coverage that fulfils the legal requirement is sufficient. It will also protect you from legal and financial expenses in case of damages caused to a third party in an accident.
On the contrary, if you have a new bike or you use it on a regular basis, getting comprehensive two-wheeler insurance is ideal. Considering the bike is exposed to traffic, it is more prone to damages and accidents and in such a case, merely third-party coverage would not suffice. Getting comprehensive coverage also allows you to avail additional riders and add-ons to give an all-around coverage to you and your vehicle.
If you own a bike or a two-wheeler, comprehensive bike insurance is your best bet since it will give you 360° coverage against losses, damages, theft and natural disasters along with coverage for damages caused to a third party. However, if you have a financial constraint or the bike is rarely used, you can opt for third-party coverage to fulfill the bare minimum legal criteria and safeguard yourself against damages caused to others by your bike. When purchasing comprehensive bike insurance or a third-party bike insurance policy always remember to evaluate the amount and type of coverage you need. This will help you pay a reasonable premium and give the right amount of coverage to your bike without giving you a financial setback.
Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.