Is 3rd Party Bike Insurance Enough at Renewal Time? Here’s What Experts Say

Third-party bike insurance is the minimum legal requirement for riding a two-wheeler on Indian roads. While it covers damages to others in an accident, it does not protect your own bike, injuries, or accessories. This limited coverage can leave you financially exposed, especially considering that in 2024 alone, over 75,000 two-wheeler riders lost their lives, accounting for 44% of total road fatalities in India. So, when it is time for your bike insurance renewal, it is worth asking, Is third-party cover enough?

5 Factors Influencing Your Decision of Bike Insurance Renewal

If you are wondering what the factors are that lead to the decision of which bike insurance will be more suitable, here is the list:

1.    Coverage Offered

A third-party plan covers third-party damages only, whereas a comprehensive plan compensates for both third-party damage and your personal loss. Now, if you have the financial backup to handle damages to your bike, you can opt just for a third-party plan.

2.    Biker’s Driving Behaviour

If you frequently use your bike for a daily commute, the risk of accidents can increase due to longer exposure to roads. Moreover, if your route has multiple accident-prone zones, it is preferable to buy a comprehensive plan.

3.    Affordability

A 3rd party bike insurance plan is more affordable, with insurance premiums starting at a very low cost. However, its range of coverage is up to third-party damages only. Whereas, a comprehensive plan, although a bit costly, will prove beneficial in case your bike gets damaged or you get hurt.

4.    Bike’s Age and IDV

As per IRDAI, the depreciation rate of your vehicle is generally up to 50% in 5 years. Your bike’s IDV or Insured Declared Value also decreases simultaneously. This means you will receive your insurance claim amount, depending on the rate of depreciation of your bike. Hence, if your bike is too old, a 3rd party plan may suffice.

5.    Customisable Options

When you are renewing your bike insurance, you must know that a comprehensive plan comes with customisable options and availability of add-on coverages. However, a 3rd party plan is fixed, both in terms of coverage and price. This makes it less flexible for bike owners.

What is Covered Under a Third-party Bike Insurance?

In case you are planning to get only a third-party insurance for your bike, this is what gets covered:

●      Third-Party Property Damage: If your vehicle damages any third-party property, such as a car, vehicle, or house in a collision, your insurer covers the losses up to the policy terms.

●      Injuries to Third Party: In case a third-party person suffers injuries due to an accident caused by your vehicle, your insurer will cover the treatment for that person. They also offer compensation in the event of their death.

●      Personal Damage to the Owner/Driver: You can include a Personal Accident Cover (PA) to your third-party bike insurance plan. This insures you against injuries, disability, and death up to a certain amount.

What is Not Covered Under a Third-Party Bike Insurance?

Here are some items that are not covered in a third-party plan, which you should know before going ahead with the bike insurance renewal:

●      Own Vehicle Damages: Damages to your vehicle in case of an accident or natural disasters are not covered in a third-party insurance plan.

●      Injuries to the Rider/Owner: It is not covered under third-party bike insurance because the policy only protects third-party persons or property, not the insured individual or their vehicle.

●      Accidents Caused While Not Obeying Traffic Rules: Getting into an accident while not having valid documents or when intoxicated is not your insurer’s responsibility, and your third-party claim can be rejected.

●      Use of Vehicle for Commercial Purposes: If you use your private vehicle for commercial purposes, then in the event of an accident, your insurer might reject your claim for any third-party damages.

●      Mechanical or Electrical Breakdown: It is not covered in bike insurance because they result from wear and tear or internal failures, not accidents or external events, which insurance policies are designed to cover.

Final Thoughts

Although buying a third-party plan for your bike insurance renewal fulfils the legal obligations as per the Motor Vehicle Act of 1988, having only a third-party plan can leave you financially vulnerable in case of damage to your own bike.

Moreover, personal factors such as your risk exposure, affordability, bike’s age, and choice for customisable options help you decide your bike insurance renewal plan. However, you must know that many flexible options like Zero-depreciation cover have a validity for bikes up to 5 years of age only.