It is common knowledge that you need to have a motor insurance policy to legally drive a vehicle in India. Be it a car or a bike, insurance is mandatory for all such vehicles. The Motor Vehicles Act of 1988 lays down the requirement to have an insurance policy alongside the registration certificate of your vehicle and its PUC as some of the compliance requirements.
Selecting the right policy for your bike is essential based on your estimation of the risks when owning one. Since the new traffic regulations have been introduced with hefty fines, not having an insurance policy can burn a hole in your wallet. For you to make a simpler choice, this article elaborates on the types of bike insurance policies along with the difference between them.
A bike insurance policy is essentially categorized in two types – third-party and comprehensive plans. Third-party plans are also known as liability-only plans wherein the coverage offered by such policy is limited to third-party liabilities. For instance, an accident that has damaged the bike of a third person can result in liability on you. Here, your insurance policy kicks in to cover the cost of these damages subject to terms and conditions. However, the limited scope of a third party bike insurance policy has paved the way for comprehensive plans.
Comprehensive plans offer two types of coverages – own damage cover and third-party coverage. With a comprehensive policy, not only the third-party liabilities are taken care of, but also any damages to your bike are included in the scope of the insurance policy. Thus, a comprehensive policy includes natural calamities, theft, and other man-made perils in its coverage. Further, comprehensive policies rank over third-party cover since they offer customization in form of additional riders. With such customization available under comprehensive insurance covers, these policies can be fine-tuned to fit the needs of different types of users.
How does a comprehensive plan differ from the third-party cover?
Here are some of the different ways how these two policies differ from each other
Coverage: The base difference between comprehensive policies and third-party policy is the coverage offered. Since the liability-only policy covers limited events bearing third-party losses, the scope of its coverage is limited. On the contrary, comprehensive plans have a broader scope to include own damage and third-party coverage.
Add-on facility: Add-ons are additional features that can be opted for when you buy bike insurance. A comprehensive policy can be loaded with many different add-ons to customize it according to your risk estimate. These include various add-ons like zero depreciation cover, 24X7 roadside assistance cover, return to invoice cover and more. The same is not available in the case of a third-party policy. However, the only additional coverage that can be opted in a third-party policy is the personal accident cover.
Premium: Lastly, the premium significantly differs for both these policies. Since a third-party cover is a minimum requirement, its prices are regulated by the IRDAI, whereas the own-damage component of a comprehensive policy is determined by each insurance company. To manage the premiums in a comprehensive plan, the two wheeler insurance premium calculator is an effective tool. With this tool unnecessary add-ons can be dropped, and policies can be compared too.
This is how both policies differ amongst themselves in terms of features and its price. Make a thorough decision based on the assessment of your requirement of the type of two-wheeler insurance cover. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.