Own Damage v/s Third Party Cover Under Bike Insurance

Posted on: Oct 10, 2022 | | Written by:

Own Damage v/s Third Party Cover Under Bike Insurance

Published on September 29, 2022. EST READ TIME: 3 minutes

Taking precautions for your bike rides is essential. Every time you step out for a bike ride, ensure that you wear adequate protective gear. Given the number of vehicles on the road, a small mistake by someone else can result in an accident. Apart from wearing safety gear, you must also have valid third party bike insurance.

Having third party bike insurance is also mandatory as per the Motor Vehicles Act. Riding without the policy can land you in a lot of trouble, as it has legal implications. Also, you will end up paying a hefty fine. However, just having third party bike insurance might not be enough to protect you against all circumstances. This is where own-damage bike insurance comes into the picture.

Here is everything that you need to know about own-damage and third-party bike insurance to help you decide, which is a better policy for your needs.

What is Own-Damage Bike Insurance?

Own-damage bike insurance is a type of bike insurance policy that offers cover for only your bike. If during an incident, your bike receives damages, you can repair the bike with the help of own-damage insurance and not worry about paying from your pockets. For example, if your bike receives damages due to a natural calamity such as an earthquake, typhoon, cyclone, etc., or is damaged during a riot, due to vandalism, theft, etc. you can claim the policy. It offers financial protection and compensates for the damages, thereby, helping you save money.

Benefits of Own-Damage Bike Insurance

The policy protects your bike and provides financial assistance if your bike meets with any unforeseen incidents. In the year 2019, the Insurance Regulatory and Development Authority of India (IRDAI) permitted bike owners to buy the policy from different insurance companies, as per their specifications.

As per IRDAI, new bike owners no longer have to buy long-term policies for their bikes. They can now opt for standalone own-damage policies instead. The own-damage policy usually has a term of 1 year and must be renewed annually. Another benefit of an own-damage policy is that you can opt for add-ons to make the policy more robust.

What is Third-Party Bike Insurance?

A third-party bike insurance policy is one of the simplest policies to protect yourself against any third-party liabilities. The policy usually is beneficial if you have met with an accident that involves a third party vehicle, individual, or property. You are liable to pay for any damages or injuries to them.

Third-party bike insurance offers you financial coverage against any such damages or injuries. It is essential since the damages or injuries can be a huge financial responsibility on your shoulders.

Benefits of Third-Party Bike Insurance

Third-party bike insurance is mandatory as per the Motor Vehicle Act. The policy offers you financial protection against loss or damages that your bike might have caused to another vehicle, person, or property during an accident.

If you meet with an accident that causes some injuries, the third-party policy of the other individual can come in to compensate for your medical expenses. The plan usually compensates up to Rs. 7.5 lakhs in the case of damages to third parties.

Difference Between Own-Damage and Third-Party Bike Insurance

Here are all the major differences between the own-damage policy and third-party policy.

Differentiating Factor	Third Party Policy	Own Damage Policy
Cover	The plan offers only third party liability cover	The plan offers damages related to your bike only
Personal Accident Cover	You get a personal accident cover of Rs. 15 Lakhs	You do not get any personal accident cover
Add-ons	You cannot add any add-ons to the policy	You can use add-ons to enhance the policy coverage
Depreciation	Depreciation does not have any impact on this policy type	The policy premium is impacted by depreciation for this policy type
Policy Premium	It is the most affordable bike insurance that you can opt for	Its premium is higher than third party liability policy

Key Factors To Consider Before Buying Bike Insurance

Here are some of the major factors that you must consider before buying a bike insurance policy.

Claim Settlement Ratio

The claim settlement ratio shows the total number of claims that an insurance company has settled versus the total number of claims that they have received. A higher claim settlement ratio indicates that an insurance company settles most of the claims. Thus, it can be a good indicator to decide on an insurance company.

IDV

The Insured Declared Value of your bike is its current market of your bike, as assessed by the insurance provider. In other words, it is the maximum amount that an insurance provider will compensate you if your bike is stolen or is a total loss.

If you opt for a higher IDV, you will receive better compensation if your bike is declared as a total loss or stolen. However, a lower IDV will fetch you a lower policy premium. Thus, it is important that you check the IDV of your bike and not just look for a lower premium. As it may have adverse effects in the worst-case scenario.

Process of Buying and Claiming

The ease of buying and claiming a bike insurance policy should be one of your deciding factors. You can look online for reviews and ease of buying or claiming a policy. You must consider an insurer that has a stress-free and smooth process of buying and claiming the policy.

Customer Support

Because incidents can happen at any time of the day, it is advisable to a buy policy from an insurer that can provide customer support 24/7. This will ensure that you can reach out to your insurance provider for any issues without having to worry about the timing.

Complimentary Benefits

While deciding to buy a policy, you can look for insurance providers that offer an edge over the others. This can be in the form of a unique service or an add-on that is free of cost. These will help you extract the most out of your bike insurance policy.

Conclusion

Whether you are buying a bike insurance policy for your new bike or renewing it for your existing bike, it is essential to opt for a policy with adequate coverage. The needs and requirements of each of us differ from others. Thus, merely buying the same policy as your friend or relative might not be the best solution.

The above information will help you decide between third party bike insurance and an own-damage bike insurance policy. Both the policies have their pros and cons. And based on the above information, you can decide which policy makes more sense for your usage and needs. A third party bike insurance with minimal coverage might not offer you enough coverage.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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