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Here’s why comprehensive bike insurance is a better bet than third-party insurance

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Published on August 18, 2021. EST READ TIME: 3 minutes

If you wish to ride your bike on Indian roads, without inviting legal trouble, you must have third-party bike insurance. The idea is that if you cause an accident, then the other person should not have to pay for his/her vehicle’s repair because of your mistake. Similarly, if the roles were reversed, the other person’s third-party liability insurance would help pay for your damages. Furthermore, accidents happen without warning, so one may not have the required funds at the time of an accident to pay for the other individual’s damages.

But what about your own bike? Who will cover the damages done to your two-wheeler in case of an unforeseen event? This is where comprehensive bike insurance steps in. so, if you are wondering whether to switch from third-party to comprehensive insurance, understand how they are different first.

Scope of coverage

Third party bike insurance covers only the third person, i.e., the individual or his/her vehicle or property, against injuries or damages arising due to an accident.

Comprehensive insurance includes a third-party cover and an own damage cover as well, which pays for any damage caused to your own bike either due to an accident or natural or manmade disasters. It also covers against theft.

Add-ons

Third-party liability has no add-ons.

With comprehensive insurance, you unlock the option of multiple add-ons that further increase your coverage, giving you the option to add the engine and electrical systems under the purview of insurance. You can also pick from add-ons like zero depreciation cover and return to invoice cover, which pay you the entire amount of the replaced/repaired parts, and reimburses the amount you had paid for the motorcycle when you bought it, in case of an accident or theft, respectively.

Cost of insurance

Because third-party bike insurance covers a limited set of circumstances, its cost is significantly lower than comprehensive insurance.

The cost of comprehensive insurance may be higher than third-party liability, but it also provides extensive coverage, making it cost-effective in the long run. In case of an accident that damages your bike, the insurer takes care of the repair work, so that you need to pay only the depreciation cost and other minor expenses not covered by the policy. However, if you get the zero-depreciation cover, even depreciation costs will be taken care of by the insurer. With comprehensive insurance, you don’t have to worry about the costs after an accident since your insurance will take care of it mostly, providing you the peace of mind you need.

No Claims Bonus

Third-party has no provision for No Claims Bonus.

Comprehensive insurance provides a discount on the subsequent policy renewal for every consecutive claim-free year. This discount can range from 20% after the first claim-free year up to 50% after 5 claim-free years. This further reduces your insurance cost, while keeping you comprehensively covered.

Now you know why insurers almost always recommend comprehensive insurance. Here’s how you can make the switch from third-party bike insurance to a comprehensive plan:

1. Browse and compare plans. Find the policy that best fits your needs, after accounting for the coverage amount and benefits.
2. Select the policy and enter your bike details, such as registration number, model, year, etc.
3. Set the Insured Declared Value from the offered range. Be advised to not lower your IDV as it may result in huge out-of-pocket expenses later.
4. Select the add-ons you require. Here, too, select only those add-ons that you simply cannot do without. The more add-ons you select, the higher will be your premium.
5. Purchase accident cover, if you do not have one already.
6. Complete the payment and await policy confirmation on your e-mail ID.

While third-party bike insurance does save you upfront costs and legal hassle, a   comprehensive bike insurance is the safer and more financially prudent choice in the long run. Even if you end up paying a higher premium, in case of an unfortunate event, you will be well-covered.

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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