Third Party vs. Comprehensive: Which Insurance Plan Should You Buy for Your Bike?

Posted on: Aug 17, 2022 | 3 Min | Written by: HDFC ERGO Team

Third Party vs. Comprehensive: Which Insurance Plan Should You Buy for Your Bike?

Third Party Vs. Comprehensive Bike Insurance

In India, every two-wheeler needs to be insured as per the Motor Vehicles Act of 1988. Two-wheeler insurance policies offer protection against liabilities arising from third-party damages/losses and also own damages suffered by the insured vehicle due to several perils, like accidents, fire, theft and natural/man-made disasters.

In this blog, we highlight the difference between comprehensive and third party two wheeler insurance, enabling you to make a well-informed choice when buying insurance for your vehicle.

What is a Two Wheeler Insurance?

Two wheeler insurance is an agreement between the policyholder and the insurer, where the latter offers financial protection in the event the insured vehicle or a third party suffers any damage or loss due to an unforeseen event. The two main types of bike insurance policies available in India are:

1. Comprehensive bike insurance

2. Third party bike insurance

What is Third-Party Two Wheeler Insurance?

This policy protects the insured from liabilities coming from damage, loss or injury to a third party. Here, a third party could be a third-party property or an individual who has suffered damage/loss due to the insured person’s motorbike. According to the Motor Vehicles Act 1988, everyone must have a Third Party Two Wheeler Insurance.

1. Features and Benefits

◦ Premium starts at Rs. 538*.

◦ Hassle-free buying and renewal process.

◦ Helps adhere to the minimum legal requirement.

◦ Secures against third-party liabilities.

2. Inclusions

◦ Third party property damage.

◦ Third party bodily injury or death.

3. Exclusions

◦ Contractual Liabilities.

◦ Irresponsible rider behaviour.

◦ Depreciation.

◦ War and Nuclear Risks.

◦ Additional*. (Exclusions as per policy).

What is Comprehensive Two Wheeler Insurance?

The comprehensive bike insurance plan covers your vehicle in all forms- from rough terrains to busy streets. This policy secures the insured vehicle against damages or losses due to theft, accidents, fire, natural calamities and other perils. This is the key difference between comprehensive and third party bike insurance. Additionally, this policy offers coverage against liabilities arising from third- party damages and losses.

1. Features and Benefits

◦ Third-party liability cover.

◦ Extensive own damage cover.

◦ Options to customise IDV.

◦ Freedom to include add-ons.

2. Inclusions

◦ Accidents.

◦ Theft.

◦ Fire & explosion.

◦ Natural & Man-made calamities.

◦ Personal Accident Cover.

◦ Third Party Liability.

3. Exclusions

◦ Electrical and Mechanical Breakdown.

◦ Depreciation.

◦ Illegal Driving.

◦ Contributory Negligence.

◦ Consequential Damages.

Comprehensive vs. Third Party Bike Insurance

Here is a detailed difference between comprehensive and third party two wheeler insurance, so that you can get a clearer idea:

Category	Comprehensive Bike Insurance	Third Party Bike Insurance
Overall coverage	Ensures 360-degree protection by offering both Own Damage (OD) Cover and Third-Party Liability Cover.	Only offers coverage against third-party liabilities.
Perils covered	Accidents, thefts, fire & explosions, natural calamities, man-made disasters and third-party damages/losses.	Accidental third-party damages/losses.
Legal requirement	Optional but highly recommended by experts.	Third-party bike insurance is mandatory as per the Motor Vehicles Act 1988.
Premium	Higher premiums but better value for money.	Lower premiums (determined by IRDAI based on the bike's engine (CC) or battery capacity (kW).
No claim bonus	You can earn no claim bonus (NCB) of up to 50% for claim- free years.	No OD cover, hence no NCB available.
Additional benefits	Gives access to hassle-free repairs via cashless garages and the ability to adjust vehicle IDV during policy purchase.	No benefit of cashless repairs or IDV customisation.
Add-ons	Option to enhance coverage with add-ons like engine protection, zero depreciation, no claim bonus protection, and return to invoice.	No option to include add-ons to third party only bike insurance.

Which Two Wheeler Insurance Should You Buy?

Now that you have an idea of two wheeler insurance comprehensive vs third party policies, you need to take your pick. You may find the following policies right for your vehicle if you fit the profile:

1. Buy Comprehensive Bike Insurance If:

◦ You own a new or luxury bike which has a high cost for repairs and part replacements.

◦ You ride your bike frequently or live in a city with a high risk of accidents, thefts or natural calamities.

◦ You want complete coverage against unwanted expenses.

◦ You want the benefits of NCB discounts, cashless repairs and IDV customisation.

2. Buy Third Party Bike Insurance If:

◦ You are buying insurance for your secondary, old or inexpensive vehicle.

◦ You rarely ride your bike or live in a low-risk city.

◦ You want to save the most on insurance premiums but accept higher financial risk for your bike’s repairs.

Frequently Asked Questions

1. Which insurance policy is more expensive - Third Party or Comprehensive?

The prices of the premiums for both insurance policies depend on the CC of a bike, and both follow the set of rules laid by IRDAI. Comprehensive Insurance is far more expensive than Third Party Insurance.

2. How are Third Party and Comprehensive Insurance different?

The key difference between comprehensive and third party bike insurance is in their extent of coverage. Comprehensive plans have additional coverage against accidents, theft and calamities, along with all the coverage options of Third Party Insurance.

3. Will I face the consequences if caught without a third-party insurance policy?

In India, riding without third-party insurance cover is a punishable offence. Heavy penalties are imposed on the bike owner if found without one. You will also have to pay a fine of INR 2000, with or without three months' imprisonment.

Conclusion

Bike Insurance is a must in India if you plan to ride your two wheeler on public roads. In terms of coverage, the third party bike insurance is the cheaper option of the two but only helps to fulfil the mandatory minimum legal requirement for two-wheeler insurance, i.e., coverage for third-party liabilities.

In contrast, comprehensive bike insurance costs more, but it combines both own damage cover and a third party cover to offer all-around protection for your vehicle. Additionally, with this policy, you can enjoy cashless repairs, NCB benefits and enhanced coverage via add-ons in exchange for a higher premium.

Ultimately, the final decision of picking comprehensive or third party bike insurance is yours. Depending on your personal coverage goals, budget and risk tolerance, you can choose between these two policies and ensure a hassle-free riding experience.

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

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