According to the Indian Motor Vehicles Act, 1988, it is a legal requirement for motorcyclists in the country to be insured against third-party liabilities. Unless this two wheeler insurance is in place, driving the vehicle on Indian roads is illegal.
Additionally, having your vehicle insured in the wake of rising tragic road fatalities has become increasingly important, as it provides financial security when faced with any adversities. According to a recent report from the government, since the turn of the century, India has had an average of 1 36,118 road deaths per year. While deaths or injuries due to road accidents may not be avoided, protecting someone's financial future is possible with third-party bike insurance. Keeping this in mind, the government has made it mandatory for bike owners to have a third-party two-wheeler insurance policy.
You also need to follow certain protocols for financial protection against third-party claims. These include filing an FIR at the nearest police station and ensuring the accident was not under the influence of intoxicating substances. Let's read more.
New Bike Owners Must Get a Five-year Third-party Coverage
A recent Supreme Court ruling dictated that all general insurance companies throughout the country must offer their customers a long-term third-party bike insurance policy if they wish to purchase a vehicle from them. To comply with the court order, the IRDAI has put forward a five-year policy for new two-wheeler owners.
This means that every new owner of a bike is required, from now on, to carry a five-year third-party insurance policy on their newly purchased possession. It will be communicated to the policyholder if any changes are made to the benefits or terms of the policy.
Third-party Bike Insurance Benefits
A third-party bike insurance policy offers many advantages that can hardly be measured in terms of their value. As part of the policy, the insurer will take responsibility for third-party liabilities arising from an accident that damages, injures, or kills a third party. The premium of this policy remains lower than other bike insurance types. Moreover, this policy protects you from paying a hefty fine when you get into an accident on the road. You can have the following benefits of this bike insurance policy.
Read more -Top Benefits of Third-party Bike Insurance
Death or Personal Injury to a Third-party
The policy takes care of the medical expenses incurred in the event of personal injuries resulting in the third party's hospitalisation. A compensation amount is also given to a family member, up to a specified limit in the event of an unfortunate death.
Compensation for Damage to the Third-party Property
Generally, third-party insurance policies provide compensation of up to INR 7.5 lakh in case of property damage to third parties with an insured two-wheeler.
Insurance for Personal Accidents
One can avail of this extra benefit at an affordable premium, starting at a minimal cost. It will protect the insured driver and vehicle as well.
Calculation of Third-party Bike Insurance Compensation
- If the insured person dies, the beneficiary can claim 100% of the sum insured. However, please note that if a person's body is damaged, the percentage offered by insurers will vary.
- A loss of a limb or the loss of sight in one eye would result in a 50% payment of the sum insured.
- In case of property damage, you may be entitled to compensation of up to INR 1 lakh.
- For compensation, the driver or owner-driver must operate the vehicle with a valid driving license or carry a valid roadside assistance card.
Bike Insurance with Third-party Coverage
Several events are covered by a third-party bike insurance policy, also known as the 'act only' policy. These include:
- Bodily injury to third parties and death of third parties as a result of an accident involving your insured bike.
- There is a limit of Rs. 1 lakh in the limit of liability for damages to third-party property.
- Owners and drivers of motorcycles are required to have a personal accident insurance policy worth INR 15 lakh.
- Adding a personal accident coverage premium to your bike insurance policy will get you compensated for your injuries, disabilities or even death.
Insurance Exclusions for Third-party Bikes
It is also important to point out some limitations to a third-party bike insurance policy. It is essential to know them in advance so there will be no confusion when filing a bike insurance claim. The bike insurance company may reject you for one of the following reasons:
The responsibility of a third-party bike insurance policy is limited to losses or damages to another vehicle or person. An insured bike will not be covered if it has been damaged by accident.
Driving Without a Driving License
Your claim will be rejected if the driver is found driving without a valid driving license at the time of an accident.
You must avoid drinking and driving for your bike insurance claim to be accepted.
Beyond the Geographical Scope of Cover
Any incident outside the policy's geographical area will not be eligible for claims.
A third-party bike insurance policy is not covered for insurance claims derived from contractual obligations.
War or Riots
The insurer does not cover substantial loss or damage arising from radioactive contaminants, war or war-like conditions, or any other situation that can lead to such loss or damage.
Third-party bike insurance is a legal obligation necessary if you want to drive your two-wheeler on Indian roads. It protects you from financial liability, reducing your overall monetary burden should you meet with an accident.