India is a massive market for two-wheelers. They are an excellent choice for transport considering the weather, roads and traffic conditions. However, riding a bike also comes with its share of risks, more than any other form of transportation. Unexpected accidents can harm the rider, the pillion rider, and the two-wheeler in various ways, from mild to severe, which may also result in increased financial hardship. Therefore, purchasing two-wheeler insurance coverage is a prudent choice to make when you decide to buy a bike.
The Indian Motor Vehicles Act, 1988 has made it mandatory for all vehicle owners to have an insurance policy in place. According to data from India’s Insurance Information Bureau (IIIB), most scooters and motorbikes and nearly 60% of all vehicles on Indian roads lack insurance. One of the leading causes is that after the first year, most two-wheelers don’t get their insurance renewed.
In India, the two primary categories under which insurance policies fall are comprehensive bike insurance and third-party liability insurance. Although third-party bike insurance is required by law in India, it only offers limited protection, as the name implies, it only covers damage to third parties (people, vehicles, or property). Hence, choosing comprehensive insurance is the better course of action. It provides more comprehensive coverage, which includes third-party liability and own damages.
Given the bad condition of roads in India coupled with increasing incidences of rash driving daily, people have realized the value of a good insurance policy. Accidents can happen anywhere. Apart from physical and emotional trauma, it also causes a dent in your finances as bike repair doesn’t come cheap. The comprehensive policy ensures financial security in case of disability, injuries or death resulting from the accident.
Let’s find out the difference between both the popular insurance policies
Comprehensive Insurance v/s Third-Party Liability Insurance
|Comprehensive Insurance||Third-party Liability Insurance|
|Higher Premium||Lower Premium|
|Offers exhaustive coverage||Offers limited coverage|
|Coverage for the insured’s own bike and third-party liabilities.||No coverage for the insured’s bike. Only covers third-party liabilities.|
|In case of an injury to the insured, medical expenses are taken care of.||In case of an injury to the insured, medical expenses have to be paid by the insured.|
|Comes with add-on covers||No add-on provision|
Major Benefits Offered by Comprehensive Bike Insurance
Covers Damages Caused Due to Natural Calamities
Mother Nature’s fury cannot be disputed at any cost. This is precisely why comprehensive insurance considers this and compensates the bike owner for the losses incurred during disasters such as earthquakes, floods, cyclones, storms, etc.
Covers Damages Due to Man-made Calamities
When disasters like riots, fires, explosions, terrorist attacks, strikes, unfortunately takes place, they can cause severe damage to your prized possession, your two wheeler. With comprehensive bike insurance, you can set your worries aside as your policy will cover these aspects and protect you from their financial repercussions. Your insurance provider will compensate you for the loss incurred from such disasters without any trouble!
Offers Cover Against Theft of the Vehicle
In the unfortunate event of your two wheeler getting stolen, this plan pays the coverage amount equal to the IDV of your bike. It is advisable that you inform the insurance provider about the same at the earliest possible to ensure a seamless and successful bike insurance claim settlement.
Includes Third-party Liability Cover
The Motor Vehicles Act, 1988 mentions that third-party bike insurance is mandatory. Hence it has been included in the comprehensive insurance package. This means that any damage or loss incurred by the third party will be compensated under this policy. The damage could be to property, vehicle or person.
Exclusions of Comprehensive Bike Insurance
While this policy certainly offers excellent advantages over its counterpart, let’s also take a look at the exclusions:
- Cover will not be offered if there are damages or losses incurred when the policy has already expired or is inactive at the time of the occurrence.
- Damage resulting from a mechanical or electrical breakdown.
- Natural wear and tear of the bike.
- Loss from a mishap incurred while riding the vehicle without a valid driver’s licence, or failing to follow traffic rules.
- Damage caused when riding under the influence of intoxicating or banned substances.
- Using the bike for commercial purposes or any other fraudulent purpose.
Having understood the major differences between the two policies, there are no second guesses as to which policy is the wiser choice. Yes, comprehensive bike insurance cover makes more sense as it covers expenses of all damages suffered by the insured vehicle, its owner, and the affected third party. At the same time, the other offers only minimal protection.