Third-Party Vs Own-Damage Bike Insurance
Understand the difference between third-party vs standalone own-damage two-wheeler insurance? Read along to know more.
If you are also confused about the difference between third-party bike insurance and own-damage bike Insurance, you are at the right place. When your bike meets with an accident with another vehicle, your bike will be insured under your own damage bike insurance and the other person's vehicle will be covered if you buy third-party bike insurance. To cover, both vehicles, you need to purchase a comprehensive Insurance plan. Let us understand the difference between OD Bike insurance and third-party insurance in detail in this article.
Table of Contents
What is Third Party Insurance for Your Bike?
A third party insurance policy is a mandatory requirement for every two-wheeler in India according to the Indian Motor Tariff. Riding a two-wheeler without one could lead to a fine of Rs. 2,000 and/or imprisonment for up to 3 months.
Coverage: Third-party bike insurance policy helps cover damages caused to the third party such as bodily injuries, death and property damage in case of an accident. For two-wheelers, this type of policy compensates up to Rs. 1 lakh in case of property damage.
Damages Not Covered By Third-Party Two-Wheeler Insurance
The following are the instances in which no claim is paid for by the third-party insurance:
- Damages caused due to Illegal Driving: This category includes underage driving, driving without a license, driving while under the influence of alcohol, drugs or any other intoxicating substances.
- Any form of consequential damages.
- Damages caused by natural disasters.
- Damages caused by using the two-wheeler beyond its prescribed limitations.
- Damages that occur due to accidents in locations outside the prescribed geographical limits of the insurance policy.
- Own damages to the policyholder’s two-wheeler.
What is a Standalone Own-Damage Policy for Bike?
A standalone own-damage policy is the one for you if you’re looking to protect your own two-wheeler. This type of policy is not mandatory, but it is a wise choice to purchase one along with third-party insurance. In case of accidents, it will compensate for the damages to your two-wheeler.
Coverage: Own-damage covers that are standalone or part of comprehensive policies can avail the No Claim Bonus (NCB). This is the reward given to the policyholder for a claim-free year. Moreover, the bonus amount increases with every consecutive claim-free year from 20 to 25 per cent, going all the way up to 50%. Lastly, unlike third party covers, own-damage covers provide compensation for natural and manmade calamities, fires and theft.
Also Know: Two Wheeler Insurance Add-ons
Damages Not Covered by Own-Damage Policy for Two-Wheelers
The following are the things that are not covered under standalone own-damage covers:
- Illegal Driving: Similar to third-party insurance covers in cases where an accident happens due to underage driving, driving while intoxicated, driving without a license etc. no compensation is provided for the damages to the two-wheeler.
- Non-accidental damages: damages such as two-wheelers such as mechanical or electric failures, breakdowns and wear and tear will not be compensated for by the own-damage policy.
- Third-Party damages: Damages to the third party are not covered by the standalone own-damage covers.
- Other Reasons:
- Mishaps that occur outside the prescribed geographical limits, will not be compensated for.
- Damages that occur due to consequential losses are not covered.
Conclusion
As discussed, third-party insurance policies protect third-party liabilities in case of a mishap while a standalone own-damage policy covers costs for the policyholder’s two-wheeler. There are some circumstances under which compensation is not provided, such as illegal driving, accidents outside geographical limits or non-accidental damages etc. Lastly, some crucial aspects of insurance policies can be availed as add on to the policy to provide flexibility for individual needs.
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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
