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Financial Service

Detailed Examination of Bike Third Party Insurance

If you have recently bought a two-wheeler and are excited to take it out for a ride, know that you cannot legally do so until you buy a two-wheeler insurance policy for it. A long term two-wheeler insurance policy covers you from financial losses if your bike meets with a mishap.

You can choose between a comprehensive and a third-party bike insurance policy. Of these two, third party bike insurance is the bare minimum insurance plan you need to ride your bike legally.

Read on to learn the details of third-party motorbike insurance.

What is Third-party Two-wheeler Bike Insurance Policy

Section 146 of the Motor Vehicles Act 1988 makes it mandatory for every two-wheeler to be covered under at least a third-party bike insurance. A third-party bike insurance policy covers the cost of damages done to a third party and third-party property due to your insured bike.

To see the details of your third-party bike insurance, visit the RTO’s website where your bike is registered and enter your bike registration number. The page will furnish your insurance plan details. Alternatively, you can also physically visit the RTO office to learn the details of your bike insurance.

What are Bike Insurance Third Party Premium Rates

The IRDAI has fixed the third-party bike insurance premium rates according to the bike’s cubic capacity. These premium rates are as follows:

Bike’s Cubic Capacity Premium Rate for Bike*
Under 75 cc ₹538
Between 75 cc and 150 cc ₹714
Between 150 cc to 350 cc ₹1366
Above 350 cc ₹2804

Benefits of Third-party Bike Insurance

Apart from being the most basic bike insurance policy mandated by the law, the third-party bike insurance policy has several benefits for bike owners. These are:

  • Inexpensive: The premium rates for this two-wheeler insurance plan are affordable, and you can opt for it if you have a restricted budget for insurance premiums.
  • Quick purchase process: With leading insurance companies like Tata AIG, you can quickly and easily buy a third-party two-wheeler insurance plan.
  • Legal coverage: Along with financial assistance, a third-party bike insurance policy also provides legal coverage if the third party decides to file a legal case against the bike owner.
  • Legal mandate: Maintaining a valid third-party two-wheeler insurance policy keeps you safe from serious troubles like fines and imprisonment.

How Does a Third-Party Motorbike Insurance Work

The parties involved in a bike accident are:

  1. First party: The bike owner
  2. Second party: Insurance company
  3. Third-party: Other party or person not associated with the first or second party but affected by the accident.

If an accident occurs and a third party gets injured or faces property damage, the costs for the same are covered by the third-party bike insurance policy of the first party. In addition, third-party disability and death claims are also covered under the third-party bike insurance policy. Moreover, if the third party files a lawsuit against the first party, the third-party bike insurance policy covers the legal expenses of the first party too.

What is Covered Under Third-party Bike Insurance Policy

The inclusions and exclusions of third-party bike insurance are as follows:

Inclusions Exclusions
A third party that got injured or suffered physical disability in the accident, which prevents them from returning to work, can file for a claim for the medical expenses and lost earnings. Damages caused to the insured two-wheeler are not covered under this policy.
Third-party bike insurance provides coverage of up to ₹1 lakh if there is third-party property damage due to the accident. If you pledge your bike to another party, and during this period, if the bike meets with an accident, the third-party damages arising from it are not covered under third-party bike insurance.
The policy also provides financial compensation to the owner or rider’s dependents if they die in the accident. If the bike gets involved in an accident outside the geographical scope mentioned in the policy, the damages are not covered under it.
If the bike owner gets permanently disabled or dies in the accident, his dependents can make a claim against the third-party bike insurance for the sudden loss of income. If the bike rider does not possess a valid driving licence at the time of the accident or was riding intoxicated, the damages arising from it are not covered under the policy.

Conclusion

Third-party bike insurance is a basic two-wheeler insurance policy that provides financial coverage for damages caused to a third party due to the insured bike. It is the bare minimum insurance policy that a bike owner must have to ride the bike on public roads.

*Disclaimer: Third party insurance premium rates are controlled by the IRDAI and is same for everyone, but it is still advisable to ask your insurance provider for a precise price information.

Alfonso Judson
the authorAlfonso Judson