Types Of Two-Wheeler Insurance In India

Bad road conditions and reckless driving in India has increased the risk of accidents especially for the bike or two-wheelers which are considered to be more vulnerable as compared to cars or any four-wheelers. 

Thus, having a proper two-wheeler insurance policy is essential as it instantly helps you with the financial and legal liabilities arising from any accident or collision from your insured bike. 

Here’s a guide which talks about the different kinds of insurance policies and their coverage in depth and helps you to choose the best for your two-wheeler. 

Third Party Two-Wheeler Insurance

Third party two-wheeler insurance is a policy which provides financial protection to insured if something happens to any other person or property from their own bike. It also provides legal and financial help in case of the death of a third party in an accident or collision caused from your insured bike.

As per the Motor Vehicles Act, 1988, it is compulsory for every bike rider or owner in India to at least have a third party bike insurance. If someone fails to acquire this insurance policy then it might lead to traffic penalties. The bike owner can easily purchase this policy online and protect themselves against any third party liabilities.

Key Benefits of Third Party Two-Wheeler Insurance

• Affordable premium starting from INR 500.
• Can buy the policy online within minutes.
• Includes personal accident cover (PAC) of INR 15 lakh.
• Unlimited liability in case of the death of a third party.
• Coverage up to INR 7.5 lakh in case of the property damages to a third party.
• Avoid unwanted penalties as not having a third-party insurance can lead to the fine of INR 2,000 for the first offense and INR 4,000 or imprisonment of up to three months for the consequent offense.
• Less legal stress in case your insured bike collides with any third party and causes them any damages.
• The policyholder can raise a claim even for the incidents happening outside the specified location as this policy is valid across India.

What is Covered in Third Party Two-Wheeler Insurance?

• Accidental injuries or death caused to a third party.
• Damage or any kind of loss to third property.
• PAC for owner-driver against personal injury or death, permanent disabilities with coverage of up to INR 15 lakh.

What is Not Covered in Third Party Two-Wheeler Insurance?

• Own damages to your vehicle.
• Damages caused due to natural disasters such as floods, earthquakes.
• Coverage for bike theft.
• No option to customize the plan with add-on covers.
• No coverage, if you are driving without valid documents.
• No coverage, if you are driving under the influence of toxic substances such as alcohol or drugs.

How to File a Claim for Third Party Two-Wheeler Insurance

• If your bike caused damage to any third party, then they must file a claim and register an first information report (FIR) at the nearby police station, if needed.
• You need to provide the details of your third party insurance policy to the affected party.
• Inform your insurance company about the incident immediately. The insurance company will also receive the complaint from the third party.
• The insurance company will transfer the case to the Motor Accident Claims Tribunal.
• The tribunal decides on the final compensation amount and the insurance company makes the claim to the third party accordingly.

Third-party Two-Wheeler Insurance Premium Rates

The third-party premiums have been already decided by the insurance regulator of India, IRDAI. The  insurance premium of a third party insurance is based on the engine capacity of the two-wheeler, which are as follows for FY 2022-2023:

 Related Article: Best Bike Insurance Companies In India 2023

Comprehensive Two-Wheeler Insurance

As the name suggests, a comprehensive two-wheeler insurance provides extensive coverage to the insured, as it not only covers third party liabilities such as accidental injuries and property damage but also covers own damages to your bike arising out of accidents, natural calamities, theft, vandalism, among others.

This kind of policy also provides a personal accident cover which covers owner-drive to the tune of INR 15 lakh. A PAC covers all the medical costs related to injuries or death caused to another party from the insured bike.

A comprehensive policy is extensive in nature and thus more expensive than a basic insurance. The policyholder can also enhance more coverage by opting for useful add-on covers such as zero depreciation, engine and tyre protection cover, etc. However, these add-ons can only be added at an extra premium cost. Let’s see the most common kinds of add-ons are given under comprehensive two-wheeler insurance policy:

Zero Depreciation: This is the most important add-on cover in a two-wheeler insurance policy. With this cover, you do not need to worry about the depreciation cost, as it is not deducted from the sum insured and thus you can claim fully.

Return-to-Invoice: This add-on helps the policyholder to claim for the full invoice cost of the bike if it gets stolen or damaged in any kind of unforeseen event. Generally, insurance companies pay you as per the purchase price of your bike, including the road tax and registration charges.

Emergency Assistance: This cover helps you to get immediate financial help if you and your bike gets stuck due to any kind of mechanical or breakdown situation. The insurance companies help in with the towing, repair, fuel replacement, battery repair or replacement, and other necessary on-spot repairs.

Additional PAC: This cover provides an extra or additional personal accident cover which is beyond INR 15 lakh and gives more financial protection in case of any accidental death or bodily injuries to owner-driver.  

Consumables Expenses: With consumables cover, you get reimbursement for the several consumables such as screw, nut or bolts, engine oil, gear box, brake oil, if any of these consumables gets damaged.

Engine and Tyre Protector: This covers provides an extra layer of financial protection to your bike’s engine or tyre, if they get damaged due to any collision or accident.

Key Benefits of Comprehensive Two-Wheeler Insurance

• Provides extensive coverage than the basic insurance policy.
• Covers both third-party liabilities and own car damages thus offer all-round protection.
• Offers protection to your bike due to fire, theft, earthquake etc.
• Includes personal accident cover (PAC) of INR 15 lakh.
• The policyholder can choose from a wide range of add-ons to enhance the coverage of your policy.

What is Covered in Comprehensive Two-Wheeler Insurance?

• Covers if the bike gets stolen.
• Covers if the bike gets damaged due to natural or man-made calamities.
• Coverage to Death or Disability of the Rider
• Provides the personal accident cover up to INR 15 lakh.
• Customizable add-on covers.

What is Not Covered in Comprehensive Two-Wheeler Insurance?

• General wear and tear of two-wheelers.
• Mechanical or electrical breakdown of the insured two-wheeler.
• Any damages which occurred while not carrying a valid license.
• Any damages which occurred while driving under the influence of toxic substances.

How to File a Claim for Comprehensive Two-Wheeler Insurance

Like any other form of insurance, the policyholder can make a claim either via cashless process or by reimbursement. The steps to file a claim differ from each other. Let’s understand the process of each method by following these steps:

Cashless Claims:

• Inform your insurance provider directly by contacting them via toll-free number or visit their website.
• Register or file your claim and submit the necessary documents.
• Now, the insurance company assigns an assessor or a claim inspector who takes up the charge of evaluating the damage incurred to your vehicle and submit their report to the insurance company.
• As soon as the insurance company approves the claim report, your bike gets transferred to the nearest network garage for repair work.
• The insurance company settles the bill directly with the networked garages and settles the claims via cashless process.

Reimbursement Claims:

• Inform your insurance provider directly by contacting them via toll-free number or visit their website.
• Register or file your claim and submit the necessary documents.
• Take your damaged bike to the nearest non-networked garage and get the bike repaired.
• The policyholder is required to settle the final bill and pay directly to the garage.
• Submit the original bills and necessary documents and a claim settlement form to the insurance company.
• Once the claim is approved, the insurance company will compensate you and thus the claim amount will be reimbursed.

Which Policy is Better, Comprehensive or Third-party Bike Insurance?

Selecting the best type of two-wheeler insurance for your two-wheeler is very essential, as bike riding is often associated with a gamut of risks and perils, and thus you cannot take this lightly. As we have discussed about both the types of insurance policies, and thus it is much easier to select one out of the two options.

Financial experts generally believe in choosing a comprehensive type of two-wheeler policy as it helps in providing the most optimum kind of coverage which covers all the possible risks and perils associated with bike riding. Whether it is saving you from the legal and financial liabilities of a third party, or, helping you to provide coverage for your own damages, a comprehensive policy has it all.

It also gives you the freedom in choosing various kinds of useful add-ons, which a third party insurance policy does not. Thus, if we look from the perspective of coverage, extra protection, premium cost, a comprehensive policy comes out to be a better choice for bikers

Moreover, in the middle of stringent traffic laws and hefty fines associated with not having proper bike insurance, you really cannot afford to not have one!

Frequently Asked Questions