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The Difference Between Comprehensive and Third-Party Bike Insurance Plans

As a bike owner, you might be aware that bike insurance is a legal mandate. The Motor Vehicles Act of 1988 makes it compulsory to at least have third-party insurance coverage for your bike. Hence, skipping on buying a bike insurance plan can land you in legal troubles. Other than legal protection, the right bike insurance policy can help to avoid financial losses in case of an accident.

Whether you choose to purchase bike insurance online or offline, you have two alternatives to choose from — third-party plans and comprehensive plans. If you are confused how each of them differ, you have come to the right place. Continue reading to know more. *

Basis of distinction Third-party policies Comprehensive policies
  1. Meaning
A third-party coverage, as discussed above, is the minimum required insurance cover by the Motor Vehicles Act. This plan offers protection against legal liabilities that may arise on the policyholder.  * Comprehensive plans, on the other hand, are insurance plans that offer coverage for not just legal liabilities, but also protection against damages to your bike. *
  1. Legal requirement
A third-party plan is the minimum coverage that all vehicle owners must possess to legally ride on the roads. * Comprehensive plans are not a compulsory requirement, but, in fact, an optional upgrade to third-party plans. *
  1. Coverage
Third-party plans provide protection to the policyholder in the event a third person is injured or faces damage to their property. Hence, this policy is also known as a liability-only cover.

Further, no protection is available for damages to your bike when you purchase a two-wheeler insurance with third-party coverage. *

Comprehensive plans, contrarily, extend their coverage to include repairs that are required for your bike. As accidents do not require repairs only for a third person’s vehicle, a comprehensive plan can help you cover these costs of repairs.
  1. Customisation
No customisation in coverage is available when it comes to third-party plans. In addition, the facility to purchase add-on covers is also not available. * Comprehensive plans can be customised using the add-on facility. Add-ons are optional policy features that help fine-tune your coverage to fit your needs. *
  1. Premiums
Since third-party coverage is required as minimum, its premium (bike insurance price) is governed by the regulatory, the Insurance Regulatory and Development Authority of India (IRDAI). * Comprehensive plans are divided in three parts – third-party cover, own-damage cover and personal accident cover.

While the premiums for third-party covers are decided by the IRDAI, the insurance company determines the premium for the own-damage cover. *

  1. No-Claim Bonus
Third-party plans do not offer any no-claim bonus at the time of renewal. * You can visit the official website of IRDAI for further details. If no claims are made during a policy period, comprehensive plans provide a no-claim bonus on the own-damage component. This no-claim bonus is a markdown in the premium at the time of renewal. *
  1. Who must buy?
Third-party plans are generally advised for buyers that have a tight budget as this policy offers limited coverage and no protection for your bike. * Comprehensive plans are highly recommended policies by insurance experts for the broad coverage it offers. Additionally, it is also advised to modify the coverage based on your personal requirements using the add-ons facility. *

The above table provides a comprehensive overview of which plan you must opt for helping you clearly distinguish the different features of each policy highlighting the benefits and limitations.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.

 

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