In a world filled with unpredictable twists and turns, insurance stands as a reliable shield. It protects us from the unexpected. Whether it is safeguarding our health, securing our homes, or even our vehicles, insurance helps in mitigating potential risks. And when it comes to our two-wheelers, ensuring proper insurance coverage becomes paramount. This is because you can never be too prepared when hitting the open road on your bike.
When it comes to two-wheeler insurance, there are two major types - a comprehensive bike insurance plan and a third-party bike insurance plan. In order to find the right coverage for your bike, it is essential to have an in-depth understanding of both these plans.
In this article, we will discuss everything you need to know about comprehensive and third-party insurance plans - to help you make an informed decision.
What is a Comprehensive Bike Insurance Plan?
A comprehensive bike insurance plan offers extensive coverage that not only protects your two-wheeler from potential damages but also third parties and their property, in the event of an unfortunate incident.
What is Covered Under A Comprehensive Plan?
Let's take a closer look at the coverage a comprehensive plan offers -
1️⃣ Own Damage Cover
It protects your bike against damages caused due to unexpected incidents such as accidents, theft, or total loss.
2️⃣ Third-Party Cover
When you choose a comprehensive plan, you are not only safeguarding your own bike but also the well-being of others. The third-party cover guarantees that any bodily injury or property damage to a third-party are covered.
3️⃣ Insured Declared Value
The Insured Declared Value (IDV) determines the coverage amount that you may receive for your bike during a claim. If your bike is completely damaged or stolen, the IDV is the maximum amount that your insurer will pay you.
Add-ons are basically optional benefits that you can customise your comprehensive plan with, for extra protection, for which you need to pay an extra fee. Some add-ons that you can choose include Zero Depreciation Cover, Engine Protector, No Claim Bonus Protector, Roadside Assistance Cover, Return to Invoice Cover, Consumable Cover, etc.
Diya decides to purchase a comprehensive insurance plan for her bike with a cover amount of Rs. 2 lakhs. She also opts for an Engine Protector add-on with her plan. One evening, while driving back home from work, Diya meets with an accident that severely damages her bike’s engine. Her engine protector cover will cover the expenses incurred in repairing or replacing the damaged engine components.
What is Not Covered Under A Comprehensive Insurance Plan?
A comprehensive plan doesn't provide coverage under these circumstances –
1️⃣ Wear and Tear
Damages resulting from natural wear and tear or ageing of the bike will not be covered.
2️⃣ Drunken Driving
Insurance companies specifically exclude coverage for accidents caused by driving under the influence of alcohol.
Jim attends a social gathering, consumes alcohol, and decides to drive back home. Unfortunately, he loses control of his bike, which damages it severely. These damages won’t be covered by his comprehensive insurance plan since he drove the vehicle under the influence of alcohol.
3️⃣ Consequential Damages
Damages caused to the vehicle as an indirect consequence or result of an untoward incident will not be covered.
Gaurav's bike was involved in an accident and needed to be towed to the nearest garage for repairs. Unfortunately, while unloading the vehicle at the garage, the rear parking light of the bike was damaged. Since consequential damages were not covered under his comprehensive insurance plan, the replacement cost of the rear parking lights was borne by him.
4️⃣ Driving Without a Valid Licence
If the driver of the bike does not possess a valid driving licence, any damages caused to the vehicle will not be covered.
What is a Third-Party Bike Insurance Plan?
As per the Motor Vehicles Act of 1988, having at least a third-party insurance plan is mandatory if you own a bike and want to take it out on the road. It protects you from any legal and financial liabilities arising from damages caused to a third party and/or their property.
Damages to your own vehicle are not covered by this type of insurance.
What is Covered Under A Third-Party Bike Insurance Plan?
Here’s what the plan covers –
1️⃣ Death or Bodily Injury to the Third-Party
In the event of an accident, a third-party insurance plan provides coverage for any bodily injury or even death of the third party involved in the accident - ensuring that they receive the necessary compensation.
2️⃣ Property Damage
Third-party-only insurance plan also provides coverage for any property damage caused to a third party. This can include damage to their vehicle, house, shop, boundary wall, etc.
What is Not Covered Under A Third-Party Bike Insurance Plan?
The plan will not offer coverage under the following circumstances -
1️⃣ Own Damage
A third-party bike insurance plan doesn’t cover the damages sustained by your vehicle. This means that if you are involved in an accident that results in damage to your own bike, you will have to bear the expenses of repairing it.
Harini meets with an accident that resulted in significant damage to the front headlight of her own bike. She is informed that the repairs would approximately cost Rs. 10,000. But, Harini only has a third-party insurance plan that won’t cover the damages to her own vehicle. So, she needs to bear the expenses of repairing it.
2️⃣ Drunken Driving
If you cause any damages to a third party or their property while driving under the influence of alcohol, those damages will not be covered.
While a third-party bike insurance plan provides coverage for damages to a third party, it does not offer any protection for your own health or life. However, if you want coverage for permanent disabilities or death even after owning a third-party insurance plan, you can buy a separate personal accident cover.
4️⃣ Driving Without a Valid Licence
If you cause any damages to a third party or their property while driving without a valid licence, those damages will not be covered by the plan.
How to Find Out If Your Insurance is a Comprehensive or Third-party Bike Insurance Plan?
You will need to consider a few key aspects to determine the same. Let’s see -
Before Purchasing a Plan
Insured Declared Value
When you purchase a comprehensive bike insurance plan, you will be able to see the Insured Declared Value (IDV) of your vehicle. However, with a third-party insurance plan, this value may not be provided, as it only covers damages caused to third-parties and their property.
The premium you pay will depend on the type of plan you choose. In general, a comprehensive plan will come with a higher premium compared to a third-party insurance plan.
A comprehensive bike insurance plan offers several optional add-ons, such as zero depreciation, roadside assistance, personal accident cover, etc. However, with a third-party insurance plan, the only available add-on is a personal accident cover.
Compared to a third-party insurance plan, a comprehensive bike insurance plan may offer discounts on the Own Damage component. However, since third-party insurance premiums are regulated by IRDAI, there may not be any discounts.
After Purchasing the Plan
When you purchase a bike insurance plan, the insurance company will provide you with a policy document. It will clearly indicate the type of insurance you have - whether it is a comprehensive plan or a third-party plan.
In case the plan type is not mentioned or you are unable to find it, you have another option to determine the same. If your plan documents show an IDV value, then it is likely that you have a comprehensive plan. On the other hand, if the IDV is 0, it is an indication that you have a third-party plan.
In a comprehensive plan, the premium section is divided into two parts – own damage premium and third-party premium. On the other hand, a third-party plan includes only the third-party premium.
To ensure you are adequately covered in case of any mishap, it is crucial to understand the type of bike insurance plan you have. By carefully reviewing the plan specifications, you can identify the type of plan you own. It's important to remember that comprehensive insurance covers damage or loss caused to your own bike as well as any third-party liability. Third-party insurance, on the other hand, only covers your liabilities toward third parties and their property. Therefore, it is important to consider your own needs when deciding between comprehensive or third-party insurance.