What is Third Party Bike Insurance Policy?

A third party bike insurance policy is a type of insurance plan which insures a bike owner against all kinds of third party liabilities which may arise due to an unfortunate event like a road accident or collision involving the insured’s bike. The Indian Motor Tariff 2002 mandates every bike owner to have at least a third party bike cover. New bike owners are compulsorily required to have a long-term bike insurance policy valid for 5 years, others bike owners are free to choose the validity of the insurance cover.

As per the 2019 traffic rules, riding a bike without having at least a third party insurance policy is punishable by a fine of Rs. 2,000 and/or imprisonment of up to 3 months for the first offence.

What All is Covered Under a Third Party Bike Insurance?

  • Bodily injuries sustained by third party; the amount of compensation is decided by a court of law.
  • Death of a third party; the compensation amount is provided by a court of law.
  • Third party property damage up to Rs. 7.5 lakh
  • Expenses incurred during the court trial

Insurer’s Share In Compensation In Case of Injury/Death of Third Party

Events

Compensation Liability of Insurer

Bodily injury, loss of one limb or one eye sight

50%

Loss of both the limbs or both eye sights

100%

Permanent disability/Death

100%

What Is Not Covered Under Third Party Bike Insurance Policy?

  • Bodily injuries sustained by the policyholder and co-passengers of the insured's car. To insure oneself, the bike owner needs to purchase a personal accident (PA) cover. The PA cover is mandatory, however, it is the choice of the bike owner whether to purchase it with the insurance cover or separately.
  • Own damages sustained by the insured's bike. For this, a bike owner can purchase either a comprehensive bike insurance policy or a standalone own damage bike insurance policy.

Third Party Bike Insurance Policy Premium Rates

The premium rates for one-year third party bike insurance policy for the year 2019 as declared by IRDAI are as follows:

Engine Capacity

Premium Amount

Not above 75cc

Rs. 427

Above 75 cc but not above 150 cc

Rs. 720

Above 150 cc but not above 350 cc

Rs. 985

Above 350 cc

Rs. 2,323

Also Read

Difference Between Comprehensive and Zero Depreciation Bike Insurance Policy

All About Bike Insurance Zero Depreciation Cover


Disclaimer: This article is issued in 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.

Add-ons For Your Bike Insurance Policy

  • Zero Depreciation

    Like other assets, the value of your bike also depreciates constantly with time and the liability of this expense by default rests with the policyholder. A zero depreciation add-on protects you against the depreciation expenses incurred by your bike. Thus, if you opt for a zero depreciation cover, depreciation expense of your bike is not deducted from your claim amount at the time of a claim settlement. This add-on is available with comprehensive bike insurance plans as well as standalone bike insurance plans. This is one of the most popular and recommended bike insurance add-on covers.

  • Invoice Protection

    In case of total loss (more than 70% damage) or theft of your bike, the insurance company pays you the Insured Declared Value of your bike as compensation. However, this Insured Declared Value (IDV) is less than the invoice price which you pay at the time of purchasing your bike. The Invoice Protection add-on cover helps you claim the Invoice Price, i.e. total ex-showroom price of your bike plus taxes plus registration charges, of your bike in case of total loss or theft of your bike.

  • NCB Cover

    No Claim Bonus is the reward which is given to the policyholder for not making any claim during the policy period. This reward is offered by the insurer in the form of a discount on the own-damage premium of the bike insurance policy at the time of policy renewal. The NCB ranges from 20% to 50% of the own-damage premium depending on the number of claim-free years. However, if you make even a single claim during the policy period this NCB gets lost. But, with the NCB Cover, you can keep your NCB intact even after making a claim during the policy period.

  • Engine Protection Cover

    The damages incurred by the engine of the bike are by default not covered under a bike insurance policy. However, if you opt for an Engine Protection Cover, the insurer will be liable to compensate you for damages incurred by the engine of your bike such as damage due to leakage of lubricants, water ingress, hydrostatic lock, damaged gearbox, broken crankshafts or pistons and cylinders. The repair cost of the internal engine parts is often high and can sum up to thousands of rupees or more. Thus, addition of this add-on to your comprehensive or standalone bike insurance policy can save you from these expenses.

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