Why is bike insurance mandatory in India?
Published On Apr 28, 2021 10:00 AM By InsuranceDekho
Wondering why you have to purchase third party insurance in India? Read this article to clear your doubts.
Table of Contents
Having a two-wheeler in India is extremely convenient. With the constant traffic and congested roads it can be a real time saver to have a two-wheeler. However, along with the benefits there are certain drawbacks of using the two-wheeler on a regular basis. The most important of these are the risks and uncertainties that come with using them on a regular basis. In such cases, insurance forms a layer of protection for the rider and his two-wheeler in the event of a mishap. In this article, we will elaborate on why two-wheeler insurance is compulsory in India.
What Type of Two-Wheeler Insurance is Compulsory in India?
When purchasing insurance for your two-wheeler in India, there are three types of insurance to choose from; third party insurance, standalone own-damage insurance and comprehensive insurance plans. In India having third party insurance for your two-wheeler is compulsory. It takes care of third party liabilities in the event of an accident including bodily injury, death and property damage. The maximum compensation it offers for property damage is only Rs 1 Lakh. Since it is mandatory, if caught without it you will be fined heavily. The fine is Rs 2000 and/or imprisonment for up to 3 months.
Why is Third Party Two-Wheeler Insurance Compulsory in India?
With the congested roads and the risks of the two-wheeler accidents on the road are very common and regular incidents that occur on the road. In such cases, the person who is not at fault is often left to fend for themselves with no fault of their own. In many cases, they do not have the resources to deal with the mishap. Similarly, it is possible that in such cases that the driver at fault also does not have the resources to compensate the third party. Hence, the third party insurance ensures that if such a situation occurs the insurance company can step in and provide the much required compensation for the losses inflicted on the third party. The third party insurance was made compulsory by the Motor Vehicles Act of 1988.
The third party insurance claim settlement procedure is different from the other types of insurance. If there is a situation where a mishap occurs and a claim is filed, the documents must be submitted to the insurance provider. However, the final decision of the claim approval lies with the Motor Accident Claims Tribunal. However, since the Tribunal is always flooded with cases this part of the procedure is often delayed and can take far longer.
In a nutshell, the third party insurance is compulsory for two-wheelers as it ensures that the third party liabilities in case of a mishap are always taken care of. However, if you are looking to purchase insurance for your two-wheeler make sure to consider a comprehensive plan or standalone own damage cover. The third party insurance does not cover own damage costs or offer add-on covers. It only offers the most basic coverage for the insurance provider.
Third Party Bike Insurance Benefits Explained
Difference Between Third-Party And Standalone Own-Damage Two-wheeler Insurance
Disclaimer: This article is issued in the 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.