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Difference between 3rd Party & Comprehensive Two Wheeler Insurance

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Published on February 28, 2021. EST READ TIME: 2 MIN



Are you planning to buy a bike? Then, along with doing a thorough research on the different bike models, you will also need to check out the available two wheeler insurance policies. Why? Because the Motor Vehicle Act, 1988 makes it mandatory for a bike owner to have at least a third party liability insurance failing which a person can be fined and/or jailed or sentenced to community service. Bike insurance policies available in India are of two types - third party two wheeler insurance and comprehensive two wheeler insurance. If you are a two-wheeler owner, you must make yourself aware of the differences between the two before taking that final call!

What is a Third Party Two Wheeler Insurance?

A THIRD PARTY TWO WHEELER INSURANCE offers protection from damages to any third person who may be a victim of any accident. The third party policy sets a collective system to cover the damages of people falling victim to road accidents. It does so by pooling the insurance contribution from all vehicle owners. In case of an accident, the court of law pronounced damages are paid from this pool of third party policy that also protects bike owners from the extreme financial burden.

What is a Comprehensive Two Wheeler Insurance?

A COMPREHENSIVE TWO WHEELER INSURANCE includes the components of a third party policy and brings to it, the own damage cover for bike owner. This means that in case of an accident, the cost to repair your own bike will be covered by the pool of own damage component of the insurance buyer. When you buy two wheeler insurance online, you are also given the option to add on a personal accident cover mandated by Insurance Regulatory and Development Authority of India (IRDA). Further, the policy can also include various beneficial addons like roadside assistance, zero depreciation cover and engine and transmission protection.

What is the difference between two?

Cover-Based Differences

The cover-based difference is the primary factor, which separates a comprehensive two wheeler insurance policy and a third party two wheeler insurance policy. A comprehensive policy provides more holistic protection because it covers for damages to your own bike as well as damages to any other party involved in the accident. Most comprehensive policies also include the mandatory personal accident cover for the driver as well. On the other hand, a third party policy only covers any risk or damage to other people. It does not offer any protection to you or your bike. So, in case of accidental repairs, bike owners with only third party cover will not help you at all.

Legality-Based Differences

Legality-based differences are the most important aspect of two wheeler insurance that all bike or scooter owners must be aware of. Keep in mind that the law requires at least a third party cover. This means that a third party two wheeler insurance fulfils the legal requirement on its own. A comprehensive policy must include third party cover as well as own damage cover to be legally acceptable. A policy that only provides for own damage cover is not enough to fulfil the legal insurance requirement. 

Cost Based Differences

The comprehensive insurance and third party insurance differ a lot based on the cost that you pay for them. If you compare the two when you buy two wheeler insurance online, you will find that third party policy is always cheaper than comprehensive cover. This is simply because third party liability does not include any cost to protect your own damage. Further, it must also be considered that third party policy prices are fixed by IRDA. The prices of comprehensive policy are subject to variation depending upon different factors like insured declared value (IDV) of bike, any add-ons included by the buyer, and no claim bonus applicable to buyer. 

Conclusion

On the face of it, a third party two wheeler insurance might seem like a good choice for most people, but the reality is exact opposite. It is always best to choose a comprehensive two wheeler insurance policy because of its superior protection that bring complete peace of mind to bike owners.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

This blog has been written by:

Mukesh Kumar | Motor Insurance Expert | 36+ years of experience in insurance industry 
A veteran in the insurance industry, Mukesh Kumar has the expertise of handling various functions like Business Development, Underwriting, Claims, Human Resources, Quality Management and Marketing. With rich knowledge of the industry, he loves to share his views on topics of insurance sector and takes special interest in educating people on advantages of having insurance.

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