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Your Guide To Third-Party Bike Insurance in India

Sampurna Mitra|6 min read|30 May, 2022

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If you own a bike or scooter, you know that having a two-wheeler insurance policy is a must. Whether you want to ride in a small town or through crowded lanes in metro cities, having at least a third-party bike insurance is a legal requirement.

A bike insurance is like a helmet that you wear when you ride. Just like how a helmet protects the rider from head injuries in an accident, bike insurance provides financial protection if things go wrong.

When you look up bike insurance options, you will find there are different offerings. The most basic cover available is third-party bike insurance.

What Is Third-Party Bike Insurance?

third-party bike insurance protects you from the financial liabilities (bodily injuries, death, and/or property damage) that could arise when your two-wheeler is responsible for causing an accident.

Example: Raj was riding on the freeway at night in heavy rain, when suddenly, he lost control and hit a car in front of him. Fortunately, neither Raj nor the driver of the car suffered any injuries. However, there was considerable damage to the car.

The financial implications were bound to be hefty, but Raj was covered under third-party insurance. This meant that his insurance company would bear the liabilities, instead of Raj. So, in the above example, Raj, who is the policyholder, is the first party. The aggrieved car owner is the third-party, and Raj’s insurance company is the second party.

Mandatory by law: Under the Motor Vehicle Act, 1998, it is mandatory to have at least third-party insurance if you want to ride your two-wheeler on Indian roads. If you get caught riding without this mandatory cover, be prepared to pay a penalty of Rs 2,000 and/or face imprisonment of up to 3 months.

Now, if you continue to defy the law and ride again without at least getting a third-party insurance cover, you can be charged a penalty of Rs.4,000 for repeated offence and/or imprisonment of up to 3 months. If you don’t want that to happen, make sure you have at least this cover in place. On the PhonePe App, you can easily get third-party bike insurance, starting at just Rs. 1.5/day*.

What’s Covered Under Third-Party Bike Insurance?

Third-party bike insurance is designed to secure the policyholder from the legal liabilities that arise when his or her two-wheeler is at fault. The policy has you covered if, in an accident, your bike causes:

  • Injuries/disability/loss of life of third-party and
  • Damage to the property (this includes vehicle as well) of third-party

The maximum amount payable in both the scenarios is as under:

Injuries/disability / loss of life of third person — No upper limit (As per court settlement)

Property or vehicle damage to a third person — Up to Rs.1 lakh

What’s Not Covered Under Third-Party Bike Insurance?

If you are contemplating whether or not to get third-party bike insurance, you must also consider what’s not covered. This policy does not offer protection for:

  • Own Damage — If your two-wheeler, which is responsible for the accident, is also damaged, you will not receive any compensation under third-party bike insurance.

However, if you want damages to your vehicle to be covered as well, you can consider getting a comprehensive bike insurance policy as it will insure your two-wheeler. On the Phone App, you can easily find comprehensive bike insurance policies from trusted insurers in just a few taps! You benefit from being protected if any third-party liabilities arise and you get covered if your two-wheeler sustains any damages.

  • Damage or Loss due to natural disasters — In the wake of rising natural calamities, it’s not uncommon to hear about bikes getting swept away in floods or earthquakes causing trees and other structures to fall on vehicles. Unfortunately, a third-party insurance does not cover this, which means, you bear the brunt. A comprehensive two-wheeler policy is once again the solution here as it covers loss/damage to your two-wheeler.
  • Theft — Bike thefts are a common occurrence and unfortunately this is not covered under third-party insurance. A comprehensive bike insurance policy, on the other hand, will compensate you if your two-wheeler is not found. If you reside or work in an area where such incidents occur frequently, we recommend getting a comprehensive policy on the PhonePe App.

Third-party Bike Insurance Claim Process

All the vehicles plying on Indian roads would be equipped with two-wheeler insurance. The claim procedure to be followed would depend on the kind of policy you have and the loss/damage against which a claim is filed.

Scenario 1 — You are the victim:

If you suffer loss/damage on account of another person’s mistake on the road, then you are the third-party. Some of the steps you need to follow to receive compensation from the party at fault are as follows:

  • As soon as an accident occurs, contact the police right away to file an FIR and obtain a chargesheet. It must clearly detail the incident that took place and mention the parties involved. This FIR is mandatory when filing a third-party insurance claim.
  • Photographic evidence goes a long way in establishing your case. What this means is you should try and capture pictures of damage to your vehicle. Additionally, securely store any medical bills and/or files that list the injuries you sustained in the accident.
  • If there were witnesses to the accident, ask for their details. Should any disputes arise between you and the party at fault, the declaration by the witnesses can help make your case.
  • Ask for the insurance details of the insured bike involved in the mishap and intimate that insurance company.
  • You will have to approach a motor claims lawyer and file a case in the Motor Accident Claims Tribunal. A ruling would be delivered on the basis of all the documents and evidence submitted.
  • If the decision is in your favour, you will receive compensation from the other individual’s insurance company. The maximum amount that can be paid out in case of property damage is up to Rs.1 lakh. In case of injury or death, there is no limit to the compensation payable.

The above process applies when you are the victim and another party is at fault. Should your insured bike be responsible for the accident, then make sure to report the accident immediately to the police and your insurance company. Here’s what you must be if your insured vehicle has caused damage/loss to another party.

Scenario 2 — When your bike is at fault:

  • You (or the third-party) must lodge an FIR at the police station and get a charge sheet.
  • Share details of your bike insurance policy with the third party.
  • Take pictures of the damages caused by your bike in the accident. If there are any eye-witnesses of the accident, collect their contact details.
  • Notify your insurance company at the earliest. There is usually a time frame wherein you must inform the insurer about the accident. Failing to do so within that time period could result in the claim getting rejected.
  • Third-party claims are settled in the MACT.
  • The claim amount shall be paid out by the insurance company.

Note — Please refer to your policy document for the exact claim process relevant to your insurance company.

Why Buy Third-Party Bike Insurance?

If you are looking for the most basic form of insurance, then you can opt for third party bike insurance. Here are the advantages of having this policy:

  • Protection against legal liabilities — Any financial liability that arises because your bike is at fault gets taken care of by the insurance company.
  • Adhering to the law — Having a third-party bike insurance is mandatory if you want to take your two-wheeler out for a ride. Without it, you risk getting penalised if you are caught by the cops.
  • Affordable alternative — When compared with comprehensive bike insurance, the premium of third-party insurance is lower. The premium rates of third-party insurance is fixed by the IRDAI, and is based on the engine cubic capacity.
  • It’s easy to buy — On PhonePe, you can purchase a third-party bike insurance in minutes with no inspection. Additionally, you can avail this cover any time, as per your convenience.

How To Buy Third-Party Bike Insurance On PhonePe?

The process of purchasing third-party bike insurance on PhonePe is easy.

Step 1 — Open the PhonePe App

Step 2 — Tap ‘Bike’ under Insurance and enter details of your two wheeler

Step 3 — Choose ‘Third Party’ under Plan and select the plan of your choice

Step 4 — Enter the required details and proceed to buy the Plan

Your policy will be issued instantly. Please note, if you are renewing an expired insurance policy, the commencement of cover may take up to 72 hours.

Overall, opting for third-party bike insurance is a great choice if you only want protection against liabilities that could arise if your vehicle is at fault. For a more wholesome coverage, a comprehensive bike insurance will be the right choice since it covers any damages sustained to your vehicle, in addition to offering third-party cover. You can compare and select the right bike insurance cover for your vehicle on the PhonePe App. The process is easy and can be completed in just a few taps!

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