Is Third-Party Insurance Enough for Bikes?

Is third-party insurance enough for bikes?

When buying a bike, there is one thing that cannot be overlooked and that is insurance. In India, bike insurance is mandatory, but the question often arises: third-party insurance for bikes? Third-party insurance is the compulsory type of insurance but does this serve the interests of the bike owners? Is third-party insurance enough for bikes?

This blog post will look at the advantages and disadvantages of third-party insurance, question if it is enough and give two real-life examples as to why it is crucial to make the right decision.

What is Third-Party Bike Insurance?

Now let’s look at the details of third-party insurance and then we will discuss if it is enough for bikes or not. Third-party insurance is a form of policy that offers its client coverage in the event of a legal claim for damages against the policyholder caused by accident. This third party could be the other car, the other property or another person.

So is third-party insurance enough for bikes? The third-party insurance cover is useful in the event of an accident where you are the one to blame; it will help to cater for the medical bills of the third party, the property damages or any other expenses that may arise from the accident. However, it does not include damage to your bike or the cost of treatment in case of an accident you have with another person’s bike.

What is Third Party Insurance and What does it Include?

Is third-party insurance enough for bikes? Third-party insurance for bikes covers:

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• Third-Party Property Damage: If your bike damages someone’s property, for instance, a bike, a building or a fence, then the insurance company will have to cater for the expenses up to a given extent.
• Bodily Injury or Death of Third Party: In the event of an accident where you are at fault and leads to the death or harm of the third party, then the insurance will cater for his or her hospital bills or compensation.
• Legal Liabilities: If the accident results in a legal procedure, the insurance will pay for your legal costs and any amount that you are expected to pay to the other party.

To know if third-party insurance is sufficient for bikes, it is equally important to know what third party insurance does not include. Third-party insurance, like any other insurance, has certain exemptions and these are as follows:

• Damage to Your Bike: Accident, theft or natural disasters are unfortunate occurrences that could lead to the damage of your bike; third-party insurance will not help to offset the costs of repairing or replacing the damaged property.
• Personal Injuries: In the event of an accident, the third-party insurance does not cater for your medical bills or compensate for the wages you lose while undergoing treatment.
• Loss Due to Theft: Third-party insurance does not include the theft of the bike or damages done to the bike.
• Natural Disasters or Fire: Nothing that happens due to fire, floods, earthquakes or other calamities is paid for.

Considering these constraints, one has to ask if third-party insurance is enough for bikes, as it does not include such important covers.

The Legal Perspective: This blog aims to answer the following question: why is third-party insurance compulsory?

In India, the Motor Vehicles Act enforces third-party compensation for all the vehicles, including bikes. The aim of this is to make sure that the victims of the accidents are compensated, whether the other person involved is rich or not. Third-party insurance is useful due to the high rates of traffic accidents in India, as it ensures that the affected parties do not have to wait long to be compensated.

However, the question that arises is whether third-party insurance is sufficient for bikes to safeguard your interest as a rider.

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Are Third Party Policies Sufficient for Bikes?

Now, let’s address the central question: what about other bike owners? Is third-party insurance enough for bikes? As far as the third-party insurance is concerned, it satisfies the legal aspect and offers coverage for the third-party claims and liabilities but it lacks in several areas, which makes the bike owner exposed to a higher financial risk.

Here are several reasons why third-party insurance alone may not be enough for bike owners:

• No Coverage for Bike Damages: Third-party insurance does not include repair or replacement of your bike in the event of an accident or a natural disaster and thus you may have to incur huge costs to replace your bike.

• Lack of Personal Accident Coverage: This can lead to a lot of financial costs, such as one’s medical bills, loss of income and sometimes even disability. This, therefore, means that without personal accident cover, the third-party cover provisions will not provide for such expenses.
• Risk of Bike Theft: Bike theft is on the rise and with third-party insurance, you won’t be compensated if your bike gets stolen. This is a big disadvantage, especially for the bike users in the urban centers, given that the threat of bike theft is high.
• Additional Expenses for Legal Fees: Third-party insurance is an insurance that provides coverage for legal liabilities for any third-party claims; however, it may not offer legal costs in the event of a complicated case.

Third-Party Insurance vs. Comprehensive Insurance

Based on such restrictions, third-party insurance is not enough for those riders who aim to get full coverage. To make the difference between comprehensive and third-party two-wheeler insurance clearer, let’s consider two examples.

For instance, the first example is Rahul’s Experience with Third-Party Insurance.

Rahul, a 26-year-old young software engineer, purchased a new bike last year. In a bid to reduce expenses, he decided to take third party insurance, believing that since he is careful while riding, he would not require extensive coverage. For several months, there were no complications. But one day, while returning from work, Rahul met with a small accident. He accidently collided with another bike and this led to damage to the front wheel and the frame. Fortunately, there was no one who got hurt.

When Rahul communicated with the insurance company that he had taken the third-party insurance policy, he was surprised to know that the insurance policy did not cover the damages of his bike but only the damages of the third-party vehicle. Therefore, the repairing work had to be done by Rahul out of his own money and the cost incurred was ₹15,000. It soon came to his realization that the third-party insurance cover was not enough and he needed to have comprehensive insurance coverage for his bike.

This example shows that although third-party insurance is legal, it still presents bike owners with a large financial liability. Is third-party insurance enough for bikes in Rahul’s case? Clearly, it isn’t.

The second example is that of Anita, who had to deal with the comprehensive insurance. 

Anita, on the other hand, had a different strategy. She decided to take an insurance policy for her bike, which was more costly than a third-party insurance policy. Six months later, Anita lost her bike, which was parked outside her house to our building. She went to the police and lodged a complaint of theft and also made a claim to her insurance company.

This is because her insurance policy was an all-inclusive policy that entailed for theft and thus the insurance company was forced to compensate her according to the market price of the bike.

For instance, when Anita’s bike was stolen, the comprehensive insurance policy offered her the necessary financial security, while third-party insurance would not have provided her with any form of compensation in this case. Hence, when comparing whether third-party insurance is enough for bikes, Anita’s story illustrates the benefit of having the comprehensive plan.

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Comprehensive Insurance: Why It Is Best for You

Whereas third-party insurance has limited coverage, comprehensive insurance has a number of coverages, which makes it ideal for the rider who wants to be well protected. Here’s what comprehensive insurance covers.

• Own Damage Coverage: Comprehensive insurance is one that covers damages that occur to your bike due to an accident, natural calamities or even fire. This way, you will not be required to incur the costs of repair or replacement of any part of the system.
• Personal Accident Cover: Some general policies have personal accident insurance, which pays your medical bills or helps you with your wages if you get injured in an accident.
• Theft Protection: The comprehensive insurance covers for theft of the bike, which means that in case the bike is stolen, you will be reimbursed.
• Third-Party Liability: Besides, the comprehensive insurance also has the provision of third party liability as in the third-party insurance.
• Optional Add-ons: Comprehensive insurance gives you the opportunity to choose from a number of optional covers, including zero-depreciation cover, roadside assistance, engine protection and many others.

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Conclusion: Is Third-Party Insurance Enough For Bikes?

However, because third-party insurance meets the legal and minimum requirements and provides coverage for third-party claims and liabilities, the bike owner is exposed to various core risks like theft of the bike, own damage and bodily injuries. Today, accidents and theft are widespread, and, therefore, placing all one’s eggs in the third-party insurance basket is not the best course of action.

With a new comprehensive insurance policy, bike owners get enhanced coverage on their own damage, personal accidents, and theft. Comprehensive insurance is not only about having no worries but it also guarantees that you will be financially covered in one way or another.

Hence, the answer to the question, is third-party insurance enough for bikes? Though it may suffice in terms of legal requirements, it cannot be said to be sufficient in terms of risk coverage. It is important that the rider take his or her time to determine the risks and requirements before selecting the kind of insurance to go with.

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