Comprehensive vs Third-Party Two-Wheeler Insurance

Before diving into the specifics of third-party and comprehensive bike insurance, it is essential to understand the landscape of two-wheeler insurance in India.

The Motor Vehicles Act mandates that every vehicle on the road must be insured with a basic third-party cover. As mentioned, in India, bike insurance comes in three primary forms:

Third-Party Bike Insurance: This is the most basic form of insurance and is mandatory by law. It covers damages or injuries caused to a third party, including their vehicle or property, by your two-wheeler.

Standalone Own-Damage Insurance for Bike: This type of insurance covers damages to your own vehicle but excludes coverage for third-party liabilities. It can be purchased separately or in addition to a third-party insurance policy.

Comprehensive Bike Insurance: Also known as Package Policy, this type of insurance provides coverage for both third-party liabilities and damages to your own vehicle. It offers more extensive and holistic protection compared to third-party insurance.

Comparing comprehensive insurance vs third-party insurance for two-wheelers is crucial for two-wheeler owners to make an informed decision about the level of coverage they want for their vehicles.

Third-Party Bike Insurance Meaning

Third-party two-wheeler insurance, as mandated by law, covers the damages or injuries caused to a third party by your vehicle. It is the minimum legal requirement for two-wheeler owners in India. The third party can be an individual, another vehicle, or property.

This insurance provides coverage for bodily injuries, death, or property damage caused to a third party due to your two-wheeler.

It is compulsory per the Motor Vehicles Act for every two-wheeler to have third-party insurance.

Third-Party Bike Insurance Exclusions

The third-party insurance does not cover the expenses incurred to repair damage to the owner's vehicle. Additionally, personal accident coverage and the choice of add-ons are not available with third-party bike insurance.

Third-Party Bike Insurance Cost

The premium for third-party insurance is more affordable than comprehensive insurance because it offers limited coverage.

The Insurance Regulatory and Development Authority of India (IRDAI) declares the third-party motor insurance premium rates annually. The premiums are based on the engine’s cubic capacity.

Third-Party Bike Insurance Benefits

Legal Compliance: It fulfils the legal requirement for owning and riding a two-wheeler.

Affordability: It is a cost-effective option for individuals looking for basic coverage.

Third-Party Bike Insurance Disadvantages

Limited Coverage: It only covers damages to the third party and does not include damages to your own vehicle.

Incomplete Protection: In the event of an accident where your vehicle is damaged, you would need to bear the repair costs.

Comprehensive Bike Insurance Meaning

Comprehensive two-wheeler insurance provides extensive coverage compared to third-party insurance.

It not only covers third-party liabilities but also includes damages to your own vehicle due to accidents, natural calamities, theft, and more. You can also opt for a personal accident cover for the owner-driver up to ₹15 lakhs.

Further, comprehensive bike insurance allows for the inclusion of add-ons such as zero depreciation cover, roadside assistance, and more.

Comprehensive Bike Insurance Exclusions

Even if the comprehensive insurance policy covers most of the risk borne by the owner, it misses out on expenses to cover the loss for depreciation, expenses for services, and charges to cover losses due to the owner’s mistake. These mistakes include:

Driving under the influence of alcohol or after the consumption of drugs.

Driving without a valid licence

Driving a vehicle without proper ownership.

Travelling as a pillion rider behind someone else.

Damage due to negligence

Damage due to speeding, racing and other illegal activities

Comprehensive Bike Insurance Cost

Comprehensive insurance is relatively more expensive than third-party insurance due to the broader coverage it offers.

The premium for a comprehensive bike insurance plan is determined by individual insurers based on a few factors, including:

Insured Declared Value

Make and Model of the two-wheeler

Age of the vehicle

Geographical location of the registration

Add-ons selected with the plan

Deductibles, if any

You can use an online bike insurance calculator to determine the cost of your comprehensive bike insurance.

Benefits of Comprehensive Bike Insurance

Complete Protection: It provides all-encompassing coverage under a single plan.

Add-On Options: The flexibility to choose additional coverages based on individual needs helps you ensure targeted protection for your vehicle.

Comprehensive Bike Insurance Disadvantages

Higher Premiums: The premium for comprehensive insurance is higher than third-party insurance.

Complicated: The extensive range of coverage, choice of add-ons and dynamic premiums might get confusing for new buyers.

Now that we have seen the benefits of bike insurance, let us compare third-party and comprehensive two-wheeler insurance in the following table:

The decision between third-party and comprehensive insurance depends on individual preferences, budget considerations and the level of coverage desired.

Let us look at the following example for a better understanding:

Mr Ajay had an accident in November 2023 in which his bike stopped working. He sent his bike for repair and incurred an expense of ₹10,000. In this accident, he crashed into the car of Mr. Sujay and the car needed repairs as well. Mr Sujay repaired his car for ₹5000.

Mr Sujay asked Mr Ajay to recover these expenses.

Can Mr. Ajay claim these expenses from his bike insurance?

The answer to these questions depends on the type of insurance policy that Mr. Ajay owns.

If Mr Ajay owns a third-party insurance policy, he can recover only ₹5,000 as third-party insurance covers only the liability incurred to cover losses paid to a third person. If Mr Ajay owns a comprehensive policy, he can claim the total expenses of ₹15,000.

What is the verdict?

If adhering to a tight budget is a primary concern and you are willing to take the risk of covering your own damages, third-party insurance might be suitable. Third-party bike insurance is also suitable for older vehicles which are not used regularly. A majority of insurers do not insure extremely old vehicles.

However, for those who seek complete protection and are willing to pay a higher premium for peace of mind, comprehensive insurance is the better option. Additionally, with bike insurance riders, owner-drivers can offer more targeted coverage.

It is important to note that while comprehensive insurance is not legally mandated, it is highly recommended for a more holistic and secure coverage.

Choosing the right insurance provider is as crucial as deciding on the type of insurance coverage.

Tata AIG stands out as a reliable and customer-centric insurance provider for two-wheelers.

Here are some reasons to consider a Tata AIG two-wheeler insurance policy:

Comprehensive Coverage: Tata AIG offers comprehensive coverage, ensuring that you are protected against various risks, including third-party liabilities and damages to your own vehicle.

Customisable Add-Ons: The flexibility to choose from seven add-ons allows you to tailor the insurance policy according to your specific needs and preferences.

Quick Claim Settlement: Tata AIG is known for its efficient and hassle-free claim settlement process, providing timely assistance when you need it the most.

Network of Garages: The insurance provider has 7500+ network garages in India, making it convenient for policyholders to get repairs done at preferred locations.

Customer Support: Tata AIG is committed to delivering excellent customer service with 24x7 support, ensuring that you have a smooth experience.

Moreover, if you are looking to get an extended period facility, you can check for our long-term two-wheeler insurance. With a long-term policy, you can eliminate the hassles of yearly renewal and save on your administrative costs while getting insurance coverage for up to 3 years.

When buying two-wheeler insurance in India, the choice between third-party and comprehensive insurance is a critical decision that every owner must make. While third-party bike insurance fulfils the legal requirement at a lower cost, comprehensive bike insurance provides a more holistic and complete coverage.

When deciding between the two, it is essential to consider individual preferences, budget constraints and the level of protection required. Additionally, selecting a reputable insurance provider, such as Tata AIG, can enhance the overall insurance experience by ensuring prompt and efficient assistance in times of need.

Ultimately, a well-informed decision regarding two-wheeler insurance can contribute to secure and worry-free riding.