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A bike owner usually thinks of two-wheeler insurance as a formality. It is often perceived as an added cost instead of a financial cushion. Bikers might boast about their knowledge regarding tuning, maintaining, and beautifying their beloved two-wheelers but the same kind of interest is not expressed when it comes to the bike's insurance policy. This can be attributed to the complexities associated with the insurance industry at large. However, things are changing in today's digital era. Nowadays, it is easy to understand and purchase insurance thanks to the developments in the online world.
Getting the Basics Right
Whether you are purchasing or renewing bike insurance, you have two primary options - Third-party insurance and Comprehensive insurance. In insurance parlance, the insured person is the first party, the insurer is the second party and others (for example - pedestrians/other vehicles/property) are third party.
A third-party insurance policy is a low-priced option that covers financial losses in case of third-party damages caused by your bike. A Comprehensive plan includes the benefits of a third-party plan and also insures your bike in case of damages. However, it comes at a higher premium. Read ahead to know 7 advantages of two-wheeler third-party insurance.
1. Completing Legal Requirements
Purchasing at least a third-party two wheeler insurance policy is mandatory in India. This is a legal requirement as per The Motor Vehicles Act, 1988. Therefore, it is important to keep your two-wheeler's insurance policy active. This makes bike insurance renewal a crucial aspect of your bike riding routine. Failing to keep up with this legal requirement will get you in trouble with the authorities as riding a bike without an active insurance policy is a punishable offence.
2. Available at an affordable price
You don't have to shell out a huge amount from your pocket to insure your bike with a third-party policy. Its rates are considerably less as compared to a Comprehensive plan. Besides, these rates are stated by the Insurance Regulatory and Development Authority of India (IRDAI), which is the apex insurance body of the country. All insurers have to follow the mandate stated by IRDAI regarding third party insurance pricing. Insurers have the liberty to charge varying premium for a Comprehensive plan but not regarding a third-party policy.
3. Less complications involved
A third-party liability policy is a plain vanilla policy. Therefore, it doesn't have many complications. For instance, while purchasing a Comprehensive plan, you have to think about terms such as Insured Declared Value, No Claim Bonus, etc. This adds to the complications involved in arriving at an affordable insurance premium. Whereas in a third-party policy, the pricing is straightforward as it is based on the cubic capacity of your bike's engine.
4. Easy to buy
Insuring your bike was a tedious task few years ago. Earlier, one had to only follow the offline method but now, you can insure your bike easily using your smartphone! As mentioned above, third-party insurance buying process is not complex. There is no need to think about finding the right coverage, spend time comparing for the cheapest option, etc.
For example, you can visit a digital-first insurance company's website such as www.acko.com and insure your bike within minutes. All you have to do is enter basic bike-related details, select the plan, and make the payment. You can download your policy instantly once the payment is processed.
5. Personal Accident Cover
You get a 15 lakh Personal Accident Cover with a third-party liability policy. Recently, this cover was raised from Rs. 1 lakh to 15 lakhs. It is applicable in case the owner-driver faces permanent disability or death.
6. Long-term coverage
IRDAI has made long-term third-party liability policies compulsory for new bike owners. Such a policy shall be valid for five years. Thus, one doesn't have to worry about a lapsed policy for at least five years. A multi-year policy is also available during bike insurance renewal.
7. Peace of mind
Probably the biggest advantage associated with a third-party liability policy is peace of mind. You do not have to constantly worry about getting into legal tangles or compensating third parties in the unfortunate case of a bike accident. Your insurer will have your back.
Staying insured is in your own interest. Every biker must be covered at least under a third-party policy. However, if you want extensive coverage, you must opt for a Comprehensive plan.
A Comprehensive plan insures you against third-party liabilities, accidents (damage to insured bike and Personal Accident Cover), calamities, fire, and theft. You also have the option of choosing Add-on covers such as Roadside Assistance, Zero Depreciation, etc. while purchasing a Comprehensive plan. Such Add-ons cannot be purchased with a third-party liability policy.
You have to analyze your own requirements and decide if you want to opt for a basic third-party policy or a wide-ranging comprehensive plan.