What is Third-Party Insurance?
Third-party insurance is a policy under which the insurer agrees to indemnify the insured if he is held legally liable for injuries or damage is done to a third party or if the third party sues the policyholder.
A third party insurance meaning is quite confusing to many people. This includes everyone other than the insured and the insurer as per the Motor Vehicles Act, 1988. Under section 145(g) third-party includes the Government of India too. So it could be a person, another vehicle, or a passenger in a vehicle that qualifies for the subject mentioned in the insurance policy.
Like specific insurance policies are in place for specific coverage Third-Party insurance is an insurance policy that will cover only Third-party liabilities. This policy usually comes under motor vehicle policies where a person’s insurance company will be liable to pay for any damage to a third party’s vehicle, property or even death or physical injury because of the policy holder’s fault.
What is Third-party Insurance under Motor Insurance?
Third-party insurance under motor insurance is basic insurance coverage that is mandatory for every four-wheeler and every two-wheeler that a person might own. Motor insurance is compulsory as per law under the motor vehicles act. In that, the third-party cover is a must-have for all vehicles including two-wheelers.
As mentioned above it covers the third-party liabilities if the policyholder is at fault. The main coverage includes
- Damage to a third party’s vehicle
- Damages made to a third-party property
- Bodily injuries of a third-party
- Death of the third-party
What Is Third-Party Insurance For Bike?
As the name implies, third-party insurance for a bike is an insurance policy that covers the third-party liability that arises from any harm or loss, or damage done to any third party by your bike. The policyholder will face financial liability for the damage or loss caused to a third party and this liability will be covered by the insurance company that provides you with the two-wheeler third-party insurance.
By purchasing third-party insurance for your bike you are obeying the law that has made this policy mandatory for every bike/scooter owner. The personal accident cover is also compulsory and is added to the bike’s third-party insurance policy.
Let us look at how the coverage is offered under third-party insurance for bikes.
- There is no specific coverage amount for physical injuries or death.
- If your bike causes property damage the coverage amount is mentioned as Rs. 7.5 Lakhs. Anything over that amount will have to be paid by the insured.
- The personal accident coverage gives Rs.15 Lakhs in case of death or permanent disability for the policyholder due to an unfortunate event while driving his two-wheeler.
- When it comes to permanent disability for the policyholder 25% or 75% of the total sum insured will be paid as the claim settlement depending on the severity of the disability.
As much as the inclusions on the two-wheeler insurance policy there are many exclusions as well that the policyholder needs to be aware of.
Find what is not covered:
- Damages done to a third party or personal accident due to any man-made or natural causes.
- No cover for the damages caused if the bike was being driven without a proper driving license
- If the damage was caused while driving a bike under the influence of drugs or alcohol.
- If the bike was driven outside India and damage was caused to a third party
- If the bike was used against the normal usage limitations.
Third-party cover for five years for new two-wheeler owners
The Government of India has made it mandatory for all new bike owners to purchase the compulsory five-year insurance policy as it is more economical and people. But this five-year policy is available to offer cover only for damages caused for third parties. No cover will be provided for the bike owner or his vehicle. Any change in policy benefits or any conditions and terms will be notified by the insurance company.
The main reason for introducing a long-term, five-year insurance policy is to make sure people have their third-party insurance with them all the time as the majority of people forget to renew their insurance policies on time. Also, the policyholders can avoid the annual rise in the premiums as it is set for five years unchanged unless the company informs of any. The premium rates differ from bike to bike concerning the vehicle’s cc.
Third-party Bike Insurance Online
Third-party bike insurance can be bought online as well as offline. But when you want the process to be in the comfort of your home and to keep it hassle-free without a third person’s involvement, buying it online is the best option. It saves your time and offers you a convenient purchase. You have to visit the desired insurance company website which offers a two-wheeler third-party cover and select or compare plans and then buy it according to your needs.
In the same way, the renewal of the insurance policy also can be made in the comfort of your home or office. You would have to visit the insurer’s website and enter the required details for which you need to keep your policy documents handy and then select plans and pay the premium as per your convenient mode of payment. Once that is done you will receive the confirmation of renewal in your registered email. And you may keep the new policy documents with you for any future references.
Top Companies Offering Third Party Bike Insurance In India
Some top insurance companies provide third-party insurance covers for bike owners at affordable premiums and very good reports of claim settlement ratios.
| Name of the Two-Wheeler Third party Insurance Company | Premium starting amount | Claim Settlement Ratio |
| Bajaj Allianz Bike Insurance | Rs. 843/- year also Depends on the cc of the bike and as per the insurance company terms | 88.83% |
| Digit Bike Insurance | Rs. 752/ year also Depends on the cc of the bike and as per the insurance company terms | 80.47% |
| Edelweiss General Bike Insurance | Rs. 482/year Depends on the cc of the bike and as per the insurance company terms | 84.52% |
| Future Generali Bike Insurance | Rs.482/year but also depends on the make and model of the bike as per company terms. | 88.70% |
| Kotak General Bike Insurance | Depends on the cc of the bike and as per the insurance company terms | 82.81% |
| SBI General Bike Insurance | Depends on the cc of the bike and as per the insurance company terms | 89.51% |
| Tata AIG Bike Insurance | Depends on the cc of the bike and as per the insurance company terms | 90.49% |
| United India Bike Insurance | Depends on the cc of the bike and as per the insurance company terms | 82.93% |
| Cholamandalam Bike Insurance | Depends on the cc of the bike and as per the insurance company terms | 85.89% |
Claim Settlement Procedures In Third-Party Bike Insurance
The claim settlement process is quite a bit of a process when it comes to third-party two-wheeler insurance. But as per the law, it is mandatory to have insurance in place and with the help of the respective insurance company the policyholder will get a hassle-free claim settlement in most cases.
The claim settlement is different if the policyholder gets hit or damaged by a third party. So there are two types of settlements.
Claim settlement if the damage is from your side
- First, most notify the police helpline number about the accident
- Click pictures of vehicles and accident spots for evidence
- Get the contact details of the third party person who got his vehicle damaged by you.
- Find any people who might have seen the accident and take their contact details.
- Intimate your bike insurance company at the earliest and submit all the details and documents to them.
- You have to register a case at the Motor Accidents Claims Tribunal in your area.
- Keep proofs and copies of all emails or messages or call proofs to avoid any future issues.
- The claim will be settled as early as possible at the insurance company’s best efforts. If the payment is less from the insurer’s side then you might have to pay the remaining amount to the third party as the settlement money is subject to terms and conditions.
Claim settlement if your vehicle gets damaged by the third party
In this case, the process is all similar to an extent. But after you file a case at the Motor Accidents Claims Tribunal in your city you will get a date of hearing. On that day you have to prove that your bike was damaged by a third party’s vehicle and you should provide relevant evidence and any proof you have collected at the accident spot.
Once the court announces the decision and if it comes in your favour then the insurance company of the third party person will be liable to pay compensation to you being the victim in this case.
Common FAQs
- Who are the first party and second party in the third party two-wheeler insurance policy?
The policyholder and the insurance company play the role of the first party and second party and anyone or anything outside that will fall into the category of the third party.
- Someone else was riding my bike and the accident happened. Will my insurance company cover the damages/losses caused to a third party?
Provided you had permitted the driver to ride the bike and only if the person was not under any influence of alcohol or drugs the insurance company will provide the compensation.
- Can I cancel my third-party bike insurance if I feel unsatisfied with my existing policy cover?
Yes of course you can cancel the existing policy if you feel it does not meet your needs. But always make sure you get an alternative cover for the same purpose as it is mandatory insurance as per law in India. You may then cancel the old one. Make sure you have not made any claim during the policy term and are not liable towards the insurance company in any circumstances.