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In India, it is mandatory to get bike insurance before riding the vehicle on the road. When it comes to motor bike insurance, there are two types of policies available – first-party insurance and third-party insurance. It is essential to know the importance of both and the differences between the two types of plans before deciding to buy your bike insurance policy.
First party insurance refers to a type of bike insurance plan wherein only two parties are involved – the policyholder or the insured and the insurance company or the insurer.
This means that in case of any damage or harm to the bike under any event, the insured is entitled to raise a claim directly with the insurer for cost coverage of damages. Moreover, the cost coverage provided under first party bike insurance plans is generally better than the other plans, offering comprehensive coverage to the insured for any harm or damage caused to the vehicle. These may include damage to the bike in the event of a natural calamity, fire, theft, and the like.
This means that whether there has been damage to the bike due to natural disasters or man-made (accidents, theft, etc.), with first party bike insurance, you can easily expect to receive claims for all costs incurred on repairs involved therein.
This policy is different from 1st party insurance such that it involves not just the two parties (insurer and the insured) but also another third party. In this case, if the insured or the policyholder is involved in any case with another third party (individual) wherein the latter has suffered damages either directly or to a property due to any fault of the insured, third-party bike insurance would cover all legal liabilities for the insured.
For instance, a policyholder buys 3rd party bike insurance and at one instance, gets involved in an accident case with another individual or third party. The third party accuses the insured of causing damage to the property of the 3rd party or harm/injury to the third party during the accident. In this event, the third-party bike insurance purchased by the policyholder would help cover all costs involved in any legal case that may be filed by the third party in this case.
This explains why this insurance policy is called third-party bike insurance because it is meant to provide coverage for costs incurred on repair of damages only to a person or property belonging to the third party. This also means that even if the bike of the insured suffered damages in the process, he/she would not be able to claim costs under the third-party insurance, which would only cover costs for all liabilities arising from third-party damages.
We already discussed the meaning of both first-party and third-party bike insurance above. Now let’s look at the key differences between the two insurance plans to help you make an informed choice:
|Parameters||First Party Bike Insurance||Third Party Bike Insurance|
|Bike Value||In case of new, first-hand, or expensive bike model, first-party insurance is more effective in recovering damage costs||If the bike is old or its value has depleted, third-party insurance is more beneficial to cover complete cost of damage and regular maintenance|
|Insurance Coverage||Limited cover; only for damage to own bike owing to natural or man-made disasters||Covers only damages caused to third-party person or property; the insured cannot claim for damage to own bike|
|Premium Payable||First-Party bike insurance premium rates are generally higher on account of maximum risks covered for the owner||Premium for third-party bike insurance is comparatively lesser|
|Add-on Covers||More add-on cover options offered to the policyholder||Limited add-on benefits; only personal accident cover add-on available to the insured|
|Claims||Direct claim-filing possible by the insured with the insurer||Claims can only be filed by the third party|
In India, every bike owner is mandated to purchase third-party bike insurance cover along with the bike. On the contrary, first-party insurance is not compulsory to buy. However, the latter is always more preferred over third-party bike insurance. Here’s why.
As we learned above, the third-party insurance provides coverage only to the third party for any damage caused to person or property during an accident. In this case, the policyholder or insured is not allowed to raise a claim against any damages caused in the same incident (involving their bike). In other words, third-party insurance, though mandatory, has only limited coverage.
First party bike insurance, on the other hand, is more comprehensive in terms of coverage, providing protection to the bike-owner/policyholder for any damage caused to the vehicle. In the case of two wheelers, it can never be denied that risks are inevitable. Accidents can happen anywhere. In case of an accidental damage to self or bike, the policyholder would remain deprived of bike insurance coverage only with third-party insurance. But with the first-party insurance benefit, all risks to the owner are covered as it provides all-round cost coverage.
With everything getting digitized in the current era, the best way to buy all kinds of insurance is online. Buying bike insurance online is quite comfortable and hassle-free. Moreover, upon expiry of the policy term, bike insurance renewal is an equally easy and smooth process which can be carried out online in just a few clicks.
You can visit PayBima for all your bike insurance needs, such as knowing the process for bike insurance renewal online and finding the bike insurance price. Some of the best discounted deals on insurance of motorbike are available on PayBima to suit all requirements and budgets.
Browse Mahindra PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance, and Investment section. You can visit Mahindra PayBima to Buy Insurance Online.
First party insurance protects the insured bike from a wide range of unforeseeable mishaps, including theft, accident, fire, etc. It is also referred to as the own damage (OD) cover for this reason. On the other hand, third-party insurance coverage covers the losses, injuries, damages, and fatalities to third-party people and property.
In the event of an accident, first party insurance pays for the policyholder's two-wheeler's repairs. As a result, your car is protected in the event of natural disasters like fire or flooding. Accidental or theft-related damage is also covered by the first party insurance.
First-party insurance provides benefits for the insured car, its owner, and, if applicable, a third party. Only third-party property or person damages, injuries, or fatalities are covered by third-party insurance policies.
As long as the customer has active third party insurance, only first party bike insurance coverage is available. Most insurance companies would not offer first party insurance without an active third party insurance policy.
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.
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