What is First, Second, and Third Party in Bike Insurance?

In this post, we will demystify the first, second, and third parties in bike insurance to shed light on their significance and implications to help you make an informed decision. Let us take them one by one.

What is ‘First-Party’ in bike insurance?

The first-party in bike insurance refers to the person who owns the bike or vehicle. First-party is the one who buys the insurance policy by paying a premium to the insurer. In return, they receive coverage under the policy against damages and losses in the event of an accident.

You may note that ‘first-party’ in bike insurance differs from a first-party bike insurance policy. A first-party vehicle insurance plan, also called an own damage (OD) plan, offers protection against damages caused to your own bike/vehicle. Under this coverage, a policyholder can have protection against fire, theft, man-made disasters, natural calamities, accidental damages, etc.

Thus, two parties are involved in first-party bike insurance. They are the policyholder (bike owner) and the insurance company (insurer). Now, in case of any accident resulting in damage to your bike, you are eligible to raise claims against the damages. The insurer will reimburse the claims as per the policy terms and conditions.

In simple words, if you buy a bike insurance plan to allow coverage to your own vehicle, you become the ‘first-party’, and the insurance policy is known as the first-party bike insurance or ‘Own-Damage’ insurance.

What is ‘Second-Party’ in bike insurance?

In bike insurance, ‘second-party’ means the insurance company or the party that offers the insurance coverage. Hence, the second party in bike insurance is the insurance company that compensates the insured or policyholder against the raised claims. Of course, the policy has to be active for the insured to raise claims and the insurer to compensate for the same.

What is ‘Third-Party’ in bike insurance? 

The ‘third-party’ in bike insurance refers to the person who is unrelated to the insurance policy. Hence, this person is neither the policyholder nor the insurance company. This can be an injured person whose vehicle/property is damaged or who has suffered losses because of your vehicle in an accident. In such cases, the third party can raise an insurance claim against your insured vehicle.

In India, it is compulsory to have third-party insurance coverage so that the liabilities of third parties can be taken care of. Under a third-party bike insurance policy, all three parties are involved, including the first, second, and third.

In the event of an accident, the policy allows the third-party person to raise a claim against the losses caused to the first party or vehicle owner and receive the compensation amount from the second party or the insurance company.

Such a policy is called the third-party liability insurance policy, and it also takes care of the legal liabilities in case of property damage of the third-party involved in the accident. The premium of 3rd party insurance for bike price in India varies depending on the insurance companies.