There are two types of two wheeler insurance policy:
- Third Party Liability Insurance or Liability Cover only
- Comprehensive Policy or Package Policy
Third Party Liability Insurance
Third party liability insurance is mandatory in India as per the law. This policy covers only the damages or loss caused by the insured bike to the third party or property. It also provides personal accident cover for the bike owner. However, none of the insurers will cover for any loss, damages incurred or theft of the insured bike.
To protect your two wheeler completely, you must opt for a comprehensive two wheeler insurance policy. Because it provides a complete financial protection against bike own damages and also any third party loss or damages caused due to the insured vehicle. You don’t have to worry, if your two wheeler gets stolen, as a comprehensive policy also covers bike theft.
Two Wheeler Third Party Liability or Liability Cover
This is a third party policy that covers any legal liability cover, which may be caused by the insured bike. A third party bike insurance provides financial protection to you in case of damages or injuries caused by your two wheeler to another person or their property. It is the basic and mandatory bike insurance policy as per the Motor Vehicles Act, 1988.
Coverage of Two Wheeler Liability Cover Only are:
Third party Liability: Unlimited Liability cover in case of death or bodily injury to a third party.
Third party property damage: Covers damage to third party property up to Rs.7.5 lakh.
Personal Accident Cover in Bike Insurance: A third-party policy covers a compulsory owner-driver, and offers an optional pillion rider cover.
- Owner-Driver Personal Accident Cover: A Sum Insured of Rs.1 lakh for the owner-driver in case of a permanent total disability or an accidental death on a premium of Rs.50.
- Optional Pillion Rider Accident cover: Pillion rider personal accident cover up to the sum insured of Rs.1 lakh is available on paying an additional premium.
Personal Accident Cover Table:
|Accidental Event||% of Sum Insured|
|Dismemberment of both limbs or loss of sight of both eyes or one limb and one eye||100%|
|Dismemberment of one limb or loss of sight of one eye||50%|
|Permanent and Total Disability||100%|
Exclusions of Liability Cover Only
- Own Damage of your two wheeler is not covered. Any damage incurred to the insured bike due to an accident is not covered. The policyholder will have to pay the repair cost.
- Accidental damage/loss/liability borne outside the prescribed geographical area.
- Claims arising out of any contractual liability.
- Accidental loss/damage incurred by the third party that might have resulted from a consequential loss.
- Loss, damage, liability caused due to war, invasion and other warlike operations.
- Any liability caused due to radioactive contamination or nuclear weapons.
Two Wheeler Comprehensive Insurance
This policy provides complete financial protection against bike own damages and also any third party loss or damages caused due to the insured vehicle. You don’t have to worry if your two wheeler gets stolen, as a comprehensive policy also covers bike theft. Coverage of Two Wheeler Comprehensive Policy are:
- Own Damage
- Third-party cover
- Third-party liability cover
- Third-party property damage cover
- Personal Accident Cover (Personal Accidental Cover for the owner-rider & Optional Pillion Rider Cover)
Damages caused by,
- Fire, explosion, self-ignition or lightning
- Earthquake, flood, typhoon, hurricane, storm, tempest, inundation
- Cyclone, hailstorm, frost, landslide, rockslide
- Burglary, theft, riot, strike, malicious act
- Accident by external means, terrorist activity
- Any damage in transit by road, rail, inland waterway, lift, elevator or air
Exclusions of Two Wheeler Comprehensive Cover:
- Any damages incurred when the policy is not active or expired
- Any mechanical wear and tear due to aging
- Any mechanical or electrical breakdown
- Riding without legal and valid license
- Riding under the influence of alcohol, drugs or any intoxicants
- Using private two wheelers for commercial purposes
Difference between Two Wheeler Liability Cover and Comprehensive Insurance
Let us see an example to understand the difference between a liability cover and comprehensive cover.
Amit and Sanjay bought a new Honda CB Unicorn self-start 150cc bike in Jan’17. The on-road price in Mumbai is Rs. 80,000. Amit insured bike with only a Third-party cover. Third-party premiums is on the basis of Engine CC, so the premium is Rs. 770. While Sanjay bought a Comprehensive policy (covers own damage + third party liability cover), which cost him Rs. 1,200.
In the month of June, both met with a minor accident and the total repair cost turned out to be Rs. 6,000 (approx.). Because Amit had bought only third party policy, the whole repair cost incurred will be borne by him. The insurance company will pay only third party property damage cost. Nothing for any damages incurred on the bike. Since, Sanjay had bought a comprehensive policy, the insurance company will pay the repair cost (after deduction for the depreciable parts cost) on behalf of him.
|Premium Paid||Rs.770/- (only third-party)||Rs.1,200(Comprehensive)|
|Third-party||Paid by the insurance company||Paid by the insurance company|
|Own- Damage Repair Cost Rs.6,000/-||Not paid by the insurance company||Paid by the insurance company|
|Total Money Invested||Rs.770 + Rs.6,000||Rs.1,200|
|Net Savings (Rs.)||0/-||More than approx. Rs.3,000|
Total Money paid by Amit is Rs. 6,770, whereas Sanjay paid Rs. 1,200. On face value, Amit saved money on the premiums paid. However, he had to face a huge loss that came along with the bike damage. The total loss borne by Amit is of Rs.6,770.
Note: All the prices are indicative and are subject to change.
The Coverage Difference Table between Comprehensive and Third Party Liability Cover
|Coverage||Comprehensive Policy||Third Party Policy only|
|Third Party Liability||Covered||Covered|
|Third Party Property Damage||Covered||Covered|
|Personal Accident Cover||Covered||Covered|
|Own Damage||Covered||Not Covered|
|Vehicle Theft||Covered||Not Covered|