Comprehensive vs. Third-Party Bike Insurance: What’s the Difference?
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As exciting and thrilling as it is to get your hands on a new bike, it can be a bit tough to choose insurance policies for your vehicle. With so many choices out there in the market, this can be even more confusing and overwhelming. But what good is an insurance policy for a bike?
A regular health or life insurance policy protects you from bodily damage. Similarly, bike insurance will provide you with the financial immunity to handle bike accidents and bike thefts. This way, you don’t have to spend money out of your pocket for anything at all. An insurance policy will cover everything for you.
But bike insurance policies can be of either the comprehensive type or the third-party type. Which one to choose? Since the future benefits and limitations of both these insurance plans vary greatly, it is essential to understand the differences between bike insurance types before making a decision.
Key Differences Between Third-Party and Comprehensive Bike Insurance
As we know, bike insurance policies can be branched into two categories; Comprehensive plans and third-party plans. But these plans vary greatly in terms of features and the benefits offered. One is cheaper, but the other one offers better coverage. One is mandatorily required by the government, the other is not. Let’s talk about these differences in detail.
1. Coverage
Third-party policies, as the name says, are just meant to cover any harm or damage that is caused to third parties in a road accident that involves your bike. This means that if ever there happens to be an accident with your bike, any damage caused to any third person or their vehicle/property will be covered by this plan. But, this plan won’t cover your expenses or your damages. On the other hand, comprehensive insurance will cover both you and third parties.
2. Premiums
This is pretty obvious. Since a third party covers only third parties and a comprehensive policy covers both you and others, naturally, a third-party bike insurance plan will be cheaper than a comprehensive bike insurance plan. But that being said, a comprehensive plan also provides better and expanded coverage. This, even with higher premiums, a comprehensive plan can offer you complete peace of mind.
3. Legal Provisions
A third-party insurance plan has been made mandatory by law under the Motor Vehicles Act to protect victims of roadside accidents. Thus, if you don’t wish to spend a huge amount of money on a bike insurance plan and just want to meet legal requirements, it might be a good idea for you to invest in a third-party plan. On the contrary, a comprehensive plan isn’t mandatory by law but makes you immune to uncertainties like natural disasters and thefts.
Pros and Cons of Comprehensive Bike Insurance
To understand comprehensive bike insurance coverage properly, we must understand the perks that it promises and its faults too.
The Pros
A comprehensive plan normally has a wider coverage than a third plan. A third-party plan will only cover third-party persons or their vehicles if accidents happen. But a comprehensive plan will also take care of your financial needs and act as a safety net that you can fall back on. No matter if it’s a natural disaster or man-induced situations like accidents or thefts, this insurance policy will ensure that you are both covered and meet legal compliance.
Furthermore, it guarantees you flexibility for customisation. This means that you can also incorporate other add-ons into the plan like zero depreciation, engine protection and roadside assistance. All these aspects make such policies the most comprehensive ones out there.
The Cons
While a comprehensive plan might be a good idea for people who can afford it, it’s not exactly ideal for some others. If you have other financial plans or if the premiums of a comprehensive plan are out of your budget, this might not be so wise for you.
Again, if you just want to meet legal compliance and your bike is already too old and has a small market value, you might want to opt for a third-party plan. Finally, most comprehensive plans also come with exclusions and deductibles. As a policyholder, you must carefully assess these clauses first before deciding on investment.
Advantages and Disadvantages of Third-Party Bike Insurance
The Pros
A third-party plan can cover up all the disadvantages of a comprehensive plan. While a comprehensive plan might have great scope and coverage, it’s not budget-friendly. If you are from a middle-class background in India and want a cheaper alternative that helps you meet legal requirements too, this might be just the right plan for you.
The process for opting for a third-party plan is more straightforward and affordable than a comprehensive plan. You won’t even have to pay high premiums. It will help you spend less, be compliant and cover for any accident-related issue faced by a third party in an accident. This can include bodily harm, death, other fatal injuries or even property damage of a third person.
The Cons
The major default of this plan is that it’s got nothing in it for the policyholder. It won’t cover any of the financial obligations of a policyholder in the event of an accident. If you have a luxury or high-performance bike or if you are a frequent driver who is more prone to accidents, this plan might not provide you with the required comprehensiveness.
Understanding Bike Insurance Basics
Before going with any one of the above insurance policies, it is necessary that you clearly understand both. Third-party bike insurance benefits you as it is necessary to be compliant with the legal codes.
Moreover, if someone is found to be non-compliant, it might also lead to heavy fines or even imprisonment. Comprehensive plans can offer you both protection and compliance. But they come with higher premiums. Thus, when you choose between the plans, make sure to assess them carefully.
Additionally, both plans are renewed annually and failing to do so can result in the lapse of your insurance policy. You must also know that the premium rates are affected by several factors like the age and model of the vehicle and your location and claim history. Make a choice keeping these factors in mind.
Third-party bike insurance will only cover any damages or injuries to a third party. It doesn’t cover any damages to a policyholder.
Yes. It is mandatory according to the laws under the Motor Vehicle Act.
This is a more extensive option with a wider scope. It doesn’t only cover parties, it covers the policyholders too.
A comprehensive plan is expensive but promises better coverage. A third-party plan is cheaper and helps achieve compliance.
Author Bio
Paybima Team
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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