What is First, Second, and Third Party in Bike Insurance?
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The thrill of purchasing your first bike is exhilarating. However, before the engine roars and you begin your journey to the open roads that await, do acquaint yourself with the bike insurance-related jargon. Especially while buying the bike insurance plan online, you should be clear about who is a first, a second, or a third party in insurance. This is dissimilar to the first-party or third-party bike insurance policies offered by insurance companies in India.
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.
1st, 2nd, and 3rd Party in Bike Insurance
No, it is mandatory for a vehicle owner to have third-party bike insurance in India. Riding a bike without third-party bike insurance may levy a heavy fine on the rider or may get the rider imprisoned for 6 months.
The premium of first-party bike insurance might vary from policy to policy, depending on the insurance company. Use a bike insurance calculator available online to calculate the premium amount to be paid for first-party bike insurance.
First-party bike insurance covers the insured against numerous unforeseen events or incidents such as fire, theft, accident, etc. Hence, it is called OD or own damage cover. On the other hand, third-party insurance covers the damages, injuries, or losses caused to third parties. It also covers the death of third parties by paying compensation to the family of the deceased.
The term 'first party' in bike insurance refers to the person who buys the insurance policy or owns the vehicle.
Yes, as per law, you can ride your bike if you have a third-party insurance policy. In fact, riding a vehicle without this policy can lead you to trouble.
Yes, if you want to comply with motor vehicle laws, having a third-party insurance policy is enough for you.
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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