When purchasing bike insurance online, adequate research, planning, and understanding of the various associated terms are essential to make an informed decision. Therefore, it is important to familiarise yourself with some basic terms related to bike insurance.
One of the most important terms you must understand is the difference between first, second, and third-party insurance. Understanding these terms associated with the insurance for 2-wheelers is essential to ensure you select the correct type of coverage for your bike. Let us go through these words in-depth for a simple understanding.
What Is Bike Insurance First Party?
Regarding bike insurance, the word ‘first party’ typically refers to the person who purchases the insurance policy. The first party is responsible for paying the insurance premium to be eligible for benefits and compensation under the policy.
However, the term ‘first-party bike insurance’ specifically refers to the insurance policy for bikes that provides comprehensive coverage for any damages incurred by your bike. This type of insurance typically includes protection against accidents, natural disasters, fires, theft, and total loss.
With first-party bike insurance, two parties are involved: you (the insured) and the insurance provider. If you need to make a claim, the insurer will provide compensation according to the terms and conditions outlined in your policy.
What Is Bike Insurance Second Party?
The term ‘second party’ typically refers to the party offering 2-wheeler insurance online/offline. It would usually be the insurance company. While the first party is responsible for paying the insurance premium, the insurer (the second party) compensates the policyholder in the event of a claim.
It’s worth noting, however, that there is no such thing as ‘second-party bike insurance.’ Instead, this term refers to the insurance company as the second party in the contract.
What Is Bike Insurance Third Party?
The term ‘third party’ refers to someone other than the policyholder (first party) or the insurance company (second party). A third party can raise a claim against the insured two-wheeler for losses or damages caused to their property or because of injuries or death.
In contrast, ‘two wheeler third party insurance‘ is a type of insurance that provides coverage specifically against third-party liabilities. This type of insurance policy involves three parties:
- The first party (policyholder)
- The second party (insurance company)
- The third party (the individual claiming the policyholder)
If a third party raises a claim against the policyholder for losses incurred, they will receive insurance benefits from the insurer according to the terms and conditions of the policy. This type of insurance is called a third-party liability or TP policy.
For instance, if your bike causes damage to a third-party person’s vehicle, then the third-party bike insurance plan will compensate them for the damage. This insurance is designed to cover the policyholder against legal liabilities in case of an accident or injury to the property of a third party.
First-Party Bike Insurance vs Third-Party Bike Insurance
Now that you understand the concepts of first-party and third-party bike insurance, it’s also essential to understand the difference between the two. This knowledge will help you choose the best insurance plan for your bike.
|Third-party bike insurance
|Comprehensive two-wheeler (first-party) insurance
|It is a type of insurance coverage that is mandatory by law in India to ride a bike on Indian roads legally. This insurance plan provides basic coverage against third-party liabilities, like injuries to them or damages to someone’s property while riding your bike.
|It is an insurance plan that offers extensive coverage. This insurance policy covers third-party liabilities and provides financial protection against damages to your bike caused due to theft, fire, accidents, natural or man-made disasters, and total loss.
Third-party bike insurance may offer basic coverage, but every bike owner needs this type of insurance coverage. Without this insurance, you risk facing legal and financial consequences in case of an accident or damage caused to a third party’s property. However, comprehensive two-wheeler insurance is ideal for bike owners who want complete protection for themselves and their bikes. This insurance lets you safely ride your bike, knowing you are financially protected in any unforeseen circumstances.
Awareness of insurance jargon and understanding the policy terms and conditions can help you make an informed decision while purchasing or renewing a two-wheeler insurance policy. It is essential to understand the difference between first-party and third-party insurance before deciding on the type of policy to purchase.
While third-party insurance is mandatory in India, first-party insurance is not. But the latter is generally advisable as it provides comprehensive coverage for damages or accidents. So, as a rule of thumb, it is better to enrol for first-party insurance, as it covers damages to both the vehicle and its owner. You can buy two-wheeler insurance online from prominent insurers like Tata AIG to get the best policy at a cost-effective price.
Always remember to drive safely and stay protected with the right insurance coverage. Happy Motoring, Safe Motoring!