5 Reasons Why Third-Party Insurance is Not Enough for Your Bike

18th April 2022: The purpose of investing in bike insurance is to ensure timely financial assistance during need. But what if you don’t receive the compensation as expected, or what you believed turned out false during the claim settlement process? It often happens when people skip reading the exclusion section of any insurance policy or bring assumptions at play. 

If you’re a bike owner who wants to secure his two-wheeler by purchasing a third-party insurance policy, you should stop and rethink your decision. Although it is a reasonably low-cost policy, the lesser premium is accompanied by limited coverage, which many wouldn’t be comfortable with.

Some people go ahead with the third party policy seeing the lower premium but don’t check its exclusion section or limitations in terms of a policy. To save you from an unpleasant shock at a future date, we have compiled five strong reasons as to why third-party insurance is not enough for your bike. Let’s quickly check the reasons shared below.

• Doesn’t Cover Own Damages

As mentioned above, third-party insurance offers limited coverage to the insured. If you ever have an accident, the insurer will be liable to cover the financial damages caused to any third party individual(s) or property(s) because of you, but won’t cover your own damages. It implies you will have to bear your own treatment and vehicle repair expenses from your pocket.   

• No Scope to Purchase Add-Ons

For the uninitiated, add-ons are additional policy coverage that can be purchased for an extra cost. Unfortunately, you don’t get the option to upgrade your standard coverage available with third-party insurance. If you’re someone who places vehicle safety and security at the top of everything and wants the best coverage for your bike, you should proceed with comprehensive bike insurance. Comprehensive insurance is an all-inclusive policy and allows people to enhance their coverage by purchasing the available add-on(s).

• Doesn’t Compensate for Losses Arising from Natural Disasters

No one can predict when natural disasters like floods, earthquakes, etc., will occur, but we sure can take precautionary measures in advance. If you own a vehicle, you should take this point very seriously. If you lose your two-wheeler to any natural disaster, your insurer won’t cover the losses if you have purchased third-party insurance. For coverage from natural disasters, you should buy comprehensive insurance.

• No IDV Customization Option for IDV

An IDV, also known as the Insured Declared Value, is the market value of your vehicle. It is also the maximum value your insurer will provide if you lose it to theft to severe damage. Since the settlement or claim amount depends on IDV, it is essential to ensure your insurer doesn’t undervalue your vehicle. Unfortunately, people don’t get the option to customize their IDV in the case of third-party insurance, which can pose a negative impact in the long run.

• No Compensation in the Event of Bike Theft/Loss

Losing a bike to theft or severe damage is something no vehicle owner would want to happen. But if it becomes a reality, your insurer won’t compensate for it under third-party insurance. Suppose you want your insurance company to cover your own damages due to theft, natural disasters, accidents, or man-made disasters like a riot. In that case, you will have to move forward with comprehensive insurance.

Secure Yourself & Your Bike Under the Best Available Insurance

The Indian insurance market has various insurance policies, but the two main types of policies popular among people are third-party and comprehensive insurance. While the former provides decent coverage against third-party liabilities, it doesn’t cover its own damages. This limitation is well covered by a comprehensive policy.

So if you want to protect your bike and yourself from any financial obligation arising from accident, theft, or loss beyond repair, a comprehensive policy should be your go-to choice. But if you have a fairly limited budget for premiums and can risk spending out-of-pocket expenses to cover your own damages at any future date, you can stick to third-party insurance.