The need for insurance is crucial in today’s world, no matter how safe one is behind the wheel. Anybody can suffer an accident at anytime, so having insurance is a must.
Bike insurance is the most critical part after buying a vehicle as it protects your bike and also your legal rights.
But there is often confusion about whether to buy first-party insurance or third-party insurance.
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You’re probably aware that it’s essential to choose the right insurance type for your needs. It determines how your legal rights will be protected and your compensation for any damages suffered.
Research, planning, and understanding various terms associated with bike insurance are important to choosing the right plan. It can be confusing to decide which option is best for you, as there are so many options.
Choosing first-party coverage or third-party coverage is a crucial decision. Understanding how a first-party insurance policy differs from a third-party policy is necessary to deduce.
With first-party insurance, your vehicle is completely protected against damage. An insurance contract between the insured (policyholder) and the insurance company consists of two parties.
Under the plan, you are covered against fires, natural disasters, thefts, and accidental losses. Compensation is directly paid by the insurance company in case of an insurance claim.
A principal advantage of first-party bike insurance is that it covers damages of all types. But you must know that in certain situations you can’t make a claim, like during common wear and tear, damages to tubes or tires, electrical damage and breakdown, nuclear attack damage, driving under alcohol influence, or depreciation.
What Is First-Party Insurance For Bikes?
“First Party Insurance” as the term indicates is insurance bought by the first party. The first party pays the insurance premium and profits from the beneficial services provided under the policy.
This insurance gives complete coverage and peace of mind. All damages incurred by the bike including damage due to accident, natural calamity, fire, or any other man-made calamities.
You must know that two types of parties are involved in first-party insurance. It is the person who buys the insurance and the insurer. You must raise a claim, after which the insurer pays the compensation.
Following the terms and conditions of the insurance company and the respective policy, you have opted for.
In case you need first-party insurance for your two-wheeler, know that the insurance plans usually offer complete protection of your vehicle. This policy is also called a comprehensive policy as it covers liabilities by the first party, and damage to your bike, and the compensation is in your hands directly after the acceptance of the claim.
Damage due to fire, natural occurrence, theft, or man-made damage is a common circumstance under which insurance is helpful.
Routine issues that are small like electrical breakdowns or normal wear and tear or the need for spare parts are situations that are not covered under the insurance plan. You must clarify your queries and doubts with the insurer to help set up a streamlined claiming process.
Difference Between 1st-Party and 3rd-Party Insurance
There is one major difference between first-party insurance and third-party insurance and that is that first-party insurance contracts have implied “fiduciary” duties for you.
In other words, they must treat you fairly. An insurer dealing with a third-party claim lacks the same fiduciary duties because it has no direct relationship with you.
Apart from the basic difference, there is a need of understanding both types in detail to help you better analyze and compare the insurance and get the right one to secure your vehicle.
|The first-party coverage on a bike insurance policy covers only damage to your bike, whether it is caused by a natural disaster or a man-made event.
|A third-party motorcycle insurance policy provides coverage only for damages caused to a third party, such as property damage and bodily injury.
|An accident with a bike can be covered by most first-party bike insurance policies for up to Rs. 15 lakh.
|It is not possible for the policyholder to claim damages or losses for his vehicle in this situation.
|The first-party bike insurance policy offers several optional add-ons, including zero depreciation, and consumable cover, return-to-invoice cover, accident coverage for co-riders, and key replacement coverage.
Bike insurance policies with these add-ons provide policyholders with full and comprehensive coverage.
|There are limited benefits to the insured when it comes to coverage for his or her bike under a third-party insurance policy.
Moreover, personal accident coverage is only available as an add-on.
|Purchasing first-party insurance for your bike is highly recommended if it is new or expensive, as it will enable you to recover damages.
|The best option if you have an old bike whose value is low is to get third-party bike insurance. This ensures that any repairs or damages will be taken care of easily.
|It is more expensive to insure a first-party bike compared to a third-party bike since the owner’s maximum risks are covered.
|Third-party bike insurance has a large share of the Indian two-wheeler insurance market. It also offers a lower premium.
|The insured is entitled to recover losses under first-party bike insurance according to the policy terms. The insurer can be penalized for failing to honor a claim.
|Only the third party can file a claim in third-party bike insurance. The third party must go through all legal procedures to receive the claim amount since it only accepts claims for accidental damage.
Ontrack provides online vehicle insurance for vehicles with an option to choose between first-party or third-party insurance. Choose Ontrack if you are looking for a smooth insurance experience with a swift insurance claim!
Frequently Asked Questions(FAQS)
Is third-party insurance worth it?
It is the main form of insurance that covers third-party damage only. A third-party insurance policy is a legal requirement for driving on the road. It is necessary to have third-party insurance.
Is first-party or third-party insurance better?
It would depend on what type of coverage you are looking for. For optimal coverage and third-party protection, the comprehensive plan is recommended.