Why is Third Party Bike Insurance Mandatory in India?

It was just a normal day; you kick-started your bike to leave for office; you needed to reach on time and you are in a hurry. Just as you were five minutes away from the office, your boss called. You had to answer his phone and in a hurry, you lost control of your bike. Bang! you went straight into a car, damaging the door and injuring a female who was alighting the car. The driver stopped and held you responsible for the damage. It was your fault for which you had to pay the third-party claim. You had no clue of a third-party claim and tried to escape the scene. Suppose this becomes a reality for you! How will you deal with this situation? Read-on to know.

What is third-party bike insurance?

Third-Party Bike Insurance is the policy that helps you with liabilities arising out of accidental damage, injury or death to the third party. The insurance company takes care of the liability. The amount of compensation for an injury that you are liable to pay is decided by the court. In the event of deaths, the compensation will be equal to the Sum Insured amount.

In the event of third party incidents, the insurance company will take care of the legal liabilities that will include advocates, investigations, and any verification.

The premium for Third-Party Bike Insurance

Premium is the amount of money you pay to the insurance company against the coverage you seek. The premium is computed based on the cubic capacity of the engine’s bike. The Third-Party Premium is decided by the regulatory body IRDA.

Engine CapacityThe Third-Party premium for 2019-20 in INR5 years/Long Term Rates for Third-Party Insurance for Bikes.
Not exceeding 75 ccRs.482Rs.1045
Exceeding 75 cc but not exceeding 150ccRs.752Rs.3285
Exceeding 150 cc but not exceeding 350 ccRs.1193Rs.5453
Exceeding 350ccRs.2323Rs.13034

Why is third-party insurance mandatory?

Third-Party Bike Insurance is mandatory as per the Motor Vehicle Act 1988. No person is allowed to drive a bike without Third-Party Bike Insurance. The idea was to build a security for the injured or their dependents. If you are caught driving without a policy, then you are liable to pay a fine of Rs.2000/- and/or face imprisonment for 3 months.

Over the years, the number of bikes has increased. It directly converts to the percentage increase in the fatalities, notable among them being hit and run cases. For many riders, if they land in any accidents, it was next to impossible for them to pay for hospital expenses or other property damage expenses caused to the third-party because of them. Yet it is the rider’s responsibility to pay off those liabilities. Hence, third-party liability bike insurance was made mandatory by law.

Benefits of Third-Party Bike Insurance

Third-Party Bike Insurance will be beneficial for you as:

  1. It covers legal liability arising out of third-party bodily injury, death or property damage.
  2. The premium for Third-Party Policy is less. The policy is affordable.
  3. It gives you peace of mind and a sense of security.
  4. Owning a TP Liability Policy will help you avoid traffic penalties.

Who should buy a Third-Party Bike Insurance?

You should buy a third-party bike insurance policy if:

  1. You drive your bike in public/on the roads. There are chances that you may hurt or injure some third person.
  2. Own a bike. It is wise to buy third-party bike insurance even when the bike is parked at home and not used much for driving.
  3. You are the owner of the bike even when you do not drive it. If you are the owner you will be held responsible for all the claims.

If you have any questions, please ask below!