First-party insurance is a type of coverage that protects the insured from damage or injury that may be incurred either as a result of owning, purchasing, or using an insured vehicle. The insurer settles its claim, and its premium rates are based on the approximate market value of the bike, i.e. the IDV. Even though it is not mandatory, it is highly recommended to protect the insured from damage or injury directly engaged with their vehicle. The first-party coverage can be any of a variety of policies, including collision coverage, comprehensive policy, uninsured motorist coverage, and more. If a person fails to purchase (or does not have) the appropriate first-party insurance for their type of vehicle, then they may be found negligent for those damages. The first-party bike insurance includes coverage against natural calamities, fire, man-made calamities, theft, accidental damages, and total loss. However, it does not cover normal wear and tear, mechanical or electrical issues, damage from riding under the influence of an intoxicating substance, or damages caused when riding without valid documents such as a driving licence, insurance certificate, etc.
On the other hand, a 3rd party insurance coverage is a type of coverage that covers the damages from an accident to someone who is not at fault in the event. It is an insurance policy that is purchased to cover damages to another person who has been involved in an accident with the insured. It is also known as the Third-party Liability policy. The IRDAI sets the premium rates for this insurance coverage to be higher than first-party insurance rates. It does not include coverage for damage incurred by your bike, for riding the bike without a valid Driving Licence, and for riding under the influence of an intoxicating substance. The Motor Accident Claims Tribunal court settles the claims under this insurance plan, and it’s a mandatory insurance plan.
The easiest way to explain what 1st and 3rd party bike insurance means would be this: 1st party bike insurance will cover any damages done by you and your property, whereas 3rd party bike insurance will cover any damages done by others. In either case, every rider needs to have both types of insurance in order to ensure their protection against any accidents or incidents.
Now that the difference between first and third-party bike insurance is known, one must ensure to make the right choice for protecting their bike, other riders on the road, and themselves from any unforeseen circumstances. Cholamandalam MS bike insurance policy helps you ride stress-free with its extensive coverage and a wide range of add-ons. Check it out to get the best insurance package for your dream ride!