Third-Party bike insurance and who it protects

Third-Party bike insurance is the least cover the law allows you to ride a two-wheeler with in India. It pays the people you injure and the property you damage, at a price the Insurance Regulatory and Development Authority of India (IRDAI) fixes by engine capacity, and it pays nothing at all towards your own bike. It is the whole of what the law demands and none of what you might want.

Almost every real question about this cover turns out to be a question about a person rather than about a policy. Is the person behind me covered? Is my brother covered when he borrows the scooter? What about the man whose car I dented, the pedestrian, or me? This page is built that way: the people first, then what they cost, then what happens when one of them makes a claim against you.

The name describes who is protected, not where they are sitting. Your insurer is the first party to the contract. You, the person named on the policy, are the second. Everybody else your bike harms is a third party, whether they are walking across the road, riding the vehicle you hit, or sitting on your own pillion seat. Whether a Third-Party only policy has to pay that last person is less simple than most riders expect, and it has its own section a little further down.

Third-Party cover keeps you legal on the road and pays for the harm you do to others. To have anything at all paid towards your own bike, you need Own Damage cover or a Comprehensive Plan.

The 3 plans a two-wheeler can be insured on

Every two-wheeler policy sold in India is one of 3 things. Reading them together is the quickest way to see what a Third-Party policy leaves out.

Searching for it under another name? 3rd party bike insurance, 2 wheeler third party insurance, act only bike policy and liability only cover all describe this same policy. The next section maps every name to what it actually is, so you can check a quote against it.

Act only is the name most likely to mislead, because it sounds like a cut-down version of a bigger product. It is not a version of anything. It is the complete legal minimum, and the gap shows the first time your own bike is the one on the ground.

Whether the person riding behind you is covered depends on the policy you hold. On a Comprehensive Plan, a pillion rider you carry for free is covered, and your insurer answers their claim if you injure them. On a Third-Party only policy it depends on the words in your policy document, because the law does not force that policy to cover a person riding free on a private two-wheeler. A pillion rider who pays you for the ride is covered by neither.

The confusion starts with the words. Third party sounds as though it means somebody outside the vehicle. It does not. It means somebody outside the insurance contract, and your pillion rider is outside it. So a pillion rider can always bring a claim. The harder question is whether your policy has to pay it.

Section 147 of the Motor Vehicles Act lists what a Third-Party policy must cover. In United India Insurance v Tilak Singh (2006), a case about a pillion rider on a scooter, the Supreme Court held that this list does not include a person riding free on a private vehicle. The regulator has since told insurers that the standard package policy for a two-wheeler covers a pillion rider, so a Comprehensive Plan does. A Third-Party only policy covers one only if its own policy document says so.

Being named on the policy stops a person claiming under it. Not being named lets your pillion rider bring a claim, but on a Third-Party only policy the insurer may not have to pay it.

The word third party describes a position in a contract, not a position on the road. The single most useful question to ask is whether the injured person is named on the policy. If they are not, they are a third party. Being a third party lets a person claim. Whether the policy then pays is what the last column shows.

Modified your bike? A louder exhaust, a larger engine, a sidecar or a load frame changes the vehicle the policy was written for. Anything that changes the engine capacity, the body or the seating has to be recorded on the registration certificate and told to your insurer. A change nobody was told about is one of the cleanest grounds an insurer has for asking you to repay an award.

Everything the law asks of a rider here is owed to somebody else, and that is the easiest way to remember it. Section 146 of the Motor Vehicles Act, 1988 makes it an offence to use a two-wheeler in a public place without a policy covering third-party liability, and the reason is the stranger you might one day knock down. The penalty under Section 196 is a fine of ₹2,000 for a first offence and ₹4,000 for a second, with or without up to 3 months in prison. A third offence is a repeat offence too, so the fine stays at ₹4,000. The bike can also be held until valid cover is produced.

Who this was written for. The duty is not there to protect you. It is there so that the person your bike knocks down has somebody with the money to pay them. That is why the cover follows the vehicle rather than the rider, why the injury limit has no ceiling, and why your insurer must pay an injured person even in the situations where it can then come back to you for the money.

A separate point that catches people out at renewal. Riding on an expired policy is the same offence as riding with no policy at all. There is no grace period written into the Motor Vehicles Act, and the 90-day window insurers allow for keeping your No Claim Bonus is a pricing rule, not a legal one. On the day your policy expires you are uninsured.

The law's own floor is lower still. Section 147 requires cover of only ₹6,000 for third-party property damage, and insurers write ₹1 lakh on a two-wheeler because the statutory floor would be worthless in practice. A policy quoting you the ₹6,000 figure for a small discount is legal, and it saves very little while leaving you far more exposed.

Where ₹1 lakh runs out

Here is the sum riders do not do until it is too late. You clip the rear door of a parked hatchback while filtering through traffic. The door skin, the rear quarter panel and the paint come to ₹62,000 and the policy pays it. Nothing to worry about.

Now change the parked vehicle. The same fall against the side of a large sport utility vehicle (SUV) takes out a door, a mirror housing with a camera in it and a sensor in the bumper. The estimate is ₹1.4 lakhs, the tribunal accepts it, your insurer pays ₹1 lakh, and ₹40,000 is yours to find. If you do not pay it, the tribunal can order it recovered in the same way as unpaid government dues, which in practice means your salary or your bank account.

A bike weighing 110 kilograms can comfortably cause more than ₹1 lakh of damage to a parked car. That is the whole of the personal liability risk in a Third-Party bike policy, and it comes down to 1 number.

No insurer can raise the figure, because it is written into the policy document the regulator approves rather than chosen by each insurer. Moving to a Comprehensive Plan does not raise it either. What a Comprehensive Plan does is pay for your own bike, which is a different gap entirely.

The 6 ways you end up paying the money back yourself

Your insurer's duty to an injured person is set by law and is wider than its duty to you. In the situations below it must pay the injured person, and it is then entitled to recover that money from you. This is called pay and recover, and it is the risk riders hear about least.

The point to take from this list. None of these stop the injured person being paid. The law puts that first, deliberately. What they change is who ends up out of pocket, and in every one of them the answer is you.

The standard exclusions on every two-wheeler policy

Some limits apply to every bike policy in India, whatever plan you hold and whatever optional covers you add. The table sets each one against both sides of a policy. Several of them repeat the list above, seen from the other side. On the own-damage side the claim is refused. On the third-party side the injured person is usually still paid, and the money is then asked back from you.

Third-Party bike insurance starts at ₹457 a year for an electric two-wheeler rated up to 3 kilowatts (kW). On a petrol two-wheeler it starts at ₹538 a year up to 75cc, a size very few new two-wheelers are sold in today, and rises to ₹2,804 a year above 350cc, such as a KTM 390 Duke or a Royal Enfield Himalayan 450. Goods and Services Tax (GST) of 18% is added on top. The regulator fixes each figure by engine capacity, so the same bike is quoted the same rupee amount at every insurer in India. Nothing else you do changes it: not your age, not your city, not how long you have been riding, not the value of the bike.

This is the part of motor insurance that behaves least like a market. On the own-damage side insurers compete, discount and price your individual risk. On the third-party side they are handed a rate card and told to use it. That is worth knowing before you spend an evening comparing Third-Party quotes, because there is nothing there to compare.

The rate for each engine capacity band

Find your engine capacity on your registration certificate (RC) and read across. The 5-year column applies only to a brand new two-wheeler, which must buy 5 years of Third-Party cover in a single payment at the showroom.

Rates are the regulator's notified two-wheeler figures and exclude 18% Goods and Services Tax. They are reviewed from time to time, and a revision applies to policies issued after the date it takes effect, not to one already running.

What you actually pay at the counter. Take the 75cc to 150cc band, which covers almost every commuter bike and scooter in India, such as a Honda Activa or a Hero Splendor Plus. The rate is ₹714, and the compulsory Personal Accident cover for the owner-rider adds ₹750 if you do not already hold it on another vehicle you own. Goods and Services Tax (GST) of 18% on both adds ₹263.52. That comes to roughly ₹1,728 for a year of being legal on the road.

Why a brand new two-wheeler pays 5 years at once

Since September 2018 a new two-wheeler cannot be registered without 5 years of Third-Party cover bought in one payment. A new car buys 3 years. The two-wheeler rule is longer because two-wheelers were the vehicles most often found riding uninsured, and a 5-year policy removes 4 renewal dates that could be missed.

What the showroom sells you is usually called a bundled policy: 5 years of Third-Party cover, and 1 year of Own Damage cover that you then renew every 12 months on its own. The Third-Party part stays in force for the full 5 years and cannot be reduced. It cannot be cancelled while the bike is on the road unless another valid Third-Party policy replaces it. The own-damage part is yours to renew, drop or move wherever you like.

On a new 110cc two-wheeler, such as a Honda Activa or a TVS Jupiter, the 5-year Third-Party premium is ₹3,851 before tax. Spread across 5 years that is about ₹770 a year, and you cannot be fined for letting it lapse, because it cannot lapse.

Is there anything at all to gain by shopping around?

Shopping around gains you nothing on Third-Party bike insurance, because the premium for your engine capacity is identical at every insurer licensed in India. The regulator sets it rather than the insurer. A quote page showing you different Third-Party figures is either showing a different engine capacity band, adding the compulsory Personal Accident cover to one quote and not the other, or quoting a Comprehensive Plan against a Third-Party policy. Read what is being priced before you read the number.

The own-damage side is the opposite. There the same bike can be quoted amounts that differ by a third between 2 insurers, because each one is pricing your bike, your city, your age and your claim history in its own way. If you want something to compare, that is where comparing pays.

An electric vehicle (EV) two-wheeler is priced on the rated power of its motor in kilowatts (kW) rather than on engine capacity in cubic centimetres, and every band is set about 15% below the matching petrol band. An electric scooter rated up to 3 kW pays ₹457 a year against the ₹538 a petrol moped pays. The discount is a nudge towards cleaner vehicles, not a reflection of how much harm an electric scooter can do.

The rate for each motor power band

The figure to look for is the rated power on your registration certificate, not the peak power a brochure quotes. A bike advertised as a 6 kW vehicle is often rated at 3 kW or less, and the rated figure is the one that decides your band.

Rates exclude 18% Goods and Services Tax. A low-speed electric scooter rated under 250 watts that cannot pass 25 kilometres an hour is not a motor vehicle in law, needs no registration and needs no insurance at all.

Where a Third-Party policy leaves an electric two-wheeler badly exposed

The battery is usually between 40% and 50% of what you paid for an electric two-wheeler. A Third-Party policy has no Insured Declared Value, because nothing of yours is insured under it, so the battery has nothing behind it at all. Replace a damaged battery pack on a mainstream electric bike and you are looking at ₹45,000 to ₹70,000 out of your own pocket, which is most of the price of a new petrol bike.

• A charging fire is 2 claims, and only 1 of them is yours. If a battery catches fire while charging in your building and damages your bike, a Third-Party policy pays nothing. If the same fire scorches a neighbour's door or their car, that is third-party property damage and the policy answers it, up to the limit
• The battery is the part most often damaged by flooding. Riding an electric bike through standing water can end the battery pack in one afternoon, and a Third-Party policy has no answer to it
• A leased battery still needs cover. Some electric bikes are sold with the battery on a subscription. Check who the battery belongs to, because damage to a battery owned by somebody else is damage to another person's property and the rules change
• The premium saving is small and the gap is large. Buying Third-Party cover alone on an electric bike saves about ₹100 a year against a petrol bike, and leaves the single most expensive part of the vehicle uninsured

If you ride an electric two-wheeler, this is the honest advice. Take Own Damage cover as well, and check that the policy names the battery pack in what it covers. The saving from staying on Third-Party cover alone is a few hundred rupees. The thing it leaves uncovered costs tens of thousands.

A scooter is insured under exactly the same rules as a geared bike, because the law and the rate card both use the words two-wheeler and neither knows what a gearbox is. If a quote page asks for your bike details and you ride a scooter, that page is asking about your scooter. The cover, the premium bands, the compulsory Personal Accident amount and the claim route are identical.

Almost every petrol scooter sold in India falls in the 75cc to 150cc band, so almost every scooter in the country pays the same ₹714 a year. A Honda Activa, a TVS Jupiter and a Suzuki Access 125 are quoted the same rupee figure, and a rider moving from one to another sees no change in the Third-Party line at all.

The 5-year rule applies to a new scooter in the same way as to a new bike, so a scooter bought today leaves the showroom with Third-Party cover already paid for until 2031. What it does not leave with, unless you ask, is anything covering the scooter itself after the first year.

• Honda Activa
• TVS Jupiter
• Suzuki Access 125
• TVS Ntorq 125
• Hero Pleasure
• Ather 450X

On a two-wheeler matter you are far more likely to be the person answering a claim than the person bringing one. A rider is light, fast and close to everybody else on the road, so the person on the ground after a bike accident is usually somebody else. A Motor Accident Claims Tribunal is where that person makes a claim for money, and your name appears on the application beside your insurer's.

A Motor Accident Claims Tribunal is a special court that state governments set up under the Motor Vehicles Act, 1988 to decide compensation after road accidents. Injury and death claims go there rather than to an ordinary civil court. An injured person has 6 months from the accident to apply, and the application names the rider, the registered owner and the insurer together.

That is a different position from the one a car owner is normally in, and it changes what you should do. You are not chasing anybody. You are not proving a loss. Your whole job is to make sure the person defending you has the papers, the dates and a truthful account, and then to let them get on with it.

The tribunal is not deciding whether you are a criminal. A magistrate's court does that separately, on its own timetable. The tribunal decides one thing only: what the injured person is owed, and by whom.

What a two-wheeler award actually comes to

Riders picture a figure that would end them. The honest range is wider and lower than that, because most bike accidents produce a recoverable injury rather than a death, and because a tribunal prices what an injury cost the person rather than what the accident looked like. The column that matters to you is the last one.

Read that table twice. The rows with the frightening numbers are the rows your policy answers in full. The row with the small number is the only one that reaches your bank account, and it is the property damage row.

The 2 shorter routes, and when a family uses them

Not every case is a full contested hearing. A family that needs money now, or a family whose rider was never traced, has a quicker road.

• The fixed no-fault amount. A family can ask for ₹5 lakhs on a death and ₹2.5 lakhs on a grievous injury without proving who caused the accident. Your insurer pays it, and it is taken off any larger amount the tribunal orders later
• The hit and run fund. Where the two-wheeler that caused the accident is never traced, there is no insurer to ask, so a government fund pays ₹2 lakhs on a death and ₹50,000 on a grievous injury through the district authority. This is the whole reason Section 134 asks a rider to stop

How long it runs, honestly. Between 1 and 4 years for an ordinary bike injury case, and longer where a disability is disputed. Long stretches pass with nothing happening, because the tribunal controls its own dates. Anybody who gives you a finishing date is guessing, and you should treat that as a reason to doubt the rest of what they tell you.

Either side can go to the High Court within 90 days of the amount being decided, and only where more than ₹1 lakh is in dispute. Interest keeps running while that happens, so an appeal that fails costs more than the original figure did.

A third-party bike claim is almost always somebody else claiming against you. You report the accident to the police and to your insurer, the police file a report with the Motor Accident Claims Tribunal, the tribunal issues a notice to you, to the registered owner and to your insurer, an advocate answers it on your behalf, and the tribunal decides the amount and orders your insurer to pay it.

The 8 stages, in the order a rider meets them

Nothing in these 8 stages is particular to Kiwi Insurance. Knowing them is the difference between feeling ambushed by a notice 5 months after an accident and knowing exactly what it is and who deals with it.

If another vehicle hits you. Your own Third-Party policy does nothing for your bike and nothing for your injuries. You claim against the other rider or driver, before the same tribunal, as a third party on their policy. That takes time, which is the plainest argument there is for holding Own Damage cover as well, because Own Damage cover repairs your bike now and lets your insurer chase the other side afterwards.

What changes when the insurer is Kiwi Insurance

The 8 steps above do not change. What changes is who helps you at the insurer's end, and what they can and cannot do on a legal case.

A complaint about the way your insurer treated you is a different thing from the tribunal case, and it travels a different road. There are 3 doors: your insurer's own grievance desk, the regulator's Bima Bharosa portal, and the Insurance Ombudsman. Each one will ask what the door before it said, so the order is not a formality.

Start by being clear about which argument you are having. If you are unhappy that your insurer was slow, rude, wrong about a policy term or silent for weeks, this road is yours. If you are unhappy about the amount a tribunal ordered for somebody you injured, none of these 3 doors will open: that is an appeal to the High Court within 90 days, argued by advocates.

3 things that decide whether a complaint gets anywhere. The reference number from the first door, the date you were answered or the date the silence started, and a single sheet of paper that says what you want done. A complaint that asks for something specific is acted on. A complaint that describes how annoyed you are is filed.

One point riders find surprising. The Ombudsman is binding on your insurer and not on you, so applying costs you nothing except the time, and turning the answer down leaves every other road still open to you.

There are 2 ways to add protection for your own bike. Buy a Comprehensive Plan, which holds Third-Party cover and Own Damage cover together in 1 policy, or keep the Third-Party policy you already have and buy a standalone Own Damage cover to run alongside it. The second route exists mainly for new two-wheelers, which already carry 5 years of Third-Party cover paid for at the showroom.

Optional covers attach to the own-damage side of a policy, so you need a Comprehensive Plan or a standalone Own Damage cover before you can add one. Nothing can be added to a Third-Party policy, not Zero Depreciation cover, not Roadside Assistance cover, not Engine Protect cover, with one exception, Personal Accident cover. Personal Accident cover can be added to any plan, including a Third-Party only plan. The compulsory owner-rider Personal Accident cover of ₹15 lakhs is carried on a Third-Party policy because the law requires it there, and Pillion Rider cover, which pays a fixed sum if the person behind you is killed or permanently disabled, can be added to it too. This is not a Kiwi Insurance rule. There is simply nothing else on a Third-Party policy for an optional cover to attach to.

The No Claim Bonus, and why a Third-Party policy cannot earn it

A No Claim Bonus (NCB) is a discount that grows for every year you ride without making a claim. It is taken off the own-damage part of the premium and only off that part, which is why a Third-Party policy on its own can never earn one however long you ride. The moment you hold own-damage cover the clock starts.

The discount is yours, not the two-wheeler's. It moves with you to your next bike and to a different insurer, and it is lost if the policy is allowed to lapse for more than 90 days. One claim on the own-damage side takes it back to zero at renewal.

When each route is open to you

• Own Damage cover can be added on any day of the year. It is a policy of its own, so it does not have to wait for your Third-Party renewal date. This is the route a new two-wheeler takes, because its 5-year Third-Party cover cannot be touched
• A Comprehensive Plan can only start at your Third-Party renewal date. It contains Third-Party cover, so it cannot begin while another Third-Party policy is still running on the same bike
• Dropping back down also waits for renewal. You can move from a Comprehensive Plan to Third-Party cover alone, and it takes effect at the renewal date rather than mid-term
• An inspection is needed when you add own-damage cover to an older bike. A short video check or a visit, so that damage already on the bike is recorded before the cover starts
• Cancelling works differently from life and health insurance. A motor policy has no free-look period. You can ask the insurer to cancel it, and any refund for the unused period depends on the insurer's cancellation terms and on whether a claim has been made. The Third-Party part cannot be cancelled while the bike is on the road without other valid Third-Party cover. Kiwi Insurance's terms are: [Kiwi Insurance cancellation and refund terms]

To buy Third-Party bike insurance for a two-wheeler already on the road, you enter the registration number, check the engine capacity band against your registration certificate (RC), answer the Personal Accident question, pay, and keep the policy document you are sent. A brand new bike is different, because the dealer arranges 5 years of Third-Party cover before the bike is registered. Renewing follows the same steps as buying, and on Third-Party cover alone there is normally no inspection.

Buying on a brand new bike

You do not buy Third-Party cover separately on a new two-wheeler. The dealer arranges it before the bike is registered, because the regional transport office will not register a new two-wheeler without 5 years of Third-Party cover paid in advance. You can still choose the insurer and the Own Damage cover that goes with it, so ask to see the quote before you sign the invoice.

Before you ride away, check 3 details on the policy document. They are the engine number, the chassis number and the engine capacity. A mistake in any of them is easy to correct on the first day and awkward to correct after an accident.

A driving licence is not normally asked for when you buy. It matters later, because a claim made against you will ask for the licence of whoever was riding.

What changes at renewal, and what does not

• The rate can change. The regulator revises the Third-Party rates from time to time, and a renewal is priced at the rate in force on the day it starts, not the day you bought the old policy
• Nothing is reset, because nothing builds up. A claim made against you last year does not raise the Third-Party premium, since the rate is set by engine capacity band alone. There is no No Claim Bonus on Third-Party cover to lose
• No inspection is needed for Third-Party cover alone. This holds even after a break in cover. An inspection comes in only when you add Own Damage cover to an older bike or after a lapse
• Your details carry over, so check them. The registered mobile number, the email, the address and the nominee for the Personal Accident cover are copied from the old policy unless you change them
• The expiry date is a hard stop. There is no grace period for riding. Renew before the old policy runs out, because the new one starts from the time printed on it and is never backdated

Renewing the 5-year policy from a new bike? The Third-Party part does not renew every year. Only the Own Damage part does, every 12 months. The Third-Party part comes up for renewal once, 5 years after the bike was first registered, so note that date somewhere you will see it.

On Third-Party cover the premium is the same rupee figure at every insurer in India, so there is no price to win on. What differs is what an insurer does in the months after an accident, and that is the whole of the comparison. With Kiwi Insurance you can report the accident in the app on the day it happens, before anybody makes a claim, so your account is already on file when a notice arrives.

We will also be straight about the limits of what anybody can do here. A third-party matter is a legal case in a tribunal. It runs to the tribunal's dates and not to ours, and long stretches pass with genuinely nothing to report. The 3 things below are the things an insurer actually controls.

Where the personal Claims Specialist fits on a third-party matter Only with Kiwi Every Kiwi Insurance claim is given a personal Claims Specialist once the claim is registered. On an own-damage repair that is the person who moves the whole thing along. On a third-party matter the role is a smaller one and we would rather say so plainly: they can explain what a notice means and pass your papers to the advocate, and they cannot conduct the legal case for you, because an advocate does that and a tribunal decides it. Ask the advocate about the case. Nobody can tell you when a tribunal will decide.

What a bike customer can and cannot have today

The personal Claims Specialist comes with every Kiwi Insurance claim once it is registered, on a bike as on a car. Kiwi PayFirst, Kiwi InstaCash and Kiwi Insurance Flexi Repair are optional covers on Kiwi Insurance car policies at present and are not offered on two-wheeler policies, and the enhanced No Claim Bonus sold on car policies is not available on bike insurance either. Nothing on this page is offered to you as a bike benefit that a bike customer cannot have.

The ordinary No Claim Bonus does apply to a two-wheeler, and it is worth having. It is taken off the own-damage premium, so it starts the day you add Own Damage cover and climbs from 20% to 50% over 5 claim-free years.

“A third-party case is slow and most of it happens out of sight. The least we can do is open the file on day 1 and tell you the truth about the rest.” — Saurav Jaiswal, Co-founder, Kiwi Insurance