What are 1st, 2nd & 3rd Parties in Bike Insurance?

What Does 'First-party' mean in Bike Insurance Policy?

The first party in the bike insurance policy refers to the individual who is a bike owner and buys the insurance for their vehicle. They pays the premium to their insurance provider and avail coverage benefits under their motorbike insurance policy.

However, the term 'first-party bike insurance' is very different. It provides financial protection against the damages caused to your own vehicle. The first-party bike insurance offers safety for several unforeseen instances, including natural calamities, man-made disasters, theft, fire, accidental damages, and total loss.

So, in first-party bike insurance, two parties are involved, i.e. you and the insurer. Suppose, you meet with an accident and raise a claim; the insurance company will pay the compensation according to the terms & conditions of the policy.

In simple terms, when you buy a two-wheeler insurance policy to protect your own vehicle, you are the first party here. This type of two-wheeler insurance is known as first-party insurance (commonly known as 'Own Damage' cover).

What Does 'Second-party' mean in Bike Insurance Policy?

The second party in the bike insurance policy refers to the party that offers insurance coverage to the consumers. Basically, it is the bike insurance company or insurance provider who is liable to compensate for the raised claims under the valid bike insurance policy.

What Does 'Third-party' mean in Bike Insurance Policy?

The third party in the bike insurance policy refers to someone other than the insured and insurance provider. They can be someone who raises a claim against your insured vehicle. This can be for causing unexpected damages or losses to their property or life in a road accident.

In India, it is mandatory to buy at least 'third-party bike insurance' that protects against third-party liabilities.In this type of policy, there is the involvement of three parties- first, second, and third. During a road accident, a third party can raise a claim against the insured for the losses caused to their vehicle and will receive compensation from the insurer.

That is why this type of motor insurance policy is known as a third-party liability policy or TP policy.Moreover, this type of policy is designed to compensate against legal liabilities if there is property damage or accidental damage to a third party.

Conclusion

Before buying any type of two-wheeler insurance policy, always check its inclusions and exclusions. Along with it, go through the policy's terms & conditions. With this, now you must have learned some basic insurance jargon and it will help you in deciding which type of plan will be beneficial for you.