Increasing awareness about environmental woes and rising fuel prices have paved the way for electric vehicles in India. Just as more and more people are buying electric vehicles, it has become important to safeguard your electric two wheeler against losses. Both third party bike insurance and comprehensive insurance for two wheeler ensure protection against financial liabilities arising due to your two wheeler.
Does an Electric Bike Need Insurance?
In India, third party electric bike insurance is mandatory for all two wheeler owners. However, things are a bit different for electric bikes. There are many variants of electric bikes available in the Indian market. Since the authorities are still formulating rules regarding electric bike insurance, some electric two wheelers are exempted from having insurance.
For example, electric bikes with a power usage of less than 250 watts and a maximum speed of 25 km per hour are exempted from insurance. Meanwhile, electric bikes with higher power consumption and speed must have insurance.
There are primarily two types of bike insurance – third party bike insurance and comprehensive insurance for two wheelers. While both offer protection in the face of a road mishap, the nature and extent of coverage are different. Let us look at each one in detail.
Third party Electric Bike Insurance
Third party insurance covers third party liabilities only. In insurance terminology,
- The first party is the owner or driver of the insured vehicle.
- The second party is the insurance company.
- A third party is a person or property affected due to an accident with the insured vehicle.
In case of an accident, third party bike insurance covers the cost of damages to the third party property and treatment expenses for the injuries sustained by a third party person. Here are some situations covered by third party bike insurance:
Injuries caused by insured bike
If a third party person suffers injuries in an accident involving the insured electric two wheeler, the insurance company will pay for the hospitalization, treatment, medicines, and other medical expenses.
Death of the third party
In the event of the death of a third party in a road accident involving the insured bike, the insurer will give compensation to the family of the deceased.
Disability
Third party electric bike insurance covers financial obligations arising out of severe injuries leading to a permanent disability of a third party.
Property damage
If your insured electric bike damages a third party property such as their vehicle, your insurance provider will cover their losses under your third party bike insurance. This way, the policy will minimize their losses and you will not have to pay anything out of your pocket to settle the matter.
Things Not Covered by Third party Electric Bike Insurance
While insurance covers most situations and losses to a third party due to the insured vehicle, some losses are exempted from coverage. These are:
- Gradual wear and tear due to overuse or prolonged non-usage of third party property
- Contractual liability
- Third party damages arising due to riots, war-like situations, and nuclear risks
- Violation of the law such as drunken riding and mobile use when riding your electric bike.
Comprehensive Insurance for Two wheeler
Comprehensive insurance for two wheelers promises exhaustive coverage against accidents involving your bike. It covers not only third party liabilities but also protects you against own damage. It covers your bike against many uneventful situations such as:
1. Road accidents
If your bike faces damage due to a road accident, comprehensive insurance for two wheelers will cover the repair costs. It will also cover the medical expenses of the policyholder if he/she gets injured in the accident.
2. Fire
The policy protects against damages from fire accidents including self-ignition and lightning incidents.
3. Theft
In case your electric bike gets stolen, comprehensive bike insurance will cover your losses and give you compensation for purchasing another bike.
4. Natural and manmade calamities
The policy covers you against the damages caused by natural calamities such as earthquakes and floods. It also covers damages due to manmade issues such as riots and acts of terrorism.
Exclusions in Comprehensive Insurance
Some common exclusions of the policy are:
- Depreciation cost due to overuse and, wear and tear of the bike parts
- If the rider is found to be drunk or under the influence of any intoxicant at the time of the accident
- Electrical or mechanical breakdown due to technical issues arising from poor quality of involved parts
Comprehensive vs. Third Party Bike Insurance
- According to the Motor Vehicles Act, third party insurance is mandatory. Driving a vehicle without an active policy is an offense and will attract hefty fines. Meanwhile, comprehensive insurance, despite not being mandatory, is highly recommended for the scope of coverage it offers. It not only covers third party liabilities but also covers its own damage.
- Third party bike insurance offers limited coverage and you cannot buy add-ons to enhance it. Comprehensive insurance for two wheeler allows you to buy add-on covers and expand coverage.
- Comprehensive insurance is more expensive than third party insurance.
- You can customize comprehensive insurance based on your needs and budget. A third party insurance policy is a standard plan and does not allow personalisation. The premium amount for third party insurance is set by the Insurance Regulatory and Development Authority of India (IRDAI).
Conclusion
Electric bikes are way more expensive than traditional engine bikes, and demand greater care and attention in terms of use and maintenance. A third party insurance plan would hardly help you in the face of accidental damage to your electric bike. To enjoy coverage against own damage and avail of the benefits of add-covers buy comprehensive bike insurance.
Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.
Also read: When Should I Renew My Auto Insurance Policy
