What are these two categories? How is one different from the other? Here are 4 of the most important differences between the two-
1. Coverage OfferedThe biggest difference between the two is the coverage they offer. Two-wheeler insurance for third-party only protects you against third-party liabilities. So, if at all you were involved in an accident while riding your bike and someone else's bike was damaged in it, your insurer will pay for these damages. Note that third-party insurance is mandatory by law.
With comprehensive insurance, you get coverage for own damages (OD) as well. So, if the accident damaged someone else's as well as your bike, your insurer will cover the expenses of repairing both the bikes as per the terms and conditions of the policy. However, comprehensive insurance is optional.
2. NCB or No Claim BonusAnother big difference is NCB or No Claim Bonus. The NCB helps you get a considerable discount at the time of renewing your two-wheeler insurance. You get NCB, for every year you do not file a claim. For the first claim-free year, the NCB is 20%. It keeps on increasing up to 50% until the fifth claim-free year. But NCB is only available for comprehensive policies and not for third-party insurance.
3. Availability of Add-onsWith comprehensive policies, you also get to purchase add-ons. You can consider zero depreciation, roadside assistance, NCB protector, and engine protection add-ons at the time of purchasing or renewing two-wheeler insurance for increasing the scope of the policy.
However, these add-ons can only be purchased with a comprehensive policy and not with third-party policies.
4. Adjustable IDV (Insured Declared Value)IDV or Insured Declared Value is the maximum amount your insurer will pay in case if your two-wheeler is totalled or lost. IDV has a significant impact on insurance premiums. With comprehensive insurance, you get to set your own IDV.
But no such facility is available for third-party insurance as IRDA regulates its premium.
What Should You Select?As mentioned above, third-party insurance is mandatory by law. If you are caught without valid third-party two-wheeler insurance, you can be fined or even imprisoned. However, the third-party policy is just basic insurance which only covers third-party damages and losses.
For increased protection, it is better to go with a comprehensive policy as it covers own as well as third-party damages. While it costs more than basic third-party insurance, it can offer significant benefits over the policy tenure.
Click here to apply for a motor insurance.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
Disadvantages of Early Retirement - What Happens When You're Not Working?
Early retirement seems to be good, many people enjoy life without working especially with extra earnings. But they are not aware about the cons. Lets explore the disadvantages of retiring early to save your retirement life.
5 Benefits of Health Insurance that Makes it a Must Have Cover
Here are the 5 benefits of health insurance that makes it a must to cover
When Should You Withdraw Money from a Mutual Fund?
In case of a sudden change in fund strategy or an underperformance scheme for more than 3-4 years, it makes sense to withdraw money.
How To Apply For Personal Loan
Applying for a personal loan has become extremely easy these days. With the increase in applicants, banks and other financial institutions have made the process very simple.