New Bike Insurance: Why a 5-Year Third-Party Cover Is Needed

When you buy a new bike, the insurance usually has a 5-year third-party cover. This is a long-term third-party policy sold at the time of purchase. It makes sure your new bike has the compulsory legal cover for five years, so you do not have to renew the third-party part every year.

Here is how it works and what you should check.

Why third-party cover is a must

Under the Motor Vehicles Act, 1988, third-party insurance is compulsory for every vehicle on Indian roads. It pays for injury, death or property damage you cause to another person. Injury and death liability is unlimited, and property damage liability is limited to ₹7.5 lakh.

If you ride without valid insurance, the fine is ₹2,000 and/or up to 3 months in jail for a first offence, and ₹4,000 and/or up to 3 months for a repeat offence. See our post on the penalty for riding without insurance for more details.

Why 5 years for a new bike?

For new two-wheelers, the third-party cover is usually sold for 5 years in one go. There are some clear benefits:

• No gap in cover. You are less likely to forget a renewal for the compulsory part.
• Less paperwork. The third-party part is done at the start.
• Easy at purchase. Insurers usually offer this long-term cover for new bikes when you buy.

For new cars, the third-party cover is usually sold for 3 years. You can read about this in our new vehicle insurance page.

What about own damage?

Own damage cover is different. It protects your own bike from accident, fire, theft, natural calamities like flood and earthquake, and man-made events like riots, as per policy terms.

Own damage is usually sold for 1 year at a time, so you renew it every year. Some insurers may offer a longer own-damage option. Check what your insurer offers, because terms differ.

So a typical new bike package looks like this:

1. Third-party cover for 5 years
2. Own damage cover for 1 year, which you renew
3. Compulsory personal accident cover of ₹15 lakh for the owner-driver, unless you already have a similar cover

The personal accident cover applies to the owner-driver only. To know more, read our post on own damage cover.

Things to check when you buy

Your dealer may offer insurance at the time of purchase. You do not have to accept the first offer. Before you say yes, check:

• Your name, bike number and details are correct.
• What the 5-year third-party cover includes.
• The IDV, which is the bike's current market value as agreed with the insurer.
• Which add-ons are included, and whether you really need them.
• The own damage period and how to renew it.
• The terms of the personal accident cover.

You can compare options on our bike insurance page or get a quote.

Add-ons that suit a new bike

A new bike often benefits from extra covers, since it has high value:

• Zero depreciation: a higher pay-out on replaced parts, usually for newer vehicles.
• Return to invoice: helps if the bike is stolen or totally damaged. Terms differ by insurer.
• Roadside assistance: help if your bike breaks down.
• Key and lock replacement: for lost keys.
• Consumables cover: for small items like oil and nuts used in repair.

Read our guide on zero depreciation bike insurance before you decide.

Renewing after the first year

After the first year, you need to renew the own damage part. If you do it on time, you can start to build your No Claim Bonus (NCB). NCB is a discount on the own-damage premium, starting at 20% after 1 claim-free year. Learn more on our no claim bonus page. Use our renew vehicle insurance page when the time comes.

If you let the own damage lapse, your bike has no own-damage protection from the next minute, even though the third-party part is still running. A claim on the lapsed part will not be paid.

One last note

Rules and terms can change and differ by insurer. Always read your policy wording, because the policy document is final.

FAQs

Is a 5-year third-party cover compulsory for a new bike?

New two-wheelers usually get this long-term third-party cover at purchase. Check with your insurer or dealer for the current rule.

Do I need to renew the third-party part every year?

Not if you bought the 5-year cover. You still need to renew own damage, which is usually for 1 year.

Does the 5-year cover pay for my bike's damage?

No. Third-party cover pays for harm to others. Your own bike's damage needs own damage cover.

Can I buy insurance from outside the dealer?

Usually yes. Compare the cover and terms, and make sure the policy is valid and correct before you ride out.

This guide is for information only. Rules and policy terms can change, and the policy document is final. Please read your policy wording.