What is the Difference Between Third-Party Cover and Own-Damage Cover in Bike Insurance?

When you start looking for a new bike insurance policy, one of the first things that you need to determine is the type of coverage you need. While a third-party insurance policy is mandatory in India, you have the choice to opt for an own-damage policy that includes damages to your vehicle too. Riding a two-wheeler is risky in a country like India, with heavy traffic and narrow roads. While riding safely is a must, accidents cannot be predicted. Hence, choosing the right coverage is important to ensure that the bike insurance policy offers protection against financial losses arising from such mishaps in the future.

Today, we are going to compare third-party and own-damage covers in bike insurance to help you make an informed decision.

What are third-party and own-damage covers?

When you buy a bike insurance policy, there are three parties involved:

  • The First Party – You and your insured two-wheeler
  • The Second Party – The insurance company offering the coverage
  • The Third Party – The person who files a claim against the First Party for damages caused to self or property

As a bike owner, you need to mandatorily have a cover for all claims arising from a third-party due to an accident or a mishap involving your vehicle. This is a third-party cover.

The third-party cover does not offer protection against damages or losses to your vehicle. This is where an own-damage cover is needed. This is also known as first-party bike insurance. It offers financial protection against damages or losses to your bike or yourself due to an accident, collision, theft, natural disasters, and man-made disasters.

You also have the option of purchasing comprehensive insurance for a bike that includes both third-party and own-damage liabilities.

Difference between third-party and own-damage cover

  Third-party Cover Own-damage Cover
What is it? A mandatory cover according to the Motor Vehicles Act, 1988 managing financial losses to a third-party property or person(s) caused by an accident or collision involving your vehicle. Riding your bike without this cover is a punishable offence. An optional cover that offers protection against damages or losses caused to your bike arising from an accident or collision, theft, earthquakes, floods, cyclones, riots, terrorist activities, etc.
Premium The premium of a third-party cover is mandated by the Insurance Regulatory and Development Authority of India (IRDAI). For two-wheelers, the premium rates are:

●        Rs 482 for bikes less than 75cc

●        Rs 752 for bikes between 75cc and 150cc

●        Rs 1193 for bikes between 150cc and 350cc

●        Rs 2323 for bikes more than 350cc

The premium of an own-damage cover is determined by a range of factors including:

●        The make and model of the bike

●        Year of manufacture of the bike

●        It’s engine capacity

●        Your personal details

●        No Claim Bonus if any

●        Deductibles

●        Add-ons

●        Safety equipment installed by you, etc.

Add-ons Since this policy offers protection against third-party liability alone, the only add-on available is a personal accident cover. Own-damage policies offer a range of add-ons like zero depreciation, return to invoice, consumable expenses, roadside assistance, engine protect, tyre protect, etc.
When should you buy it? This is a mandatory policy. Hence, you need to buy this regardless of the age of your bike or usage. You can opt for an own-damage policy if your bike is new and/or you use it regularly or ride through congested and accident-prone areas.
Cost Third-party policies are cheaper than own-damage policies since they cover damages or losses due to accidents or collisions only. Own-damage policies are costlier than third-party policies since they cover damages or losses due to accidents, collisions, theft, natural disasters, and man-made disasters. Also, the add-ons offer a range of benefits that come at a cost.


As you can see, an own-damage policy, though optional, offers protection against a wide range of risks as opposed to a third-party policy. While a third-party cover is mandatory, most bike owners purchase both these policies or opt for a comprehensive policy that combines their benefits. Before buying a policy, it is important to assess your use of the bike and know the risks that it is exposed to. Based on your assessment, consider an own-damage cover.

Summing Up

Remember, a two-wheeler insurance policy is about protecting yourself financially against potential losses due to unforeseen events. When you ride your bike, an accident or collision is a possibility. By analyzing your use and condition of your vehicle, you can determine the kind of coverage you need. Once you are clear about that, get online, and research the options available to you. Compare insurers and policies and try to find the one that is best suited to your needs and is not heavy on your pockets. Also, ensure that you read the policy wordings carefully and know the exclusions of the coverage. Look at the claim settlement ratio and process too. Good Luck!