Is 5-Year Third-Party Insurance Mandatory for All Two-Wheelers? Updated Rules & Penalties

What is the 5-Year Insurance Rule for Two-Wheelers?

Let’s first discuss how many years of insurance are needed for a new bike. The 5-year insurance for bikes is a rule under which all new two-wheelers in India must have a third-party bike insurance policy valid for five years at the time of purchase. Earlier, it was only mandatory for three years. This new rule mentions a long-term policy, thus making it more convenient for bike owners. They no longer have to renew the plan annually.

The Insurance Regulatory and Development Authority of India (IRDAI) has mandated insurers to offer these long-term covers. The premiums for the policy are decided on the basis of the engine capacity of a bike:

• Up to 75 CC: ₹538
• 75 CC – 150 CC: ₹714
• 150 CC – 350 CC: ₹1,366
• Above 350 CC: ₹2,804

What Does Third-Party Bike Insurance Cover?

Third-party bike insurance provides financial and legal coverage in case of third-party damage or loss on the road. Here’s what it typically includes:

Injury or Death

The insurance company covers the medical expenses in case a third-party person suffers injuries due to an accident. In case of the death of a third party, the compensation is provided to their family.

There is no cap on the maximum compensation for the death of a third-party person. The insurer covers the admissible costs as per the policy agreement.

Damage to Third-Party Property

If the accident has caused damage to third-party property, the insurer is responsible for the repair or replacement costs. The maximum amount of money that can be paid in the case of property damage is up to ₹7.5 lakhs.

Legal Expenses

There are several legal costs associated with raising a claim for third-party damages. In such a case, your insurer will cover the admissible expenses and support you throughout the process.

Personal Accident Cover (Owner-Driver)

Personal accident cover is also provided with the new bike insurance for 5 years. However, some insurers may provide it as an optional cover. It compensates for accidental damage to the rider.

Penalties For Riding Without a TP Bike Insurance

According to the Motor Vehicles Act, the regulations related to a valid third-party insurance are very strict. If a person rides a bike without a valid third-party bike insurance, the following penalties can be imposed:

• The punishment includes a fine of ₹2,000 in the case of a first offence
• For multiple offences, a fine of ₹4,000 is charged
• The offender may also face imprisonment of up to three months.

Limitations of Third-Party Bike Insurance

Third-party insurance also has a few significant limitations. These are:

Own Bike Damage Not Covered

Damages to your own bike due to accidents, fire, theft, or natural disasters are not covered by the third-party cover.

Personal Injury of Owner/Rider

Unless a separate personal accident add-on is purchased, injuries to you (the rider) are not covered.

No Coverage for Mechanical Issues

Breakdowns, electrical/mechanical failures, and wear-and-tear are not included.

Exclusions Based on Driving Conditions

Accidents while riding without a valid licence, under the influence of alcohol/drugs, or during racing/unauthorised events aren’t covered.

These limitations are among the reasons bike owners choose comprehensive bike insurance plans.

Benefits of Long-Term Bike Insurance

Choosing a 5-year third-party insurance policy offers numerous benefits for any bike owner. Here are some of the benefits listed below:

Legal Compliance for Longer Duration

A 5-year TP cover guarantees that the vehicle meets legal road requirements without the need to renew the cover each year. Therefore, it lowers the chance of forgetting to renew the policy, and consequently, being punished.

Cost Savings

Generally, a one-time payment covering five years is much cheaper than buying a new TP cover each year. Premiums are also quite predictable due to the stable rates fixed by IRDAI for long-term policies.

Convenience & Peace of Mind

Long-term insurance helps you avoid the anxiety of renewal dates and policy lapses. This assurance will enable you to focus on your ride's safety without being bogged down by paperwork.

Protection Against Premium Hikes

Upon purchasing the insurance policy, you will be required to pay a premium for 5 years. In this way, you will not have to worry about annual IRDAI premium increases.

Simplified Record-Keeping

By owning only one 5-year insurance for bikes, you will have fewer documents, and it will be easier for you to comply during the traffic checks.

Simply put, long-term third-party motor insurance makes owning a vehicle easier and ensures you stay protected under Indian law.

Conclusion

The implementation of the new bike insurance validity has made compliance more affordable for new bike owners. Third-party insurance is a protective measure for the insured against liabilities to third parties and not the insured bike. Hence, various bike owners also switch to a comprehensive bike insurance plan.

Riding without proper insurance is punishable in India. So, it becomes very important to be aware of your insurance cover and renew it in time. Taking a long-term insurance policy is not only a legal requirement but also a source of comfort on every journey. At Jio Insurance Broking, you can compare and choose the most suitable new bike insurance for 5 years.

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