To understand the stark difference between first party two-wheeler insurance and third party two-wheeler insurance is important. Knowing the difference prevents the failure of the contact to meet the urgencies of the consumer. It also withholds the faith and trust between the insurer and the consumer.
The Difference between the Two:
• First Party Insurance Claim:
When a first-party insurance holder claims his benefits, a claim is directly made by the insured against the insurance company in his name and the terms of the contract defines recovery entitlement. Since such contracts are settled between the policy holder and the insurance company, specific financial duties and obligations are carried by it that the insurance company is required to provide the policy holder.
First party bike insurance plans include the duty to act with faith and trust, hence is a fiduciary-holder relationship. If the insurance company fails to adhere to the terms of contract, it will be considered as a breach of contract These violations obligate the insurance company to pay penalties like treble damages or/and 10% interest stamped on the funds that were wrongfully withheld.
• Third-Party Insurance Claim:
According to a third party bike insurance claim, the “claimant” is not considered to be the insured. The claim of the claimant stands on the shoulders of the insured party and not on the insurance company. Hence, the insurance company is not under contract with claimant and is liable no duties or acts of good faith. Instead, insured owes all the duties.
This enables the insured, and not the claimant, to show act of good faith, if the insurance company fails to initiate any potential cause of action. This “cause of action” comes consideration only when the claimant (or his representation) sends a demand letter, and if the insurance company proves to be a failure in settling the claim leading to the birth of a verdict greater than the limit of policy. The judiciary considers a trial which the adjuster has failed to bring into effect with similar potential of care in settling the claim.
• Other Details:
A two-wheeler insurance policy covers one financially against damages that is caused to one’s bike or scooter and injuries that one had to suffer from, during unforeseen events like thefts or accidents or natural disasters. Bike insurance policies also cover one against financial liabilities that arise from injuries or damages that has been caused to third-parties in case of accidents. Two wheeler insurance policies provide financial protection against setbacks that dent one’s financial condition.
• Distinguishing Points:
1. First party insurance covers the insured policy holders for personal damages and losses. The policy holder might be an individual or a company of any person belonging to such a particular class who might be an employee of a company or a family of the named insured or even an occupant of a vehicle. The types include:
- Coverage for personal injury protection to an automobile insurance policy,
- Health insurance,
- Coverage for medical payment in case of an homeowner’s or automobile policy,
- Uninsured or underinsured motorist coverage belonging to an automobile policy,
- Personal or business property being Covered due to damage from wind, storm, hail, fire, flood, or other disaster.
2. Third-party insurance provides protection for the named policy holder to stand against the liabilities under damage and losses that are caused to another person or their property by the named insured who can be any one as already discussed in case of first party insurance. The examples include:
- Coverage for liability insurance in an automobile policy,
- Coverage for general commercial liability,
- Liability coverage to homeowner in case of personal injury caused by the insured,
- Umbrella insurance policies,
- Commercial motor vehicle liability coverage,
- Animal or canine liability insurance,
- Professional liability insurance,
- Public liability insurance,
- Product liability insurance,
- Directors’ and officers’ liability insurance.
Getting insurance for your bike or scooter has become easier these days as one can apply for a two-wheeler insurance online like they allow in a Bajaj Allianz, from home. Buying or renewing one’s insurance has hence become hassle-free with the customer-friendly policies and procedures.