The pillion rider on a motorcycle can now claim compensation for injury under third-party insurance in case the two-wheeler meets with an accident.

The Insurance Board (IB) decided to create the provision two weeks ago after revising the directive it issued on July 16.

Third-party insurance is liability insurance purchased by an insured from an insurer for protection against claims of another party. The IB made third-party insurance mandatory for both two-wheelers and four-wheelers from last year.

After the new regulation goes into effect, the person riding pillion will be covered by third-party insurance against injury. “We have amended the previous directive to benefit the pillion rider in case the two-wheeler has an accident,” said IB Director Shreeman Karki.

As per the new rule, the next of kin of the pillion rider will receive up to Rs500,000 in case of death. Similarly, the amount of insurance coverage for the pillion rider against injury caused by an accident will be up to Rs300,000.

Karki said the board fixed the compensation amount for the passenger at the same level as for the driver of the motorcycle.

“However, if any person other than the motorbike owner has an accident while riding the vehicle, both the motorbike driver and the pillion rider will not be considered eligible to receive the compensation amount,” he said.

The third-party insurance, however, does not cover damage caused to the vehicle by the owner’s negligence. Similarly, it does not provide coverage against theft of the vehicle.

Earlier, the IB had raised the medical insurance of the injured to Rs300,000 per person from Rs5,000. The carer of the wounded will receive Rs500 daily for 45 days, up from 30 days previously. The IB has maintained third-party insurance at Rs500,000 while the insurance coverage ceiling for medical treatment has been raised to Rs300,000 from Rs200,000.

All types of vehicles, including ambulances, used to transport the wounded to the hospital will be provided Rs10,000.

The owner of a third-party vehicle facing loss due to an accident will be compensated for repairs without depreciation provision. The IB has not made any insurance coverage provision for a third person on a two-wheeler.

“Only the driver and a pillion rider of a motorbike will be provided the insurance coverage of Rs500,000,” the board said.

However, a child less than one year old will receive 25 percent of the compensation amount, while a child 1-5 years old will be provided 50 percent of the policy amount. If the treatment of an injured person is done in a foreign country, the family members concerned need to inform the insurer within a week.