The Motor Vehicles Act, 1988 has mandated the purchase of third-party insurance for every vehicle. However, two-wheeler insurance policies are renewable annually, which makes most vehicle owners forget or neglect the renewal, leaving them uninsured.
As per the General Insurance Council’s report, nearly 60% of the two-wheelers in India are running without a valid insurance policy. Thus, several bike owners are at financial as well as legal risks. To address this issue, the Supreme Court has mandated long-term bike insurance for new two-wheelers so that they remain insured for longer periods.
Two-wheeler owners can get their vehicles insured with long-term bike insurance to avail the following benefits:
As third-party insurance is regulated by IRDAI (Insurance Regulatory and Development Authority), insurers cannot sell it at a higher price. However, the regulatory body hikes the insurance premium by 20% annually. Buying a long-term bike insurance policy allows you to pay the same premium for 5 years without any price hike. So, you can save on your insurance premiums, where annual renewals attract a 20% hike on premiums every year.
Having bike insurance for longer terms protects your No Claim Bonus from the hassles of minor claims or missed renewals. Thus, your safe riding habits offer continuous rewards to you in the form of discounts on premiums.
Your long-term policy maintains your NCB even if you forget a renewal date, providing you with continuous savings and peace of mind. Those who prioritise stability and long-term cost-effectiveness in their insurance plan may particularly benefit from this feature.
From September 2018, the purchase of long-term third-party bike insurance policies has been mandatory for every two-wheeler owner. Thus, purchasing this policy allows the bike owners to meet legal requirements and covers them financially against the losses and damages incurred in an accident.
Two-wheeler owners often avoid renewing their bike insurance policy due to the hassles of the renewal procedure. Renewing insurance every year involves loads of paperwork and time, but if you purchase a long-term policy, you can avoid these hassles for 2-5 years. So, you don’t need to renew the policy every year.
One significant benefit of long- term coverage is the ability to terminate at any time, which gives you the flexibility to reevaluate your insurance requirements and provider options without incurring penalties. You can terminate your long-term plan without losing the full premium if your situation changes or you find a better offer elsewhere.
This is a low-risk investment in your safety because most insurers will reimburse the cost for the unused period. For people who appreciate flexibility alongside the advantages of long-term coverage, this flexibility is ideal.
Purchasing long-term bike insurance eliminates the need for annual renewals and possible price rises while offering comfortable protection for two, three, or five years. Make sure to assess your needs and check the advantages and disadvantages while selecting long-term bike insurance.
Disclaimer: This article is published in association with Indus Insurance and not created by TNM Editorial.