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A Detailed Guide about Long Term Two Wheeler Insurance
If you possess a two-wheeler, you must be well aware that as per the Motor Vehicle Act, 1988, it is mandatory for your vehicle to be insured with a third-party liability cover.
But, here comes the caveat!
In India, about 75% of the total number of two-wheelers on the road DO NOT have any valid insurance cover. Shocking, right? Well, considering the fact that most riders overlook the significance of insuring their bike when rolling the vehicle out of the showroom, these figures are not that surprising.
However, to address the issue of non-renewal of policies, insurance providers across the country have introduced multi-year or long-term two-wheeler insurance policies. At first, these multi-year insurance policies were launched for a term of 3 years. Now, they can also be extended for up to 5 years.
Below is an elaboration on the benefits of purchasing bike insurance for 3 years and why it is advisable for you to do so.
What Does Two-Wheeler Insurance for 3 Years Mean?
A two-wheeler insurance for 3 years frees vehicle-owners from the necessity of renewing their insurance policy every year.
The Insurance Regulatory and Development Authority (IRDA) has extended this facility of multi-year insurance policies for standalone third-party liability covers and the ones combined with own-damage covers for two-wheelers.
What do these entail?
Third Party Liability Cover
This insurance policy covers the liabilities arising from bodily injury or death of a third person or any damage to a third-party vehicle, caused by your two-wheeler.
Own Damage Cover
Covers liabilities arising from any loss or damage caused to your own vehicle, either natural or man-made.
You can also avail a 3 year insurance policy for two wheelers as a bundled policy, including 3 years of third-party liability cover+ 1 year of Own Damage Cover.
As for comprehensive three-year insurance covers, these can be availed only for two-wheelers that have been purchased after 1st September 2018.
Know more about Comprehensive Two Wheeler Insurance.
What Will be your Premium for Two Wheeler Insurance for a 3 Years Policy?
The premium for a 3-year two-wheeler insurance covers is calculated as three times the annual third party premium payment. You will have to make this payment in a single instalment. You should remember that:
- This premium amount cannot be negotiated or revised during the entire 3-year policy duration.
- If you have standalone 3-year third-party insurance, it cannot be cancelled during the policy-term (except in case of the total loss of vehicle). In the case of the total loss of vehicle, the premium paid for unexpired years will be refunded.
This premium payment system is especially beneficial for policyholders because it saves them from the annual premium rate hikes imposed by insurance providers.
On the flip side, it is also advantageous for insurance providers as it allows them to collect the premium for 3 years at one go, allowing them to save on administrative charges.
Apart from this, there are a plethora of other reasons why two-wheeler insurance for 3 years is beneficial for vehicle owners.
Take a look!
Premium Calculation for Long Term Two Wheeler Insurance
Premium Amount (OD+TP) GST excluded
Benefits of Availing a Long Term Two Wheeler Insurance for 3 Years
The two-wheeler insurance for 3 years offers several benefits over the regular ones. Below we have listed the most significant ones among them to make it easier for you to choose one:
1. Avoiding Non-Renewal Implications
The period between the LAPSE of your insurance policy and its RENEWAL can expose you to several risks. For example, a hefty fine due to traffic violation as well as financial liabilities from any accident during the period can lead to huge losses.
With bike insurance for 3 years, you can reduce these risks to quite an extent, at least for 3 years of the policy term.
In most cases, two-wheeler owners forget about renewing their insurance policies after their 1-year policies have expired. With the 3-year plans, you can actually forget about renewing your policy for 3 years without repercussions.
That is why these plans are much more convenient because they curb the necessity of renewing your third-party insurance policy annually.
3. Less Expensive in the Long Run
With a 3-year insurance policy, you will have to make the premium payment for 3 years at once. But in lieu of this lumpsum expense, you will be saving quite a lot on your premium payments, in the long run.
This is because insurance providers revise and impose a hike on the premium rates for their insurance policies annually. Due to inflation, this hike in premium rates can go up to 10-15%.
If you have a 3-year policy in place, you can save yourself from paying higher premiums until the time the policy expires. This way, your policy becomes a lot cheaper in the long run.
4. Avail High IDV
The Insured Declared Value or IDV of is the total sum assured promised by an insurer against total loss of a vehicle.
IDV is given by = the manufacturer’s registered price – the vehicle’s depreciation. The value is revised when you renew your insurance policy by taking your two-wheeler’s depreciation into account.
Now, when you avail a 3-year insurance policy, your IDV remains unchanged for the term of those three years, allowing you to avail a higher sum assured against total loss of your vehicle.
5. High No Claim Bonus
No Claim Bonus is the discount you can avail on the premium paid for your insurance policy if you have not made any claims in the previous year.
With three year two wheeler insurance policies, you can enjoy an advantage on your No Claim Bonus over single-year policies.
For example, if you have a 20% NCB from your previous policy when you avail a 3-year policy, this 20% NCB will be applicable on the premium you pay for all 3 years.
Further, few insurance providers also offer a higher NCB at the end of their long term policies as compared to single year policies to boost the policyholders’ incentives in this regard.
6. Lucrative Discounts
In an effort to urge more two-wheeler owners to consider long-term insurance policies, insurance companies offer attractive discounts on the same. These discounts can make availing the insurance cover quite advantageous for vehicle owners.
7. Break-In Policy for Insurance Renewal
Sometimes a gap between your insurance renewals can warrant an inspection of your two-wheeler from insurance providers before they agree to renew your policy. This is known as a break-in policy and can subsequently lead to the higher premium payment.
When you avail a 3-year long term insurance policy, you can avoid break-ins with your policy and subsequently carry on without any extra addition to your premium.
With such benefits and more, these multi-year two-wheeler insurance policies are a much better option when it comes to safeguarding yourself from unforeseen financial risks involving your two-wheeler.
Since most of the leading insurance providers in India have welcomed this move of IRDA with regards to the implementation of long term insurance covers, you can avail several options of the same to choose from.
So quit stalling! Get your two-wheeler insured under a 3-year policy today!