Multi-Year Car Insurance
As per the order of the Supreme Court, the Insurance Regulatory and Development Authority of India (IRDAI) has mandated for all the general insurance providers of India like National Car Insurance Company to offer multi-year third-party insurance to the vehicles that are sold after September 1st of 2018. In other words, we can say that rather than offering single year third-party insurance policy, the insurance providers will have to offer three years insurance coverage to the cars and five years insurance plan to the two-wheelers.
This is one of the greatest moves of the insurance industry as it will provide long-term insurance coverage to the vehicles, cut-down the count of non-insured cars and bikes on the Indian roads, and save the customers from the hassle of yearly insurance renewals. However, this multi-year policy is applied to the vehicles that are purchased between 1st September 2018 and 31st March’2019. Moreover, it is applied on purchasing the third-party vehicle insurance only, and for comprehensive plans owners can still purchase the policy for one year.
Now let us know about the premium that a vehicle owner has to pay from now onwards as per this new rule of multi-year insurance policy. Mentioned below is the table for the same:
|The capacity of the Engine||Multi-Year (Three Years) Third-Party Premium (Rs.)|
|Less than 1000 CC||5,286|
|Greater than 1000 CC but Less than 1500 CC||9,534|
|Greater than 1500 CC||24,305|
|The capacity of the Engine||Multi-Year (Five Years) Third-Party Premium (Rs.)|
|Less than 75 CC||1,045|
|Greater than 75 CC and Less than 150 CC||3,285|
|Greater than 150 CC and Less than 350 CC||5,453|
|More than 350 CC||13,034|
Hopefully, the explanation till now has given you a rough idea about the multi-year third-party vehicle insurance rule given by the Supreme Court of India. Further, as per the order of the Supreme Court, you will be given the below mentioned three options for your vehicle insurance when you are purchasing a brand new vehicle:
- Option one: You can buy only a third-party liability insurance policy for three-years.
- Option two: You can purchase a comprehensive insurance plan for three years, which will be very expensive and not recommended.
- Option three: You can purchase comprehensive insurance policy for one year with three years third-party liability insurance. This is one of the most recommended options.
Even though you do not have a choice than paying more premiums on your vehicle insurance due to this multi-year insurance policy, but this rule also has some benefits. Let us discuss them.
Benefits of Multi-Year Third-Party Vehicle Insurance
The common benefits that you get with multi-year third-party vehicle insurance are:
- No-Need to Rush for the Insurance Renewal Every Year: Even though you have to pay more premium but you are paying it collectively for three/five years. This means you do not have to pay the premium of your third-party insurance policy for three to five years depending on your vehicle. Since you have paid the premiums in advance, you need not worry about renewing the insurance policy every year. All you have to do is to pay the premium once and get the freedom from the renewal of your policy for three to five years as per your vehicle.
- You Can Easily Port Your Insurance Provider: Taking an insurance plan for three or five years does not mean that you have lost all the hopes to change your insurance provider for this tenure. This rule or plan gives you full flexibility for porting your insurance provider to get better coverage and the best deals like the deals offered on National Insurance Car renewals.
- Beat the Price Hike on Third-Party Insurance: The Indian government increases the rates of the third-party insurance in every financial year. However, as you have paid the premiums for your insurance policy in advance, you will not have to worry about it. You do not have to pay extra money for this hike.
- Lesser Uninsured Cars/ Two-Wheelers on Indian Roads: The number of uninsured vehicles on the roads of India will for sure decrease. This is because most of the people forget to renew their insurance policy on time.
The actual impact of this move will be clearer only in the days to come, but some of the reasons due to which the Supreme Court of India has mandated it are explained here:
Why Multi-Year Third-Party Insurance?
- A third-party insurance policy for vehicles offers cover for damages and losses caused to the life or property of any third-party because of the vehicle that you own. Therefore, it offers financial protection to you against the losses caused to a third-party.
- A multi-year insurance plan ensures you that you are protected for a long term without any complications.
- It also provides you protection against legal liabilities incurring because of the death, injury, or damage caused to a third-party.
- A third-party insurance policy for multiple years is more affordable and cheaper than purchasing the same plan every year.
It must be clearer to you that a third-party insurance cover does not offer any protection to your own vehicle and for the same you have to buy a comprehensive insurance plan.
Since the law has mandated third-party insurance cover for giving you financial protection against any accidental expenses occurred to third-party, thus for covering your own vehicle against any loss or damage you must take a comprehensive insurance plan. For this, you can opt for any of the above-mentioned options.
The premiums of the comprehensive plans depend on various factors such as make and model of your car, safety devices installed in your vehicle, purpose of your car/ bike, and the area where you are staying.
So, if you have any plans of purchasing a new car or bike, then be ready to shed some extra money in taking multi-year third-party insurance with your vehicle. While many of you would argue or disagree over the requirement of this move, but it will certainly improve the count of insured cars and bikes plying on the roads of India.
Note: This is your car’s recommended IDV as per IRDAI’s depreciation guidelines.asdfsad However, insurance companies allow you to modify this IDV within a certain range (this range varies from insurer to insurer). Higher the IDV, higher the premium you pay.Read More