What Is Multi-Year Car Insurance?
Multi-year car insurance policy refers to the point where instead of providing a car insurance policy with a one-year tenure, the insurer provides coverage for a tenure up to 3 years. With a multi-year car insurance policy, the insured does not have to renew the car insurance plan every year.
However, this multi-year policy is applied to the vehicles that are purchased after 1st September 2018. Moreover, it is applied on purchasing third-party vehicle insurance only, and for a comprehensive plan, owners can still purchase the policy for one year.
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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 car insurance 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 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 people forget to renew their insurance policy on time.
Types Of Multi-Year Car Insurance
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 a comprehensive insurance policy for one year with three years of third-party liability insurance. This is one of the most recommended options.
Since the law has mandated third-party insurance cover for giving you financial protection against any accidental expenses that 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 the make and model of your car, safety devices installed in your vehicle, the purpose of your car/ bike, and the area where you are staying.
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Insurance Premium As Per Engine Capacity
Learn about the insurance premium that a policyholder has to pay for a multi-year car insurance policy as per the engine capacity of the car is listed in the table below
The capacity of the Engine
Multi-Year (Three Years) Third-Party Premium (Rs.)
Less than 1000 CC
Greater than 1000 CC but Less than 1500 CC
Greater than 1500 CC
Difference Between One-Year & Multi-Year Car Insurance
Learn about the difference between one-year and multi-year car insurance policies in the table below:
Mandatory multi-year third-party for new cars
Mandatory for every car
Once in 3 years
Lesser premium due to one-time payment for 3 years
Higher as compared to multi-years
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 the 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.
Q1: Is it mandatory to purchase multi-year third-party car insurance if I have purchased a new car recently?
Ans: Yes, as per the Supreme Court’s order, it is now mandatory for people with a recently bought car to purchase a multi-year third-party car insurance policy.
Ans: If you purchase a third-party multi-year car insurance policy then you don’t have to go through the hassle of renewing it every year and you will have to pay a lesser premium amount as compared to what you would have to pay every year in a single year car insurance policy.
Q3: When did the Supreme court make it mandatory to purchase a multi-year third-party car insurance policy?
Ans: As per the Supreme court, people purchasing a new car after September 2018 must purchase a third-party car insurance policy with a validity of three years whereas they can still choose to purchase comprehensive car insurance with one-year validity.
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#Rs 2094/- per annum is the price for third-party motor insurance for private cars (non-commercial) of not more than 1000cc
*Savings are based on the comparison between the highest and the lowest premium for own damage cover (excluding add-on covers) provided by different insurance companies for the same vehicle with the same IDV and same NCB. Actual time for transaction may vary subject to additional data requirements and operational processes.