In India, the maximum percentage of uninsured vehicles has been two-wheelers. One of the main reasons for this was because only one-year insurance policies were being provided for two-wheelers, till recent times. Last year, the Insurance Regulatory and Development Authority of India (IRDAI) gave the go-ahead to insurers to provide long-term policies for two-wheelers for a maximum of 3 years, to solve this issue.
So are there any additional benefits in investing in long-term insurance for two-wheelers?
Advantages of Long-Term Two Wheeler Insurance
Policyholders can avail of discounts on two-wheeler long-term motor insurance. Since insurers are able to save on administrative costs through long-term plans, they provide various discounts and incentives to customers. This is over and above the underwriting benefits provided and the no-claim bonus. When it comes to motor insurance, while third party liability insurance is mandatory by law, own damage insurance is optional. Insurers like New India Assurance are also offering upfront discounts for own damage insurance with their three-year third-party insurance policies.
Long-Term Two Wheeler Insurance Renewals
Having to renew a policy every two or three years is much more convenient than having to renew it on a yearly basis, more so if one has more than one policy. If a policy lapses, the policyholder has to go through many hassles to have the policy renewed. If there should be an accident after the renewal date has passed, then the policyholder can’t make a claim either.
Furthermore, the insurer might insist on having the vehicle inspected before renewing the policy or issuing a new policy. What’s more, you might have trouble finding an insurer willing to provide cover for your car, if lots of time has passed since your policy has lapsed. The threat of such complications arising if you havelong-term two wheeler insurance coverage is far less.
Premium Rates for Long-Term Two Wheeler Insurance
Premium rates for third-party insurance have been increasing every year. IRDAI hikes third-party liability cover premiums by 20% every year. If one had to purchase long-term motor insurance, their premiums would not change within the three years of their policy.
No claim bonus
Long-term two-wheeler insurance policies have an added advantage over short-term policies when it comes to the no claim bonus (NCB), as seen in the case of some insurance policies. An NCB is a discount provided to the policyholder for the next year of the policy, if they have not made any claims during the previous year.
The no-claim bonus slabs for long-term two wheeler policies are more favourable than those of short-term policies. For example, ICICI Lombard provides a first-time customer the same NCB discount they have earned with their previous policy. So if they have earned an NCB of 30% with a previous insurer even, in the previous year, ICICI Lombard will provide them the same bonus when they purchase their first long-term policy.
Also, some long term policies might offer a higher NCB at the end of a 3 year policy as opposed to the cumulative individual NCB at the end of three years, in the case of short-term policies.
Cancellation/Termination of Long Term Two Wheeler Insurance policy
Some insurance companies also provide policyholders refunds in certain cases where a policy is terminated or cancelled. For example, in the case of loss or theft, ICICI Lombard provides a refund up to a certain percentage of the premium for the full unexpired years in their long-term policies – a benefit not provided with single-year policies.
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^The renewal of insurance policy is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. Actual time for a transaction may vary subject to additional data requirements and operational processes.
^The buying of Insurance policy is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. Actual time for transaction may vary subject to additional data requirements and operational processes.
#Savings are based on the comparison between 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.
*TP price for less than 75 CC two-wheelers. All savings are provided by insurers as per IRDAI-approved insurance plan. Standard T&C apply.
*Rs 538/- per annum is the price for third party motor insurance for two wheelers of not more than 75cc (non-commercial and non-electric)
#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.
*₹ 1.5 is the Comprehensive premium for a 2015 TVS XL Super 70cc, MH02(Mumbai) RTO with an IDV of ₹5,895 and NCB at 50%.
*Rs 457/- per annum (1.3/day) is the price for the third-party motor insurance for private electric two-wheelers of not more than 3KW (non-commercial). Premium is payable on an annual basis