Is Bike Insurance Mandatory for 5 Years?

Amid the rising number of road accidents from uninsured two-wheelers, the Insurance Regulatory Development Authority (IRDA) made least 5-year bike insurance policy mandatory for all the newly purchased vehicle. Read ahead to know all about a 5-year two-wheeler insurance policy.

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Significance of a 5-year Bike Insurance Policy

When you buy a new two-wheeler, it is mandatory to get a 5-year bike insurance policy which includes 5-years third-party plan + 1-year own damage cover. Considering the rise in the number of accidents from two-wheelers, IRDA made it effective from 1st August 2020. The primary objective of this initiative was to ensure that more numbers of two-wheelers are insured to lower the number of lapsed or expired bike insurance policies.

Remember that a 5-year bike insurance cover is mandated only for third-party (TP) bike insurance policies. If you have bought a brand new bike or scooter, it will be compulsory for you to opt for a 5-years third-party liability cover. However, if you are planning to buy comprehensive bike insurance for your new vehicle, then the policy tenure will be of 3 years instead of 5 years.

How Does 5-year Bike Insurance Policy Work?

The 5-years bike insurance policy is similar to any other long-term motor insurance policy. In this, you get third-party liability coverage for 5 years and own-damage coverage for 1 year.

Benefits of a 5-year Bike Insurance Policy

The Insurance Regulatory Development Authority of India (IRDA) has given the green signal to 5-year motor insurance policies. Over the past few years, several general insurance companies have launched this policy for the public which helped them further to address the problem of non-renewal.

The following are the benefits of buying a five-years two-wheeler insurance plan-

  1. You can save more

    The annual bike insurance premium of a long-term policy is always lower than that of a short-term policy. As a result, you get to pay a lower premium for your 5-year third-partymotor insurance policyalong with 1-year OD cover.

  2. No worries for annual policy renewal

    Since your two-wheeler insurance policy is valid for 5 years, you do not have to worry about remembering the annual renewal dates. Furthermore, it lowers the risks of being caught by the cops for carrying lapsed or inactive bike insurance. In simpler terms, long-term bike insurance policy is a perfect deal gives assurance on all aspects i.e. annual renewal, financial protection, and third-party liability coverage.

  3. No Claim Bonus

    No Claim Bonus or NCB is a discount that you get on your own-damage premium renewal for not making a single claim during the policy period. Hence, you earn a benefit during policy renewal for the next year's premium for every claim-free year.

    The simple rule for an annual vehicle insurance policy is that you will lose the accumulated NCB totally, if you make a single claim during the policy period. However, in the case of 5 years policy or a long-term bike insurance policy, your NCB does not become nil and void. The NCB discount reduces to the previous year's percentage slab, and ultimately you still receive the benefit of a No Claim Bonus.

    You may also read How is NCB Calculated in Bike Insurance

  4. Continuous protection

    Whenever you are buying a vehicle insurance policy, it is crucial to find a plan that provides total and continuous protection to the bike against damages and losses. Your insurer cannot promise continuous coverage until you do not possess a 5-year bike insurance policy.

5 Things to Keep in Before Opting for Bike Insurance Policy

Before making the payment for your bike insurance policy, make sure you look at these points-

  1. Know your requirements

    Before buying bike insurance, you have to gauge your requirements. You can start this by knowing the engine capacity of your bike, the age of the bike, the usability of your bike, your location, etc. All these factors help you in deciding the right insurance coverage for you.

  2. Know your driving habits

    Knowing your driving habits will assist you in analyzing your risk profile. For high-risk drivers, it is recommended to opt for an add-on cover like NCB protection. It will not affect the accumulated bonus even if the person has raised a bike insurance claim. Note that you can only buy any type of add-on cover when you have a comprehensive bike insurance policy.

  3. Find everything your budget

    Do you know comprehensive bike insurance is customizable? Yes, when you opt for a comprehensive policy, you can easily select the IDV (Insured Declared Value) of the bike. This will help you in finding a perfect plan for your budget. However, you must choose an ideal IDV to get the right payout amount when it is a case of theft or total loss of the insured bike.

  4. Deductibles

    In the insurance industry, there are two types of deductibles- compulsory and voluntary. You can increase your voluntary deductibles to decrease the bike insurance premium. By doing so, you will have to pay a part of the claim amount from your own pocket in case of damages caused to your insured bike.

  5. Choose bike insurance online

    Similar to any other commodity, you can also buy bike insurance online. On the internet, you will get insurance quotes from low to high-priced. Also, you get convenience as you buy it in the comfort of your home. Furthermore, you don't have to pay for an agent's commission to buy the desired coverage, which you have you pay when you buy a policy offline. Therefore, the buying process is transparent, time-saving, and economical.

  6. Compare bike insurance plans

    Buying bike insurance online is not enough to get the best deal. You have to compare several insurance plans before making the purchase. For this, you can visit the official website of Policybazaar Insurance Brokers Private Limited.

    Here you will find multiple plans offered by 20+ insurers. Moreover, you will get an idea about what kind of coverage is made for you and at what cost. It is advised to compare the bike insurance plan based on the benefits, inclusions & exclusions, additional covers availability, price of the plans, etc.

Over to You!

Despite two-wheeler insurance being mandatory, the hiked number of uninsured bikes on the roads has become a serious concern. People either don’t buy automobile covers in the first place or even if they do, they don’t renew them from time to time. It is better to get 5-years bike insurance online to enjoy uninterrupted financial protection along with peace of mind by saving you from the hassle of renewing your policy every year.

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Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

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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