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All You Should Know About Multi-year Car Insurance

By Vikas Chandra Das
21 July 2022, 11:46 AM

A multi-year insurance policy is a boon to all insured policyholders, offering them a chance to secure their interests for a period of 3 years at a stretch, and saving them from the hassles of yearly car insurance renewals. Read on to know the benefits that this recent policy innovation has to offer!

Coverage Options for Multi-year Policies

The concept of multi-year insurance gained legitimacy with the order of the Hon’ble Court of India and thereafter, the IRDAI made third-party multi-year insurance mandatory. There are many types of multi-year policies that different car insurance companies offer. They are as follows -

#1 Long-term comprehensive policy

Extensive coverage of the car can be ensured by purchasing a multi-year own damages policy. The premiums will be slightly higher, however, the benefits offered will be comprehensive and ideal for giving a 360 degree of protection to your car.

#2 Long-term TP short-term OD

Under this policy, you can apply for long-term third-party insurance along with  own damage cover for a shorter time period, namely one year. This may be opted in to reduce premium payments. Owing to its flexibility, the own damages cover may be renewed for the subsequent years too.

#3 Long-term Third-party coverage

This option ensures only third-party car insurance coverage with no protection for damages caused to the insured’s car or personal injury to the insured himself. Though this policy cover would require the lowest premium, the coverage is also far lesser than the aforementioned two policies.

There is no option of doing away with the third party insurance cover as it is mandatory as per the Motor Vehicles Act, 1988. Not getting one is a punishable offense and can attract imprisonment and a fine. As per the latest rules, the purchase of multi-year third-party insurance is mandatory for all new vehicles. This policy can be applied to all the vehicles purchased from 01.09.2018.

How Much Should I Pay for My Long-term Third Party Only Car Insurance Policy?

The capacity of the EngineMulti-Year (Three Years) Third-Party Premium (INR) for FY 2019Multi-Year (Three Years) Third-Party Premium (INR)  for FY 2020
Less than 1000 CC5,2865,286
Greater than 1000 CC but Less than 1500 CC9,5349,534
Greater than 1500 CC24,30524,305

The rates have remained unchanged.

Benefits of Multi-year Motor Insurance When Compared with Insurance that Must be Renewed Each Year

  • No hassle of renewing each year

The insured is free of renewal of the policy for a period of 3 years at a time, providing them some respite from following mundane and time-consuming procedures, such as vehicle inspection and the like, again and again.

  • You can escape the 20-30% price hike

The premiums for third-party insurance are usually revised on a yearly basis by the government. This can be quite expensive in the long run. With this multi-year insurance policy, the premium hikes can be considerably saved.

  • NCB for multi-year

The accumulated No Claim Bonus can be transferred in case of purchase of a new car or a new car insurance cover. It is pertinent to note that you have the option of changing your insurer during the three-year term too. In a multi-year policy, the NCB can be enjoyed till the validity of the policy, regardless of whether a claim was made during the tenure of the policy. Suppose, if you have an NCB of 35%, you can avail it for all the 3 years. 

  • Cancellation is easy

Cancellation of the policy is also relatively easier especially if the policy has been purchased online.

  • Discounts apply

Since purchasing multi-year car insurance may create a slight hole in the pocket, the insurance providers may offer attractive discounts. In circumstances where the insured is a member of the recognised automobile association or a special needs driver or an individual who has an anti-theft device on the car, then the premium might be reduced further. In fact, insurers such as Bajaj Allianz, ICICI Lombard, and more give discounts ranging from 2%- 6%.


The multi-year insurance policy presents a win-win situation for the insured as well as society in general as there will be fewer uninsured cars on the road. Coupling this multi-year third-party insurance policy with an own damages policy will offer excellent benefits to the insured. One must exercise due diligence before purchasing a policy and compare various policies before making that final decision. It is always prudent to couple a multi-year third-party policy with an own damage cover in order to provide holistic protection to your prized possession! 


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