A report by the General Insurance Council of India found that around 60% of the two-wheelers on Indian roads do not have a valid third-party insurance policy as required by law. This leaves millions of two-wheeler riders at risk of shouldering high financial costs in the event of an accident.
To close this gap, the Supreme Court has recently made it mandatory for new two-wheeler owners to take a five-year third-party insurance policy. However, if you are already a pre-existing bike owner with an insurance policy about to expire or already expired. In that case, a long-term bike insurance policy could be something you may want to consider for your next renewal.
A long-term bike insurance policy is where you pay the premium in one lump sum for the entire tenure, as opposed to a standard policy where you make yearly payments. The premium quantum for a long-term policy is usually higher than a standard policy but less when considering the time period. Given the criticality of the subject, we'll first detail the types of two-wheeler insurance before explaining the benefits of long-term insurance.
Types of Two-wheeler Insurance Coverage
A typical bike insurance policy usually consists of three types: a third-party bike insurance plan, a standalone own damage two-wheeler insurance, and a comprehensive two-wheeler insurance policy.
A third-party bike insurance plan only covers damages caused by the policyholder to another person, vehicle, or property. This insurance usually does not cover any damages to the policyholder's motorcycle.
A comprehensive two-wheeler insurance policy covers injuries and damages caused by the policyholder to a third party and the damage to the policyholder's bike.
A standalone own damage two-wheeler insurance covers your vehicle's financial costs in the case of an accident, regardless of who is at fault. It can also protect against vandalism, theft, and natural disasters. Standalone policies are often more expensive than adding coverage to an existing vehicle insurance policy, but they may be worthwhile if you reside in a high-accident or natural disaster-prone location.
Advantages of Purchasing Long-Term Two-Wheeler Insurance
Eliminate the Insurance Policy Renewal Hassle
People don't renew their bike insurance because the renewal process is complicated and inconvenient and must be done frequently. These days, you can easily renew your bike insurance policy online without any hassle and be stress-free for the next 3-5 years. This means you don’t have to go through the tedious process of filling out the paperwork and dealing with customer service representatives for the next 3-5 years.
Prevent Gaps in Your Two-wheeler Insurance Policy
If you drive a motorcycle without having a valid insurance policy, you could face serious consequences, such as getting arrested in extreme cases. Additionally, if your bike insurance expires, you would need to purchase new coverage and go through the same documentation and inspection process again.
You can easily avoid all of this by getting long-term two-wheeler insurance coverage. A single purchase of this type of insurance can protect you against the potentially severe consequences of being uninsured for many years.
Significant Cost Savings Compared to Yearly Policy Renewals
The IRDAI regulates prices for third-party bike insurance. Each year, the regulator usually changes the rates; the cost only increases. This means that bike insurance companies are not allowed to provide standard coverage at a price below what is set by the IRDAI. However, this also makes it difficult for consumers to find affordable coverage.
There are many benefits to getting a long-term bike insurance policy, one of which is that you will not have to pay a higher price every year. This is because you will be locking in rates for the long policy term.
No Fear of Losing the No-Claim Bonus
One of the main benefits of renewing your insurance policy promptly is that you will accumulate a no-claim bonus (NCB). This entitles you to a reduction in your insurance premium, as long as you have not made any bike insurance claim during the previous year. Typically, the NCB for the first claim-free year is around 20%, increasing to 50% if you have five consecutive claim-free years. However, if you do not renew your bike insurance policy within the required period, you could lose your accumulated NCB.
Long-term two-wheeler insurance policies, whether purchased online or offline, do not require you to keep track of your NCB each year.
Break-in Prevention
A break-in policy is a set of rules that an insurer may need to follow in case of a significant gap between the date of old and new policy purchase dates.
The main reason for having a break-in period is to allow the insurer to assess the risk associated with insuring the individual or vehicle in question. If there has been a long gap between policies, the insurer may feel that there is greater risk and may charge higher premiums. In some instances, the insurer may even refuse to provide cover.
Conclusion
As outlined above, there are many advantages to investing in a long-term two-wheeler insurance policy, including comprehensive coverage and the ability to save money over time. If you want to renew your existing policy, it is worth spending a few extra bucks upgrading to a multi-year two-wheeler vehicle insurance.
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