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All You Need to Know About Multi-year Two-wheeler Insurance

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

Generally, two-wheeler insurance plans are intended for a policy term of one year. These plans need to be renewed at the end of the policy year. A multi-year two-wheeler insurance plan is a one-of-a-kind insurance product. This plan ensurers two-wheelers are protected for a maximum of three years with a single premium payment. You don't need to renew the two-wheeler insurance policy every year. 

Highlights of Multi-year Two Wheeler Insurance 

Third-Party Liability Cover: Under a multi-year insurance plan, you will be protected against damages and losses arising out of any unforeseen accident caused to a third-party person or property by the insured vehicle. 

Own Damage Cover: In case of damages to the insured vehicle, due to an accident, a multi-year insurance cover also provides a safety net. Moreover, it keeps you financially secure against burglary or theft and other unexpected damages due to riots or strikes and other natural calamities. 

Personal Accident Cover: In case of death or total disability suffered by the owner, a multi-year insurance cover provides a compensation amount to the nominee. This ensures that financial protection is not limited to the owner alone but also the dependent family. 

Personal Accident Cover for Pillion rider: If you frequently travel with your family member as a pillion rider, you can secure a personal accident cover for them by paying a little extra premium amount. This ensures the pillion rider is also financially secure with a personal accident cover, in case of an accident.

Cashless claims PAN India: The cost of repairing right after a sudden accident can be a financial burden. Under multi-year two-wheeler insurance, you can fix your two-wheeler for free at any of the network garages approved by your insurance provider. 

Fast Claim Settlement Process: A multi-year two-wheeler insurance plan has no agents and the entire process is online. This indicates that your claim approval and documentation will be done almost instantly using your mobile phone. Additionally, you will also be provided with a unique Claim Reference Number (CRN) which will help you track your request.  

Easy transfer of two-wheeler insurance: If you are not satisfied with the coverage offered under a multi-year two-wheeler insurance plan, you can transfer your insurance plan from one insurance provider to the other. The process is straightforward and usually takes 15 working days.

Insured Declared Value (IDV) in multi-year Two Wheeler Insurance 

The market value of your two-wheeler is defined as the Insured Declared Value (IDV). Your two-wheeler’s IDV would remain unchanged in both a multi-year plan as well as a single year plan. Your two-wheeler’s Insured Declared Value (IDV) is the maximum amount that you can claim if your two-wheeler is stolen or suffers complete damage. This amount is fixed on the basis of the manufacturer’s market selling price. It is important to remember that as the vehicle ages, its Insured Declared Value (IDV) also reduces. 

The following table compares the decline of IDV with every passing year:

Age of the two-wheeler (in years)Insured Declared Value (IDV) (in %)
Up to 6 months95%
6 months - 1 year85%
1 year - 2 years80%
2 years - 3 years70%
3 years - 4 years 60%
4 years - 5 years 50%

No Claim Bonus (NCB) in Multi-Year Two-Wheeler Insurance 

A No Claim Bonus (NCB) is a percentage discount offered to safe drivers with no history of claims during their policy term. 

In a multi-year two-wheeler insurance plan, your No Claim Bonus (NCB) is not considered annually. This means you have the opportunity to claim for a higher discount. 

Let’s understand this better - Imagine you are entitled to 30% NCB at the time of your next renewal. Under a multi-year policy, 30% discount will be applied to the premium amount of all 3 years. If you do not file for a claim during the 3 years of the policy term, you will be awarded a higher No Claim Bonus (NCB). 

Moreover, in the case of single-year plan, you can risk losing the NCB (30% discount) as soon as you file for a claim. An additional benefit of the multi-year plan is that you will not lose your No Claim Bonus (NCB) with a single claim.

Advantages of multi-year Two Wheeler Insurance 

  • Save up to 40% on premium amount: Over the last few years, it was noticed that IRDA increased the Third Party premium amount by 20%. Having multi-year insurance helps you avoid this premium hike. Although you will need to a little extra up front, a single premium amount is valid for the entire policy term of your multi-year two-wheeler insurance plan.
  • No issue of renewal: Under a multi-year plan, you will not need to worry about renewing your plan every year. Depending on the type of plan you select, you can renew your two-wheeler insurance after two or three years.
  • Long-term Protection: Under a multi-year plan, you can ride safely knowing your vehicle is financially protected. Both Third-Party liabilities as well as Own Damage cover is valid for the entire policy term.
  • Easy Cancellation: If you are not satisfied with the coverage offered under a multi-year insurance plan, you can easily cancel it at any time. You will receive the percentage of the premium amount for all the unexpired years of your multi-year plan. The refund depends on the utilized policy period and may vary depending on the insurer.
  • Discounts: In order to promote long term investments, most insurance providers offer discounts on multi-year two-wheeler insurance policies. This will further reduce your Own Damage premium amount.


1. How much can I save on premiums, if I choose a multi-year policy?

The premium for two-wheeler insurance is modified each year. As confirmed by IRDAI’s, there is about a 20% hike with each passing year.  If you choose a multi-year two-wheeler insurance plan, the premium for your policy term (max 3 years) will be the same. So, you will easily save 20% per year. Most insurers also offer an exclusive discount for long term investment plans. However, these discounts vary depending on the insurance provider and the plan.   

2. Can I change my insurer before the multi-year policy term is complete?

If you wish to change your insurance provider before the end of your term, you can do it without any hassle. You only need to put in a request to leave your existing plan and purchase another one. The premium amount will be deducted depending on the utilization and the rest will be refunded to you.

3. What will be my No Claim Bonus (NCB) at the end of my multi-year policy term?

A few insurance providers lock the No Claim Bonus (NCB) for the policy term. This indicates  that if you qualifiy for NCB of 30%, an equivalent discount will be applied on every year of your policy term. However, this policy varies from one insurer to the other. So it is best to check for the terms and conditions before buying. 

4. What will happen to my No Claim Bonus (NCB) if I file for a claim during the multi-year policy term?

Unlike single year plans, in a multi-year two-wheeler insurance cover, your No Claim Bonus (NCB) will never be reduced to zero. Moreover, if you do not file for any claims, some insurers offer a higher No Claim Bonus (NCB) at the end of the policy term. This reward is comparatively higher than that of a traditional cumulative single year NCB. 

5. Will I get a refund if I cancel my policy before the term of my multi-year policy?

Your refund amount is calculated on the basis of the unused policy term. This means if you have a 3 year multi-year policy and you cancel your policy at the end of the first year, you will be charged for the first year along with some administrative charges. The terms and conditions of cancellation and refund policy will vary depending on the insurer. Therefore, it is important to read the fine print and understand the plan well before buying. 

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