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Difference Between Single and Multi-year Two Wheeler Insurance

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

Usually, two-wheeler insurance plans are designed for a term of one year. At the end of this term, the plan needs to be renewed. These traditional plans are known as single year two-wheeler insurance plans. A multi-year two-wheeler insurance plan is a unique insurance offering. This plan allows two-wheelers owners to insure their vehicle for a maximum of three years with a single upfront premium payment. You do not have to renew the two-wheeler insurance policy every year. It is a form of long-term investment for financial safety. It is a relatively new concept in two-wheeler insurance and is often confusing for owners.

Let’s analyze both the products and understand the advantages of each.

Highlights of Multi-year Two Wheeler Insurance 

Third-Party Liability Cover: Similar to a single year insurance plan, a multi-year insurance plan protects you 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 financial safety. Apart from accidents, it also compensates for the financial losses incurred by the owner due to burglary or theft and other unexpected damages due to riots or strikes and other natural calamities. 

Personal Accident Cover: In case of death or complete disability suffered by the owner, a multi-year insurance cover provides a compensation amount to the nominee. This is to make sure that the financial cover is not limited to the owner alone. The dependent nominee from the family can file for a claim on behalf of the policyholder with the necessary documents.  

Personal Accident Cover for Pillion rider: If you frequently travel with your family member as a pillion rider,  by paying a little extra premium amount you can secure a personal accident cover for them. This ensures that if any unexpected scenario such as an accident arises, the pillion rider is also financially secure with a personal accident cover. The Personal Accident Cover for Pillion rider also takes care of hospitalization bills and treatment costs. 

Cashless claims across India: The cost of repairing your two-wheeler immediately after a sudden accident can lead to a financial burden. Under multi-year two-wheeler insurance, you can fix your two-wheeler at any of the network garages. Most network garages also offer premium services like towing from the accident location, roadside assistance in case of a breakdown, etc.

Quicker Claim Settlement Process: A multi-year two-wheeler insurance plan is carried out entirely online. This implies that your claim approval and documentation will only take a few minutes. Since there are no agents, the chances of losing your documents are also reduced. Additionally, all insurers have a unique Claim Reference Number (CRN) which helps track the claims’ request.  

Difference Between Single Year and Multi-year Policy:

Parameters Single year two-wheeler insurance planMulti-year two-wheeler insurance plan
Premium hikes20% annual hikes (as per IRDAI)No annual hikes. A single premium amount for the entire policy term
No Claim BonusLess than multi-year plansMore than single-year plan
Cancellation No refundRefund is based on the utilized policy term
SavingsLesser savingsMore savings (due to additional discounts)
  • Premium hikes: In the case of regular bike insurance, the premium amount is revised every year at the time of policy renewal. As per the data released by IRDAI, this hike is almost 20% of the premium amount. However, in the case of Multi-Year two-wheeler insurance, the premium is fixed for up to 5 years. The premium amount is not affected by any external price fluctuations. So, you can purchase your two-wheeler insurance for cheaper.
  • No Claim Bonus (NCB): No Claim Bonus (NCB) is a percentage discount offered on the Own Damage premium amount ay the time of renewal. This is an incentive for riders with no history of claims during the policy term. You can compare the No Claim Bonus (NCB) offered for different plans using the below table -
No of yearsNo Claim Bonus (NCB) for Single year policy (in %)No Claim Bonus (NCB) for Multi-year Policy for 2 years (in %)No Claim Bonus (NCB) for Multi-year Policy for 3 years (in %)
At the time of first renewal 204045
At the time of second renewal254550
At the time of third renewal355560
At the time of fourth renewal456565
At the time of fifth renewal506565
  • Insured Declared Value (IDV): Insured Declared Value (IDV) of your two-wheeler is the maximum compensation offered by your insurance provider in case of theft or complete damage. It is decided on the basis of the manufacturer’s market selling price. The Insured Declared Value (IDV) of the bike and accessories, if any, fitted to the vehicle is fixed for a single year as well as multi-year plans.
  • Cancellation: If you have a history of claim and want to cancel your single year bike insurance, there will be no refund. But on the other hand, in case of a multi-year two-wheeler insurance policy, you will get a refund, based on the unused period of your policy.
  • Savings: Single year plans have an annual hike in premium amount by almost 20% every year. Having a multi-year insurance plan helps you save. 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.


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

The premium for two-wheeler insurance is adjusted each year. There is close to 20% hike in Third Party premium alone. If you choose a multi-year two-wheeler insurance plan, the premium for your policy term (max 5 years) will be the same. So, you will at least save 20% per year. Since they are long term investments, most insurers also offer an exclusive discount.   

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

The process to change your bike insurance provider before the end of your term is very simple. You just need to drop an official request to cancel your existing plan and purchase a new one. The premium amount, depending on the utilization term will be deducted along with some administrative charges. 

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

Your refund amount is calculated on the basis of the unused policy term. Let’s say you have a 2 year multi-year policy and you cancel your policy at the end of the first year, you will be charged only for the first year. The terms and conditions of refund are decided by your insurance provider. Therefore, it is important to read the policy document and understand it well before buying.

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