Remembering a bike insurance policy's renewal date in today's fast-paced world is relatively difficult. However, the consequences of driving without bike insurance can be detrimental. It is considered an offence in India, and motorists end up paying hefty penalties. In times like this, a multi-year two-wheeler insurance policy plays a major role in saving the motorists.
Under the Motor Vehicles Act, 1988, it is mandatory in India for every two-wheeler owner to have valid third-party insurance. According to a report by the General Insurance Council, around 60% of motorists ride without an insurance policy. To improve the situation, the Supreme Court has made five-year third-party insurance mandatory for new bike owners.
However, this does not mean that the existing bike owners can take a sigh of relief. There are multiple reasons why they should opt for multi-year two-wheeler insurance. Let's delve into them in this article.
What is a Multi-Year Two-wheeler Insurance Plan?
A multi-year two-wheeler insurance plan permits two-wheelers to be insured for three consecutive years. It is unique, unlike the regular bike insurance plan, where it has to be renewed annually. Under this plan, policyholders receive a three-year policy cover certificate. Therefore, they don't have to worry about renewing the insurance contract each year.
Benefits of a Multi-Year Two-wheeler Insurance Plan
High Savings on Premium
The premium for a multi-year two-wheeler insurance policy is lesser than that of a standard bike insurance policy. The Insurance Regulatory and Development Authority of India (IRDAI) raises the insurance premium by up to 20% each year. Through a multi-year two-wheeler insurance policy, the policyholders can lock the premium for up to 3 years.
The policy protects them against any fluctuations and requires them to pay a lower premium. Therefore, they can avoid the annual cost revision cycle.
No Need to Renew Every Year
Renewal of bike insurance every year is an added responsibility. Though there is a provision to renew two-wheeler insurance online, it can still be challenging for some to do it annually. A multi-year two-wheeler insurance plan is a smart and stress-free way of staying protected for a longer time.
Prolonged No Claim Bonus
A no-claim bonus (NCB) in bike insurance refers to the reward extended by insurance companies to the policyholders in the absence of any claims in the previous year. Under the multi-year two-wheeler insurance plan, the NCB discount rewarded at the time of policy renewal (usually 20%) will also be applicable for the subsequent years. The policyholder need not worry about NCB accumulation. They can avail of discounts on insurance premiums if no claim has been made in the previous year. It can go up to 50% in the fifth claim-free year.
Eliminates the Risk of Policy Lapse
In case of a bike insurance policy lapse, renewal can turn out to be a tiresome task. A fresh insured declared value (IDV) must be determined after vehicle inspection. Accordingly, a new premium value will be decided. The entire process is time-consuming, and the policyholder may pay more due to the increase in premium rates. With a multi-year two-wheeler insurance policy, this risk can be avoided, and the benefits can be reaped for three years.
Easy Policy Cancellation
The policyholder can withdraw from the multi-year two-wheeler insurance policy at any time. There is no requirement to hold the policy till its validity lasts. In case of withdrawal, the unutilised premium value is refunded by the bike insurance company. But a new policy should be bought before cancelling the existing one. It is important to transfer the NCB from the old policy to the new insurer to avoid losing the benefits.
Eliminates Unnecessary Losses and Penalties
As discussed earlier, driving without active bike insurance is an offence in India. If a motorist were to meet with an accident, in addition to not having any financial relief from insurance, he might also have to pay hefty fines and penalties. All of this can be avoided by buying a multi-year two-wheeler insurance policy.
Eliminates Break-in Policies
Break-in policies refer to the new bike insurance policies bought after a gap of a few years from the expiry of the old policy. In such cases, the insurer inspects the bike again due to the considerable gap. The application can be rejected if the bike does not pass the assessment. If the application is accepted, the IDV will be negatively affected, and the insurance premium will be higher. A multi-year two-wheeler insurance policy can eliminate this scenario.
Policyholders can enjoy long-term bike protection for three years. They can continue their ride happily and safely without financial burden or risk. They don’t have to worry about any damage expenses or third-party liability for the entire tenure.
Most often, policyholders are offered upfront discounts on multi-year two-wheeler insurance plans.
A multi-year two-wheeler insurance policy can save you from trouble when riding your bike on the streets. If you're looking for a policy online, look no further than Paytm Insurance. It can help you decide the best policy that suits your requirements.