Insuring your two-wheeler is an inevitable part of owning a bike or a scooter. When you purchase a bike insurance policy offline or online, you are supposed to remember the date of policy renewal. But many times, it becomes a difficult task to remember the date and renew insurance policy every year before the due date. We tend to forget such important things in the daily hustles and bustles of life. Driving in absence of a valid two-wheeler insurance policy is an offence in India and may have legal implications. Also, it’s not an intelligent thing to do especially considering the risks that prevail on the Indian roads.
Why Riding Without An Active Insurance Is Not Safe
If we look at it from a statutory point of view, getting your two-wheeler insured is compulsory as per the Motor Vehicles Act of 1988. Riding without a valid bike insurance policy may result in an imprisonment up to 3 months or attract a penalty of up to Rs.1000 or both.
As per the 2015-16 findings of General Insurance Council (GIC), there are over 19 crore registered two-wheelers in the country, of which about 60% vehicle owners are riding without an insurance. It is also to be noted that two-wheelers are involved in most number of accidents that take place on the Indian roads.
The findings by the GIC ring a warning bell as millions of bike and scooter owners are riding without any coverage to provide them with a cushion in unfortunate circumstances that may result in damage to them or their vehicles. If we look at the main reason why people do not pay enough attention to get their two-wheelers insured is the complex process involved in the purchase and renewal of the policy. The conventional offline method may involve complicated paperwork and vehicle inspection amongst other challenges that people do not like to deal with.
How Can A Multi-Year Motorcycle Insurance Policy Help
A large number of people see two-wheeler insurance as a waste of money as they rarely make use of it. What they fail to realise is that some events can be out of their control and that prevention is always better than cure.
After considering the reasons for non-compliance, the Insurance Regulatory and Development Authority of India (IRDAI) allowed motor insurance companies to offer long-term insurance policies for up to three years to encourage vehicle owners to buy and renew their insurance policies on time. A multi-year policy can save you from memorising the renewal date and renewing your policy every year. Also, if you buy a motorcycle insurance policy online, the challenges involved can be minimal and you can get done with the whole process in a few minutes.
A long-term bike insurance policy can have several benefits for the insured. Some of which are listed below:
No Need To Renew The Policy Every Year:
The worst part about an annual insurance policy is that you need to renew the policy every year. Now opting for a long-term insurance policy for 3 years can save you from this headache and you can be covered while riding for a longer term without worrying about policy renewal.
If you buy a multi-year bike insurance policy, you may have to pay a lesser per year premium as compared to an annual insurance policy. Also, it provides the insured with an immunity against inflation which may result in the increase in premium rate. Generally, the premium rate rises by about 10%-15% every year. You can lock your premium for a longer period by purchasing a 2-3 year insurance policy to avoid the annual premium revision cycle. Also, you may also avail certain discount from the insurance companies if you opt for a long-term scooter insurance policy.
Avoid The Risk of Policy Lapse
Renewal of a lapsed motor insurance policy is a complicated task you may want to avoid. At the time of renewal, the policyholder is supposed to obtain a new insured declared value (IDV) and which is determined after inspection of the vehicle. The whole process may consume significant time and you may be required to pay a higher value due to rise in the premium rate. A long-term bike insurance policy can save you from the risk of policy lapse and you can ride without any worries for straight 3 years.
Avail No Claim Bonus
No Claim Bonus (NCB) is a discount offered by the insurance companies to policyholders if there were no claims made by them in the preceding year. It is a reward that the insurance companies offer to the insured for adopting safe riding practices. In a long-term two-wheeler insurance policy, if you receive an NCB of 20% while renewing the policy, the NCB will be applied for all the subsequent years till the policy is valid.
Avoid Penalties And Fines - Riding in absence of a valid bike insurance policy is a punishable offence in India. Also, an expired policy may act as a hindrance if you ever need to file a claim. A long-term policy can save you from such situations and help you avoid paying hefty fines to traffic cops if caught.
Easy Policy Cancellation: You may withdraw from a long-term motor insurance policy anytime and the insurance company will refund the unutilized premium amount to you. This is subject to a condition that you should have a new policy before withdrawing from the existing one. You can also retain the No Claim Bonus from your old policy.
Drawbacks of Multi-Year Insurance Policy
While a long-term motor insurance holder is immune to the rise in premium rates resulting from inflation, they cannot take benefits of any deflation in the premium rates as they would have already paid the premiums. Also, if they sell off their vehicles, they might have to bear a certain amount of loss.
A long-term motorcycle insurance policy brings to you numerous benefits. The possibility of deflation in premium rate is rare and it is not something to worry about. If you are not planning to sell your vehicle anytime soon, a multi-year bike insurance policy can be the best thing you can invest in to ride your two-wheeler with confidence.