Long-Term Two-Wheeler Insurance
India is home to around 10 crore two-wheelers, and it is estimated that around two-thirds of these vehicles remain uninsured. Although every two wheeler that is purchased leaves the showroom with a cover due to a compulsory clause, most of these vehicles run of their insurance within a year. To address the problem of non-renewed two wheeler insurance, the IRDAI (Insurance Regulatory and Development Authority of India), in 2015, introduced the concept of long term two wheeler insurance. Under a long term two wheeler insurance, the tenure of the policy will extend up to three years, although the only company to offer such a solution at the moment is New India Assurance Company. However, many two wheeler insurance company are expected to follow suit.
Benefits of Purchasing Long-Term Two-Wheeler Insurance
Though it is not compulsory for owners of two wheelers to purchase long term insurance, it is certainly an option worth considering. One of the biggest benefits of purchasing a long term two wheeler insurance policy is that customers will no longer have to worry about annual renewals. Since regular two wheeler insurance policies expire every year, failure to renew them on time can cause problems such as a lapse, and once a policy has lapsed, the insurance company will inspect your vehicle prior to renewing your insurance, making it essential for your vehicle to be in top condition so that your renewal application is not rejected.
Third party insurance cover has been made compulsory by the motor law in India. It offers financial cover to third parties if the policyholder meets with an accident. A number of insurance providers have asserted that the three-year tenure offered by a long term two wheeler insurance policy will certainly lower the cost of issuing and administering policies and following up for renewal. The premium payments applicable to a long term two wheeler insurance policy will also be lower than regular two wheeler insurance policies.
When purchasing a long term two wheeler insurance policy, you will receive a discount of 30% and will also be eligible for no claim bonuses after the tenure of the policy is complete. New India Assurance Company offers a 20% discount on two-year policies and 30% on three-year policies.
Differences Between Regular Annual Two-Wheeler Insurance Policies and Long-Term Two-Wheeler Insurance Policies
In case of regular policies, a 20% discount can be claimed after one claim-free year, but long term policies receive an upfront discount. The discount after two, three, four and five consecutive claim-free years, respectively, for regular annual two wheeler insurance policies, is 25%, 35%, 45% and 50% respectively.
Long term two wheeler insurance policies, on the other hand, offer a discount of 20% for two-year policies, 30% for three-year policies, and 15% at inception. When you are renewing your three-year policy, the discount offered after three years will be 30%, 25% after once claim in the first year, 20% after once claim in the second year, and nil if there a claim is made in the third year or more than one claim has made during three years.
Kinds of Long-Term Two-Wheeler Insurance Policies
There are two kinds of long term two wheeler insurance policies you can avail at the moment:
- Liability One Policy: Third Party insurance as it is also called, a Liability One policy offers a comprehensive cover for death or injury of a third party individual. It also offers financial coverage to a third party's property damaged as a result of an accident. Although there will be no provision of compensation for the damages caused to the two wheeler, the owner of the vehicle will receive a relief by means of a personal accident cover.
- Package Policy / Comprehensive Plan: A Package Policy or a Comprehensive Plan not only offers financial cover against third party liabilities, but also offers protection to the insured two wheeler by providing personal accident cover along with add-ons, if any.
Why Should You Purchase Long-Term Two-Wheeler Insurance?
Any owner of a two wheeler will require an insurance plan to ensure that their vehicle is financially protected against theft or damages of any kind. Not only can you avail financial protection from a comprehensive long term two wheeler insurance plan, but is has also been made compulsory by law to possess a copy of the insurance policy on your person while riding in case the police requires it for inspection. While a regular insurance policy will certainly suffice, a long term two wheeler insurance plan will reduce the tedium of renewal. You can simply purchase the policy and have no need to worry about renewal for three years. Moreover, in case no claims have been made on your long term two wheeler insurance policy, you will be in a position to receive the No Claim Bonus that has the potential to increase your margin.
Another great benefit of purchasing a long term two wheeler insurance policy is that some insurance providers offer an added advantage of an anti-theft alarm. This feature is a one-time investment and delivers peace of mind as once the system has been installed in your vehicle, you could also receive some rebated from the insurance company on your premium.
What's more? Co-passengers or pillions can avail added personal accident cover to ensure financial security in case of accidents. The documentation process associated with the purchase of a long term two wheeler insurance policy is relatively quick as a number of insurance provides have started to issue long term two wheeler insurance policies online, meaning that all you need to stay insured is a computer and an internet connection along with your mode of payment.
Individuals who purchase a long term two wheeler insurance policy can also shift their two wheeler insurance policy from one insurance company to another. Holders of long term two wheeler insurance policies can also avail cashless claims at certain partner garages. In case the policyholder is a member of one of the listed biking associations, offers such as discounts on premiums can also be claimed. Extra add-on covers can also be purchased along with a comprehensive long term two wheeler insurance policy to enhance savings and protection.
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