Long-Term Two-Wheeler Insurance
A vast number of two-wheeler vehicles in India run uninsured after their initial compulsory cover expires within a year. To tackle this widespread issue of policy non-renewal, the IRDAI (Insurance Regulatory and Development Authority of India) introduced the concept of long-term two-wheeler insurance in 2015.
This type of policy allows customers to secure coverage for an extended tenure of up to three years, offering convenience and potentially lower administrative costs compared to annual renewals. Several companies offer long term two wheeler insurance. Read on to learn more about the benefits, features, types and process of applying for a long term two wheeler insurance.
Benefits of Purchasing Long-Term Two-Wheeler Insurance
The benefits of purchasing a long-term tow-wheeler insuarnce are as follows:
- Zero Renewal Stress: One payment covers you for three years, so you don't have to constantly track expiration dates or worry about missed deadlines.
- Locked-In Savings: You freeze your premium at today's rate, which protects your wallet from the price hikes that usually happen every single year.
- Better Bonuses: You get access to higher upfront discounts and keep your No Claim Bonus (NCB) consistent across the entire five-year period.
- Peace of Mind: It ensures your bike is always protected against theft or accidents without the hassle of repetitive vehicle inspections.
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.
No of claim free years | Discount |
After 1 claim-free year | 20% discount |
After 2 consecutive claim-free years | 25% discount |
After 3 consecutive claim-free years | 35% discount |
After 4 consecutive claim-free years | 45% discount |
After 5 consecutive claim-free years | 50% discount |
Long term two-wheeler insurance policies are designed in a more forgiving manner and allow upfront discounts. On first purchasing a long-term policy, you can avail up to 15%–20% on the Own Damage (OD) premium.
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.
Claims made | 2- Year Policy | 3- Year Policy |
No claims | 25% - 35% | 35% - 45% |
1 claim | 10% - 20% | 25% - 35% |
2 claim | 0% | 20% |
3 or more claims | 0% | 0% |
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?
Long-term two-wheeler insurance provides a balance between regulatory compliance and financial peace of mind. By extending the coverage period, riders can bypass the annual administrative cycle while securing various fiscal advantages.
- Legal Mandate: It is legally mandatory for every two-wheeler vehicle in India to have an insurance cover.
- Financial Safety: An insurance policy protects you in case of theft or damage or third-party liabilities.
- Convenience: Through the long-term insurance plan, you can skip the nuisance of constant renewal.
- Accumulation of No Claim Bonus: Cautious drivers who ride safely and do not make a single claim in their tenure of insurance cover, are specifically awarded as their savings grow with every accident-free year.
- Passenger Accident Protection: In case of a grave accident, the rider can avail vital financial protection for their companions.
- Anti-Theft Security Discounts: Insurance providers lower the insurance premium if you install an anti-theft alarm system as it reduces the chances of theft or burglary.
- Add-on Options: You can get additional perks through your insurance policy for enhanced basic coverage.
- Digital Documentation: Policy issuance is now available through online portals making buying an insurance policy even more easy and convenient.
- Portability and Flexibility: You can easily port & switch your insurance companies for better plans and premium benefits.
- Claim Facilities: Having an insurance cover helps you save time as you can utilize partner garages for repairs.
How to buy Long-Term Two-Wheeler Insurance?
Most companies offering long-term two-wheeler Insurance have simplified the process by completely digitizing it. Given below are the steps you must follow to buy a Long-Term Two-Wheeler Insurance
Step 1: Visit the official insurer's website.
Step 2: Enter your bike's registration number. In case you have a new bike, you can enter the make, model, variant, and city of registration.
Step 3: Choose the tenure, “long-term” or “multi-year” for your insurance plan.
Step 4: Then, choose the type of policy such as comprehensive or third-party policy as per your requirements.
Step 5: Next, pick your preferred add-ons like Zero Depreciation, Roadside Assistance, or Engine Protect for your insurance cover.
Step 6: Check the final premium amount which would include the upfront discount and the "locked" third-party rate)
Step 7: Complete your transaction by paying via UPI, Credit/Debit Card, or Net Banking.
Step 8: You will receive your digital policy document immediately via email.
Documents Required
For online purchases of insurance policy, you would need the following documents:
- Registration Certificate (RC) for the engine and chassis numbers.
- If you are switching or renewing, you will need the previous policy number and your current NCB (No Claim Bonus).
Personal ID like Aadhaar, PAN, or Driving License details for KYC purposes.
Note: From 2023, IRDAI requires KYC for all new insurance.
FAQs on Long-Term Two-Wheeler Insurance
- What is long-term two-wheeler insurance?
Long-term insurance is a policy that covers your vehicle for up to three years. Regular policies only cover the vehicle for one year at a time.
- Does the premium amount change every year in a long-term plan?
The premium stays the same for the entire three-year duration. Annual policies often see a 10% to 15% increase in rates every year.
- What happens to the No Claim Bonus (NCB) in multi-year plans?
You get an upfront discount on the premium for multi-year plans. Annual policies only give an NCB discount after you complete a claim-free year.
- Is it mandatory to buy long-term insurance?
Third-party insurance is mandatory by law for all vehicles. Long-term insurance is an optional choice to avoid the stress of annual renewals.
- How is the Insured Declared Value (IDV) calculated?
The IDV is calculated by subtracting the annual depreciation from the bike's ex-showroom price. The IDV decreases every year as the bike gets older.
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