Two wheelers are among the cheapest and easiest mode of transport considering the extremely busy roads in India. They account for almost 70% of the vehicles and a majority of these are uninsured. It is mandatory for the users to apply for a two wheeler insurance policy when they buy their vehicle. A lot of the two-wheeler users fail to renew their annual insurance policies after it expires and to avoid this problem, the Insurance Regulatory and Development Authority (IRDA) has introduced a third-party insurance policy for a period of three years for two wheelers.
What are the Coverage of 3 years 2 wheeler Insurance?
A two wheeler insurance policy covers own and third-party damage.
Third-party liability - Here, the loss or damage caused by the two-wheeler to someone else’s life or property is covered by the insurance company.
Own Damage - Here, the loss or damage caused to one’s own vehicle is covered by the insurance company. This damage be man-made or natural.
Every policy covers the third party liability but the long term two wheeler insurance policy for being discussed here only includes third-party liability. In case of own damage, the user has to renew the insurance policy on a yearly basis.
What is the Premium for 3 years Bike Insurance?
The premium for the two wheeler third party insurance for 3 years is supposed to be 3 times the annual third party premium and should be paid in a single installment. This premium cannot be revised during the 3 year period, whatsoever. Also, the stand alone third party cover cannot be cancelled except in a situation of total loss, wherein the full premium for the unexpired years has to be refunded.
Apart from the premium, all the other terms and conditions for this new policy are the same as the one year two-wheeler insurance policy. The information about the same can be found with any company providing two-wheeler or motor insurance.
This move by the IRDA serves as an advantage for insurance companies as they will be able to collect the premium for three years in one go saving on administrative charges. New India Assurance is offering a 30% discount to people applying for 3 year third-party two wheeler insurance along with benefits on no-claim bonus. A consumer of New India Assurance long term two-wheeler insurance policy can avail up to 50% discount on no - claim bonus at the time of renewal.
The 3 year two wheeler insurance policy is a boon for two-wheeler users as it frees them from renewing the third-party liability policy every year. The fixed premium during the policy period saves them from the annual rate hike. Apart from this, they also get a benefit from the above mentioned discounts.
Insurance companies have welcomed this new step and certain banks have already introduced the same. For example, ICICI. IRDA plans to launch a similar long term policy for other vehicles soon.