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.
The importance of two-wheeler insurance cannot be underestimated in current times. A vehicle owner cannot assume end of responsibility once they insure their vehicle. They must also renew their policy in a timely manner to remain protected against a variety of mishaps involving their two-wheeler and themselves. However, most people in India do not renew their bike insurance on time as they find it hard to remember the date of policy expiry. The thought of renewing the insurance policy slips out of mind while keeping up with the daily hustles and bustles of life.
In India, riding without a valid insurance is a punishable offence. From a legal perspective, a two-wheeler insurance is compulsory in India under the Motor Vehicles Act, 1988. Riding without a valid insurance may result in a penalty of up to Rs.1000 or up to 3 months imprisonment or both. Also, riding on the Indian roads is not a wise option without having an insurance policy.
What are the Coverage of 3 years 2 wheeler Insurance?
A 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.
How Safe Is To Ride Without An Active Bike Insurance?
According to the General Insurance Council (GIC) findings for the year 2015-16, about 60% of the 19 crore registered two-wheelers in India are riding without an insurance. Also, two-wheelers are involved in most number of road accidents that take place in India. This is certainly not a good sign as millions of bike owners in India lack sufficient coverage against incidents that may cause losses or damages to the vehicle or injuries to the riders.
Why Long-Term Two-Wheeler Insurance?
The Insurance Regulatory and Development Authority of India (IRDAI) observed that there is a general lack of awareness in India about the importance of insurance. Most people are unwilling to buy an insurance and renew the same every year as they perceive it to be a waste of money as they rarely get a chance to utilise it. What they must realise is that an insurance policy is a contingency plan for an unfortunate incident that you they may encounter without any notice.
To encourage two-wheeler riders to buy motor insurance and renew it on time, the IRDAI has now allowed insurance agencies to provide long-term insurance policies for up to 3 years. Additionally, if you buy a two-wheeler insurance online, there are minimal hassles involved in the process and you can get the insurance done in a matter of few minutes.
Benefits Of A Long Term Bike Insurance Policy
There are several advantages of a multi-year two-wheeler insurance policy. Some of which are explained below:
No Need For Yearly Policy Renewal
An insurance policy for two or three years can save you from the hassles of remembering the expiry date of the policy and renewing the same going through a tedious process every year. A long-term insurance policy can be convenient as you can ride your vehicle without any worries for a period up to three years.
Lower Insurance Premium
The per-year insurance premium for a long-term insurance policy is certainly lower than that of an annual insurance policy. On the other hand, the premium rates tend to rise every year due to inflation. By purchasing a multi-year bike insurance policy, you can remain immune from the effects of inflation as you would have already paid the premium for three years in advance. You may also avail various discounts opting for a multi-year insurance policy.
Reduced Risk of Policy Lapse
Policy renewals, especially through the offline channels can sometimes get really complicated. The policyholder has to state a new IDV (Insured Declared Value) of the vehicle after getting the vehicle inspected. The whole process takes up a considerable time and the insured person may be required to spend more on the insurance due to the yearly rise in the rate of premium. A long-term two-wheeler insurance reduces the risk of policy lapse for 2-3 years and you can ride protected at a lower premium for a longer period of time.
Avail No Claim Bonus
Whenever you renew your bike insurance policy online or offline, do not forget to avail the No Claim Bonus (NCB) if you have not made any claims on your policy in the preceding year. The NCB is the discount given by your insurance provider for adopting safe riding practices. A policyholder may avail an NCB of 20% while renewing the policy. It will also be applicable for the subsequent years in case you are buying a multi-year insurance policy.
Avoid Penalties And Fines
In India, it is a punishable offence to drive a motor vehicle without a valid insurance. Even if you ignore the legal implications of a bike insurance policy, you must realise that an insurance policy can be of great support in times of emergencies that are unpredictable in nature. In the absence of an active insurance policy, you will not be able to file the claims on your policy. A long-term policy saves you from running into the risk of policy lapse for a longer duration. It will also save you from paying unnecessary fines and penalties.
Trouble-Free Policy Cancellation
A long-term motor insurance policy does not bind a policyholder to continue with the same policy till its validity ends. They may choose to withdraw from the same whenever they wish to and they would receive a refund of the unutilised premium. However, it is important to buy a new insurance policy before withdrawing from your existing policy. Also, do make sure that you retain the NCB when you buy a new insurance policy.
Drawbacks of A Multi-Year Insurance Policy
A multi-year insurance policy can save you from the rise in premium rates as a result of inflation. But in case there is a deflation in the premium rates, you will not be able to take any advantage of the same. You may also incur a certain financial loss if you sell off your vehicle during the tenure of the policy.
The benefits of a long-term bike insurance policy tops its drawbacks. There are rare chances of deflation in premium rate. And if you don’t plan to sell off your vehicle in another 2-3 years, a multi-year insurance policy can be one of the best form of protection you can get. You can easily buy a long-term motorcycle insurance online.