Is it a Good Idea to Buy a Multi-Year or Long Term Two-Wheeler Insurance?

Even with several preventive measures in place, road accidents continue to be a persistent problem in Indian cities. Further, among the total number of road accidents reported in the country, a substantial percentage involves two-wheelers. To substantiate this, we can turn to a report published in the New Indian Express, which stated that out of the total number of accidents in the city of Bengaluru, more than 30% involved two-wheelers.

Sounds alarming, right?

So having a two wheeler insurance policy in place to safeguard yourself against the financial liabilities arising under such circumstances is not simply an option, but a mandate.
But, should you opt for a long term two-wheeler insurance policy?
Let us elaborate on why it is a good idea.

What does a long term two-wheeler insurance policy entail?

There are approximately 18 crore two-wheelers in India out of which about two-thirds are uninsured. While insurance covers are provided under mandatory clause from auto dealers, these covers are seldom renewed once the insurance coverage period expires.
To counter the situation, the IRDA from last year has facilitated two-wheeler vehicle owners to avail long term two wheeler insurance policies. The tenure for these insurance plans can range up to five years and reduce the hassles of renewing the policy annually.
Under the Motor Vehicles Act of India, availing a third party insurance for bike is mandatory for every vehicle owner in India. This third-party liability cover helps to safeguard you against liabilities arising from bodily damage or property damage to third parties.
Further, if you are opting for a comprehensive insurance policy for better-rounded coverage, you can choose from any of the two options below –
i. A third-party liability policy for 5 years and an additional own damage policy for 1 year.
ii. A third-party liability policy and an additional own damage cover for 5 years.
According to insurance providers, the introduction of the long-term two-wheeler insurance policy to the market will reduce the expense of issuing policies, their administration and subsequent follow up for renewing them. This is also slated to reduce the premium payment for the policyholders.

Why should you opt for it?

As far as the benefits of these long term two-wheeler insurance policies are concerned, they are many and varied. Following are a few instances where availing long term insurance can be advantageous over the traditional insurance covers -

1. Lower premium payment

For regular bike insurance policies, the premium gets revised every year during policy renewal. Typically, the premium rate for insurance policies rises each year by 10%-15%. But in case of long term insurance, your premium amount gets locked in for the period of 5 years and is not affected by price inflation.
Thus, with the multi-year two-wheeler insurance policy, your policy premium amount gets locked in and helps you to avoid the price hike.

2. Availing No Claim Bonus

No Claim Bonus refers to the discount that is offered by insurance providers if a policyholder does not raise any claim against the insurance in the preceding year. For long term insurance policies, the NCB is not carried forward until the time the policy is valid. Further, it does not get nullified if a claim is made against the policy; it simply gets reduced.

3. To avoid any non-renewal implications

The non-renewal of insurance policies or the period between the lapse of a policy and its renewal exposes you to various risks. For example, the financial liabilities from accidents and vehicle-theft can be hard to bear under this circumstance.
Further, using a two-wheeler without a legal insurance policy is a punishable offence under the Motor Vehicles Act, 1988.
Availing a long term insurance cover can help you to avoid these implications arising from not renewing your policy, to quite an extent.

4. Break-in policy for insurance renewal

Sometimes, a gap between renewing your insurance policy can warrant an inspection of your two-wheeler from insurance providers, before they renew your policy. These are known as break-in policies and can consequently lead to an increase in your premium payment.
With a long-term two-wheeler insurance policy, you can make sure that there are no break-ins in your policy, at least for a period of 3-5 years.

5. Convenience

Apart from the benefits mentioned above, the most crucial reason to avail this policy is that it makes for an extremely convenient way to insure your two-wheeler vehicle. Even though most insurance providers have facilitated the online renewal of insurance policies, making the process extremely simple, it is always better if you have to do in one in a period of 5 years.
It is, thus, much more convenient to avail the multi-year two-wheeler insurance than the regular one.
With such benefits and more, a multi-year bike insurance policy is not just a good idea, but the best idea for financial protection.
So, what are you waiting for? Get your two-wheeler insurance for the next five years today!