Top 6 Benefits of Long-Term Two-Wheeler Insurance
As per the Motor Vehicle Act, in India, every two-wheeler owner must always have valid third-party insurance. But, as per a report by General Insurance Council, around 60% of the two-wheelers plying in the country do not have a valid insurance policy. This means that millions of people carry a significant amount of financial risk every time they are out riding their bike.
To bridge the gap, the Supreme Court has recently made 5-year third-party insurance mandatory for new two-wheeler owners. But should existing two-wheeler owners consider long-term two-wheeler insurance?
The answer is, a definite “Yes” if they know the many benefits multi-year vehicle insurance can offer. Six top benefits are listed below-
1. Save Big on Premiums
The IRDAI (Insurance Regulatory and Development Authority) regulates the rates of third-party motor vehicle insurance. Insurance companies cannot sell basic third-party insurance at a price higher than what is fixed by the IRDAI. But the regulatory body increases the insurance premiums by almost 20% every year.
So, if you are purchasing 1-year bike insurance this year, you will mostly be required to pay a 20% higher premium when you renew the policy next year. This can be avoided with the help of a multi-year policy. For instance, if you purchase 5-year insurance, you will remain protected against the premium hikes as the premium cannot be increased within the policy tenure.
2. Eliminate the Hassles of Policy Renewal
One of the most common reasons why people do not renew their bike insurance is the challenging renewal process. But while this might have been a problem in the past, two-wheeler insurance online has eliminated these challenges.
However, many people continue to believe that renewal is a time-consuming process and involves a lot of paperwork. Multi-year insurance is a smart way to avoid regular renewals; your vehicle will be insured for 2-5 years, and you need not worry about renewing the policy every year.
3. Avoid Policy Lapse
Riding without a valid third-party or comprehensive two-wheeler is a punishable offence. It could lead to hefty penalties and even imprisonment. Moreover, once the policy lapses, you will then have to purchase a new policy and complete all the paperwork and inspection again. All of this can be easily avoided with the help of a multi-year insurance policy. With a single purchase, it keeps you protected against the severe consequences of policy-lapse for multiple years.
4. Losing NCB
One of the most significant benefits of timely comprehensive bike insurance renewal is No Claim Bonus or NCB accumulation. It allows you to get a discount on the insurance premium if you have not filed any claims in the past year. The NCB for 1st claim-free year is 20%, and it could increase up to 50% in the 5th claim-free year.
But you risk losing your NCB if you do not renew your bike insurance within the grace period from the expiry date of the previous policy. With long-term two-wheeler insurance online or offline, you are not required to keep track of the accumulated NCB every year. Also, some of the insurers in India have a slightly different NCB structure for multi-year policies, which could help you get bigger discounts.
5. Avoid Break-in
Assuming that you didn't renew your insurance for the last two years. Now if you want to purchase new bike insurance, your insurer might want to inspect your bike as there has been a considerable gap between the policies. Such policies are generally known as 'Break-in' policies.
The insurance company can reject your application if the bike is not in an "insurable" condition as per their assessment. Even if the request is accepted, the insurance premium will be high, and the Insured Declared Value (IDV) will be negatively affected. A long-term two-wheeler insurance policy can help you avoid this scenario.
6. Cancel Policy Anytime You Like
A 5-year insurance policy is a long-term commitment. What if after purchasing, you do not like the services of the insurance provider? What if the claim process of the insurer is very complex? In such cases, you can cancel your policy anytime you like and switch to a different insurer.
The current insurer will refund the unutilised premium amount. Additionally, you can transfer your current NCB to the new insurer. You are required to get an NCB certificate from your current insurer and purchase the policy from the new insurer before cancelling your existing policy. Submit the NCB certificate to the new insurer and your bonus will be transferred to the new policy.
Enjoy a Host of Benefits with Long-Term Two-Wheeler Insurance
As can be seen above, long-term two-wheeler insurance policies bring with them a host of valuable advantages. If your insurance renewal is just around the corner, do consider purchasing a multi-year plan and start experiencing all the benefits discussed above.