A two wheeler insurance policy provides protection against unpredictable circumstances that could cause damage to the vehicle. two wheeler insurance is provided by general insurance companies that have received a license from the Insurance Regulatory and Development Authority of India (IRDAI). In India, it is mandatory to purchase a two wheeler insurance policy. Failure to do so may attract a fine or temporary imprisonment too.
Earlier, two wheeler insurance plans offered coverage for one year. The policyholder was required to renew the policy by paying a renewal premium after one year. But today, insurance companies have introduced the concept of multi-year policies that offer coverage for a longer period, typically for 3 years. The policyholder, for such policies, is required to renew the policy after the said period. The concept of multi-year policies was introduced to encourage bike owners to buy policies and make sure policies don’t lapse due to non-payment of the renewal premium.
Multi-year two wheeler insurance policies come with an array of benefits. Here are a few of them:
The IRDAI revises the third-party liability premium on a regular basis. So, policyholders who possess regular policies will have to pay a higher premium compared to the previous year. Further, depending on the claims experience and factors such as the performance of the products, the company, too, might hike the premium amount payable. However, in case of multi-year policies, the individual pays the premium only once and he/she need not pay a surged premium or surged service tax until the next renewal date.
A multi-year policy ensures the policyholder’s vehicle is protected for a long period of time. It saves the trouble of having to renew a policy after one year. After purchasing the policy, the policyholder need not worry about the renewal dates or the probable premium amount payable. Also, the person will have to maintain just one policy document.
Purchasing a 3-year policy does not mean the person is required to hold on to it for the entire tenure. If he/she wishes to cancel the policy, he/she may do so and expect a refund of the premium paid for the unexpired period of the policy tenure. The premium amount refundable by the insurer also depends on the amount of time that has passed. The cancellation policy, however, differs from one insurer to another.
Insurance companies may sometimes offer a discount on the premium amount payable on multi-year two wheeler insurance policies. Such 10%-20% discounts on premiums at the time of purchase will help policyholders spend less on motor insurance.
A No Claim bonus is offered when a policyholder makes no claims in a policy year. In a regular insurance policy, the No Claim Bonus is nullified if a claim is made but in the case of a multi-year two wheeler insurance policy, the No Claim Bonus is not nullified. The percentage of the No Claim Bonus that is provided to the policyholder after the claim is made depends on the No Claim Bonus policy of the company.
Not having a two wheeler insurance policy, as mentioned earlier, will result in the individual having to pay a fine. Also, if the person meets with an accident and he/she has no insurance policy, the expenses incurred will have to be paid by him/her. It is hence best to avail a multi-year two wheeler insurance plan.
While a multi-year policy protects the person from premium inflation, it does not protect him/her from premium deflation. Therefore, if the premium amount reduces during the policy tenure, the insurer will not reduce or refund the difference amount.
A multi-year two wheeler insurance policy is, therefore, a blessing in disguise to all those who find it hard to remember renewal dates and do not wish to go through the trouble of renewing policies every year.
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