• Is Long Term Insurance Cover Right For Your Two Wheeler

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    Many organisations have conducted studies to assess the percentage of insured vehicles on Indian roads. And to the government’s surprise, the studies showed that at least 70% of the vehicles plying on Indian roads were not insured and the majority of the vehicles were two-wheelers. Every day at least 1,500 vehicles are being rolled out from the showroom to buyers in every state.  At the time of purchase, dealers offer to insure the vehicle with at least a mandatory third-party policy, if not a comprehensive one. It is the responsibility of the vehicle owner to ensure that the vehicle is insured and the policy is renewed on time. When it comes to renewals, many fail to do so.

    Research has shown that many people don’t buy two-wheeler insurance for the following reasons:

    • It is not helpful at any time.
    • It’s expensive.
    • It’s difficult to renew it every year.

    In a nation where two-wheeler accidents are increasing day by day, it is necessary that every vehicle has to be insured with a proper two-wheeler insurance. To encourage two-wheeler owners to insure their vehicles, the Insurance Regulatory and Development Authority of India (IRDAI) has introduced long-term two-wheeler insurance policy.

    A long-term two-wheeler insurance policy is valid for three years and you can get great discounts from the insurer as well. If you too are one of those few people who would not remember important dates, then it would be beneficial if you buy this policy. The IRDAI introduced this facility to increase the number of insured vehicles because if the number further falls down, then by the end of 2030, the IRDAI would suffer a huge loss which would be difficult to regain.

    A long term policy has many perks to its credit. Here are the few benefits of this policy:

    • When you buy a two-wheeler insurance policy, the insurer offers you the annual term and the long-term. So to choose or not to choose is left to you.
    • By buying the long-term two-wheeler insurance policy, you do not have to worry about the renewing dates. It is once in three years, and nowadays the insurer reminds you well in advance for the renewal via text or email.
    • The insurance company will offer premium discounts up to 30% if you purchase a long-term policy. For two-year policies, a minimum of 20% discount will be offered.
    • The IRDAI hikes the third-party liability cover annually by at least 20% every year due to inflation. So if you buy long-term third-party liability policy, then you save on the premium hike.
    • You can save a lot on no-claim bonus if you have not claimed during the period.  With a long-term policy, a big advantage is that even if you make a claim, you can retain your NCB. However, the percentage of the NCB awarded will be reduced.
    • You can purchase long-term insurance easily online on either insurer’s website or a trusted third-party website where policies can be bought with instant approvals and easy payments via online.
    • In a regular annual policy, no-claim bonus will be applicable as follows:
    Annual policy Discount percentage
    For one claim free year 20%
    For 2 claim free year 25%
    For 3 claim free year 35%
    For 4 claim free year 45%
    For 5 claim free year 50%

     

    But in a long- term two-wheeler insurance policy, the no-claim bonus will be applicable as following:

    Long-term policy Upfront Discount percentage
    At the start of the policy 15%
    Two year policy 20%
    Long-term or three year policy 30%
    On continuation or renewal of long-term policy:  
    Renewal discount 30%
    Deduction for one claim in first year 5%
    Deduction for one claim in second year 10%
    If in third year a claim is made or more as mentioned in the policy Nil

     

    • Buying a long-term policy will save you from remembering the renewal dates like in an annual policy. The insurer in this case will send you a reminder much ahead of the expiry date of the policy and you can renew the policy on time.
    • It saves you from paying administrative costs and policy issuing costs. This will in-turn benefit you in the form of discounts while paying the premiums on subsequent years.

    It is often seen that people buy two-wheeler insurance policy just to avoid the fines and penalties from the cops if caught accidentally. But the flipside to this is usually it’s only third-party policy and it will be of no help if your vehicle is damaged and costs huge to repair it or even if it’s stolen. So while it is acceptable that you want to save money on premiums, buying insufficient insurance cover is never a solution. Insuring your two-wheeler with proper insurance like a comprehensive plan is advisable. Buy a two-wheeler long-term insurance if you are looking for higher cover with great discounts and enjoy a tension-free ride.

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