Is Multi-Year Insurance Cover for Two-Wheelers Beneficial?

In India, riding a bike without third party insurance cover is punishable under the Motor Vehicle Act 1988. Following the Supreme Court of India’s judgement in 2018, the Insurance Regulatory and Development Authority (IRDA) made it mandatory for all new motorcycles and scooters to have a five-year bike insurance policy. If you bought a bike before the Supreme Court’s judgement, here’s all you need to know about the advantages of long-term two-wheeler insurance.

Save on premiums

Do you know who regulates the price of your third party liability insurance? It's the IRDA, not your insurer. Your insurer cannot sell the third party policy over the price fixed by the IRDA. The regulatory authority raises the premium of third-party motor insurance by 20% on average every year. Furthermore, there is always a chance that your insurance company may raise the cost of the own-damage element of your bike insurance.

If you buy annual insurance, you will be required to pay a higher premium each time you renew the policy. Long-term two-wheeler insurance is recommended to avoid this. Long-term insurance protects you from rising policy premiums, allowing you to save a significant amount of money.

Avoid last-minute hassles

One of the most common reasons why people hesitate to renew their motor insurance is that they either find the renewal process tedious or are unaware of the repercussions of riding without the basic bike insurance cover. 

Long-term two-wheeler insurance, on the other hand, can easily protect you from such situations. It protects you not only against legal ramifications but also from the loss of any continuity benefits that may occur in case of the lapse of motor insurance cover.

Skip bike insurance policy lapse

A third party liability cover is mandatory to ride on the Indian roads. If you are caught driving without this minimum insurance cover, the authorities will either penalise you or put you behind bars, or both, depending on the situation. As a result, policy lapse is one of the most common fears every motor insurance policyholder experiences. Plus, if your bike insurance expires, you will have to go through the inspection process all over again. Long-term two-wheeler insurance can help you avoid the implications of a policy lapse.

Safeguard No Claim Bonus (NCB)

Renewing your policy before its expiry or during the grace period allows you to lower your policy premium through No Claim Bonus or NCB. NCB is a reward your insurer offers you for going claimless during a policy year. It helps to lower your next premium by up to 50%. Depending upon the number of consecutive claim-free years, the NCB percentage in bike insurance can range anywhere between 20% and 50%. 

However, missing the renewal date results in losing the NCB for your motor insurance. Long-term two-wheeler insurance, in this case, can save you from this scenario. 

Freedom to cancel the policy anytime

Are you worried that if you purchase a long-term two-wheeler insurance policy, the insurer may not provide you with their best services? If yes, keep your worries aside. In multi-year motor insurance, if you are unhappy with your insurer's services or have trouble understanding the claim settlement process, you can change insurers at any time.

When you cancel your long-term bike insurance, the existing insurer will refund the unutilised policy premium amount. Moreover, you can also transfer your continuity benefits to the new insurer. To transfer NCB, you must first obtain an NCB certificate from your existing insurer and then present it to the new insurer.

To Conclude

Compared to single year bike insurance, long-term two-wheeler insurance offers more advantages. Always consider your budget when picking between these two policies. If you own a bike and want to replace it with a four-wheeler in the coming year, buy a single year motor insurance policy. On the other hand, a multi-year policy makes sense if you are going to be using your bike for the long term.