You’ve finally purchased the two-wheeler you’ve been dreaming about, and the excitement of riding through the streets is unmatched. However, there’s one essential task left: buying two-wheeler insurance. With the rising number of accidents, the insurance regulator now mandates multi-year insurance, five years of third-party liability coverage in case of new vehicles, to be precise. But is a long-term policy truly beneficial? If yes, what should you consider before choosing one? Let’s explore this in the article below:
What is multi-year insurance cover?
A multi-year insurance cover can be a package/comprehensive policy that covers third-party liability and own damage or be a long-term third-party liability policy. As of 1st August 2020, if you buy a new vehicle, you're required to purchase a five-year-long third-party liability insurance policy. This is a mandatory requirement issued by the Insurance Regulatory and Development Authority of India. However, since third-party coverage is limited to injury caused to a third party or damage caused to his/her property, many people opt for a comprehensive policy that covers both third-party liability as well as own damage.
The comprehensive plan provides a year-long coverage for the bike's own damage and five years of third-party legal liability coverage. After a year, you’ll need to renew the own damage portion to remain financially protected against incidents like accidents, natural disasters, theft, and more. For long-term comprehensive insurance, the policy tenure will be three years not five years.
Benefits of multi-year insurance cover for two-wheelers
Here are the key advantages of opting for multi-year insurance for your bike:
- No Policy Lapse
If you unknowingly ride with an expired policy, you could face a fine of INR 2, 000 for the first offence and INR 4, 000 for subsequent ones. With multi-year insurance, you avoid this risk. Additionally, you won’t have to undergo the inspection process required by insurers if your single-year policy expires and passes the grace period.
- Cost-Effective
The IRDAI sets the third-party liability premium based on engine size. If you purchase a single-year policy and the regulator increases premiums next year, you’ll have to pay more. However, with a multi-year policy, your premium is locked, protecting you from future hikes.
- Flexibility
You can switch insurers even with a long-term policy if, for instance, you find no network garage in your city or are dissatisfied with customer service. Your current insurer will refund the unused premium, and you can also transfer continuity benefits, including the no-claim bonus, which can reduce your premium by up to 50%.
Things to consider when buying multi-year insurance
When purchasing multi-year insurance for your bike, keep these factors in mind:
- Riders: Check available riders, such as roadside assistance, zero depreciation, and no-claim bonus protection, as they offer additional coverage.
- Network Garages: Use the bike insurance app to check for reputable service centres in your city. Only proceed with payment if your preferred garages are listed.
- Deductibles: Insurers offer voluntary and compulsory deductibles. While you cannot change the compulsory portion, increasing voluntary deductibles can lower your premium. However, this will raise your out-of-pocket costs during repairs.
- Claim Settlement Ratio: Compare insurers' claim settlement ratios to gauge how many claims they’ve settled in a financial year.
Conclusion
Multi-year two-wheeler insurance is highly beneficial, particularly for those who prioritise convenience, long-term savings, and peace of mind. By choosing a multi-year policy, you can avoid annual premium increases, the hassle of yearly renewals, and ensure continuous coverage. While there are upfront costs, the benefits often outweigh any drawbacks. Remember to use the bike insurance app for a seamless insurance experience and easy management of your policy