When it comes to long-term car insurance for two-wheelers, it can be extremely difficult to remember to renew the policy year after year. Since driving a vehicle without liability insurance is illegal, a policy that has expired for even one day can create a number of complications. A simple and practical solution to this problem is long-term car insurance.
In India, the highest percentage of uninsured vehicles was two-wheelers. One of the main reasons for this was that until recently only one-year insurance policies were taken out for two-wheelers. Last year, the Insurance Regulatory Authority of India (IRDAI) gave insurers the go-ahead to sign long-term two-wheelers contracts for up to three years to address this problem.
So are there additional benefits to investing in long-term insurance for two-wheelers?
Policyholders can benefit from discounts on long-term two-wheel motor insurance. Since insurers can save administrative costs through long-term plans, they offer their clients various discounts and incentives. This applies in addition to the subscription benefits offered and the no-claim bonus. While liability insurance is required by law in the field of motor vehicle insurance, your own damage insurance is optional. Insurers like New India Assurance also offer initial discounts on their own personal injury insurance with their three-year liability insurance.
Long-term insurance extensions for two-wheelers
It is much more convenient to have to renew a policy every two to three years than to renew it annually, especially if you have more than one policy. When a policy expires, the insured has a lot of trouble renewing the policy. In the event of an accident after the renewal date, the insured cannot make any claim either.
Also, the insurer may insist that the vehicle be checked before renewing the policy or issuing a new policy. It can also be difficult to find an insurer who wants to insure your car if it has been a long time since your policy expired. The risk of such complications when you have long-term insurance for two wheels is much lower.
Premium rates for long-term two-wheel insurance
Premium rates for liability insurance increase from year to year. IRDAI increases liability insurance premiums by 20% each year. If you bought long-term auto insurance, your premiums would not change within three years of signing the policy.
No entitlement bonus
Long-term insurance policies for two-wheelers have an additional advantage over short-term insurance policies when it comes to the no-claim bonus (NCB), as is the case with some insurance policies. A PNE is a discount granted to the insured for the following contract year if they have not made a claim in the previous year.
The no-claim bonus tranches for long-term contracts on two wheels are cheaper than for short-term contracts. For example, ICICI Lombard is offering the first customer the same NCB discount that they received with their previous contract. So if you earned 30% NCB from a previous insurer in the previous year, ICICI Lombard will give you the same bonus when you buy your first long-term contract.
Some long-term policies may offer a higher BCN at the end of a 3-year policy as opposed to the cumulative single BCN at the end of three years for short-term policies.
Long-term two-wheel insurance termination/rescission
Some insurance companies also provide refunds to policyholders in certain cases where a policy is canceled or terminated. For example, in the event of loss or theft, ICICI Lombard offers a refund of up to a certain percentage of the premium for full years unexpired on your long-term policies, a benefit that is not available on one-year policies.