Long-Term Two-Wheeler Insurance Options and Their Advantages

A vast majority of the Indian population uses two-wheelers these days, as they are more affordable than cars and require lesser maintenance as well. However, like any other machine, a bike is prone to accidents, thefts, damage during transportation from one place to another, or damage from natural calamities. In such cases, two-wheeler insurance can protect both the vehicle and the owner against financial liabilities if an accident or damage occurs. But most bike owners avoid getting insurance due to inconveniences like repeated vehicle inspections and the hassle of policy renewal after a lapse in the renewal date, although a motorcycle owner is bound to have a third party insurance. Luckily, there are many long-term two-wheeler insurance plans available today, which doesn’t require you to go for frequent policy renewals. Moreover, they act as a security against unforeseen events.

Types of Two-Wheeler Insurance

1. Liability Only Insurance Policy – This policy is legally binding in India and also known as Act Only policy. It not only covers the owner of the two-wheeler, but also any loss, property damage, physical injury or death of a third party caused by an accident with the insured bike.

2. Comprehensive Insurance Policy – This one covers all that a Liability Only Policy does, and also covers the theft or damage of the vehicle. This policy is optional in nature and known as Package Policy too.

3. Own Damage Policy – Under this policy, a two-wheeler is insured against damages or losses caused by these four situations:

   a.  Theft, burglary, strike, riots, terrorist activities or malicious intentions

   b.  Accidents that happen through unforeseen external means

   c.  Natural disasters such as flood, lightning, fire, earthquakes and such

   d.  Damage caused during travel on road or transportation via rail, water or air

Advantages of Long-Term Policy

1. Convenience – When you avail long-term two-wheeler insurance, you don’t have to go through the hassle of renewing it every year. You don’t have to remember renewal dates, which especially help if you have multiple policies. Such long-term policies also prevent situations where you accidentally fail to renew the policy even if you remember the date.

2. Avoid non-renewal related risks – Non-renewal of a yearly policy means your vehicle will be uninsured till you go for the renewal. This is risky because if your two-wheeler meets an accident or is stolen during the uninsured period, you have to bear the entire financial loss on your own. A long-term policy will help you avoid this problem for at least a few years.

3. Avoid problems of renewing a lapsed policy – Often, after a policy lapses, some insurance companies insist on examining your vehicle closely before renewing the policy. But if you purchase long-term insurance, you don’t have to take this hassle as your policy will not lapse for two to three years or more, depending on the tenure.

4. Discount on own damage premium – For long-term two-wheeler insurance policies, many companies these days offer discounts on the own damage part of the premium. Since insurers get to decrease policy-issuing and administrative costs with long-term policies, this saving goes to the vehicle owner in the form of discounts. The discount value can differ from one company to another though. However, discounts on long-term policies are always higher than yearly ones.

5. Premium rate is frozen for three years – In annual insurance policies, the premium rates increase every year, usually. An insurance company can also hike the own damage premium depending on policy coverage and their claims experience. But if you choose long-term insurance, you will be protected against such hikes during the tenure.

1. No-Claim Bonus – The no-claim bonus in long-term two-wheeler insurance doesn’t become zero after you make a claim, which is unlike annual policies. To understand this, imagine X and Y avail an annual and long-term policy respectively. Both get 20% of the no-claim bonus in the first claim-free year and this gets accumulated in every claim-free year. But after 3 consecutive claim-free years, X will have 35% of the bonus while Y might get 40% or more. However, if X makes a claim in the second year, his bonus will become zero. For Y though, even if he makes a claim in the second year, his bonus will be definitely more than zero, based on the policy of the insurance company.
    

All in all, it makes sense to go for long-term two-wheeler insurance, as they are not only convenient, but you will also benefit from steadier premium rates, more discounts and greater no-claim bonus. And since they come in different varieties, you will get to protect yourself as well as your vehicle from almost all kinds of damages, thefts, and accidents. It’s a wise way to keep your financial liabilities to a minimum in case of untoward incidents.