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Why Should You Opt for Long-Term Third-Party Car Insurance?

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Published on September 08, 2022. EST READ TIME: 3 minutes

A lot of us aspire to buy a car in India. We spend a considerable amount of time and effort in deciding which car would fit our needs as well as our budget. As important as it is to finalise a car with adequate features, you must not forget about third party car insurance since it is a legal requirement and is much needed for driving on the roads.

The Motor Vehicles Act mandates all vehicles must have a third-party liability policy to be legally driven on public roads. The policy keeps you safe from any incidents involving third party individuals, properties, or vehicles.

What is Third-Party Car Insurance?

As per a report by the Supreme Court in 2018, a considerable number of vehicles in India remain uninsured. In fact, one in every three vehicles was found not to have a third-party liability policy. The report also outlined that about 40% of cars older than three years were uninsured.

To ensure that fewer uninsured vehicles are on the road, the Supreme Court gave the order in July 2018 that all new vehicles sold will have long-term third-party insurance. This is applicable to all vehicles that were sold after 1st September 2019. The mandatory long-term insurance was for a duration of 5 years for two wheelers and 3 years for four wheelers.

Before we delve into the benefits of opting for long term third party car insurance, it is pertinent to know what third party insurance is.

Third-party car insurance is a statutory requirement policy, and it offers protection against damages to third party vehicles, property, or individuals. This does not offer any sort of protection to the insurer directly.

In the event of an accident, the insurance provider will offer financial assistance to take care of the repairs related to the third-party property. Thereby reducing any burden that you might have from the accident.

If an accident takes place, you need to inform your insurance provider at the earliest about the same and file a claim. Your insurance provider will most likely send a surveyor to assess the damages and get an estimate for the repair cost. Once the insurance company completes its verification, they settle the claim.

What Are The Benefits of Long-Term Third-Party Car Insurance?

Long-term third-party car insurance or a multi year third party car insurance brings many benefits to the table. For starters, it protects you against any third-party claims that might arise from accidents. It even compensates in the unfortunate event of personal injury or death. The long-term plan is especially beneficial to people who miss deadlines to renew their policy and face financial consequences as a result of it.

Here are some benefits you can enjoy as a part of long-term third-party car insurance.

1. Lower Risk:

If you forget to renew your car insurance , it can lead to an array of unwanted expenses. If there are any repairs or fixes on your vehicle, the onus is entirely on you to pay the same. The expenses can amplify to some extent if your car, unfortunately, meets with an accident. Long-term third party car insurance protects you from such occurrences. Also, every year during car-renewal, you might have to get your car examined by the insurance provider. Should you choose a long-term plan, you can save time from such inspections.

2. Convenience:

Though nobody does it intentionally, missing the renewal date is quite common. Furthermore, you can stand to lose some of the benefits if you forget to renew the policy before its expiry. Thus, renewing the policy on time is crucial. This is where a long-term plan outshines. You need not renew the policy coverage every year.

These plans can be extremely helpful to people in professions with a lot of stress. Also, people who juggle a lot of commitments will appreciate the benefits of this plan. A long-term plan eliminates the need to inspect the car before renewal every year.

3. Better Discounts:

Insurance providers usually offer discounts on a three-year policy for your car. When you compare this with a plan you renew yearly, you will most likely save more. If your car is equipped with an anti-theft device or you are a member of an automobile organisation that is recognised, you can avail of additional discounts. This will help you further reduce the cost of your policy premiums.

4. No Claim Bonus Transfer:

If you do not make any claims on your policy during the previous year, the no-claim bonus is carried forward to the next year. Some insurance providers offer even higher discounts on a no-claims bonus with a long-term plan as compared to short-term plans. Also, should you decide to sell your car, you can transfer the no-claim bonus to the new car. Thereby continuing with the same benefits.

5. Immune to Price Hikes:

The IRDAI regulates the premiums of third-party policies every year, after looking into some parameters. Almost every year, the policy premiums for third party policies increase considerably. When you opt for long term third party car insurance, you can save anywhere between 20% to 40% every year on premiums.

6. Avoid Expiry:

One of the biggest benefits of opting for a long-term plan is that you no longer have to worry about policy expiry. If you drive around with an uninsured vehicle, it is a punishable offence. You can receive a penalty of up to Rs. 2,000 or imprisonment of up to 3 months or both. When you opt for long-term insurance, you do not have to worry about the policy expiry in between.

Conclusion

Opting for long-term third-party car insurance brings in a host of benefits. Primarily, it keeps you away from the hassle of renewing your car insurance policy every year. Apart from that, you can avail better discounts, a higher no-claim bonus, coverage for a longer period of time and not have to worry about regular price hikes of insurance policies.

If you feel that the coverage isn’t adequate, you can opt for own damage cover to enhance the coverage of the policy. It is recommended that you compare different third party car insurance policies before you buy one, thereby letting you pick the best policy out there.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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