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Know Why Multi-Year Bike Insurance is Better than Annual Policy

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Published on September 13, 2021. EST READ TIME: 4 minutes

Here’s the thing about bike insurance – you cannot just buy it and then forget about it. It is essential to renew insurance for 2 wheeler on time, as riding without one is illegal in India. Moreover, in case of an accident, fire, theft or a natural calamity, any damage done to your bike won’t be covered by the insurer if your policy has lapsed. Now, the problem is, most bike owners forget to renew their insurance on time and often end up paying hefty fines to the traffic police. In order to address such issues, the IRDAI and insurance companies have started selling multi-year insurance for 2 wheeler. So, if you have purchased a new bike, you will get a single year comprehensive insurance and a five-year third-party cover as part of your policy. You can go for multi-year plans too though. But if you are not sure how to decide, read on.

Single year bike insurance policy:

This is the classic way of insuring your motorcycle. Here you are required to purchase an insurance policy for your vehicle on an annual basis. Your policy will comprise of:

• One year of third-party liability insurance, which is the basic legal requirement for driving a vehicle on a public road.

• One year long own damage cover for your bike, which will provide you protection for your vehicle in case it meets with an accident or gets stolen.

• One year personal accident cover of Rs 15 lakhsas mandated by IRDAI.

• Any add-ons that you may choose for the duration of the policy like engine protection or roadside assistance.

Multi-year bike insurance policy:

In this case, the insurance company will insure your bike for more than one year. The current available options are two-yearand three-year insurance plans where you will get cover for the entire duration of the policy that you choose. In this plan, you will get:

• Third party liability cover for 2 or 3 years, as per the plan

• Own damage cover for 2 or 3 years, as per the plan

• Personal Accident Cover of Rs 15 lakhs for 2 or 3 years

• Add-ons that you have selected for 2 or 3 years

Advantages of a multi-year policy

1. Protection from policy lapse and cover loss:

With a multi-year bike insurance policy, you get long-term cover! This means that you will remain safe from the risk of the policy becoming invalid. Buying it once means you will remain under the insurance protection for multiple years. You do not need to worry about traffic police challans or no cover being available when needed.

2. Financial safety for future:

Imagine that you have got a one-year plan, but when the time comes to renew the policy, you have no money to spare! No one can predict their financial situation one or two years down the line. But if you purchase a multi-year insurance for 2-wheelertoday, you can make yourself safe for the next 2-3 years. Plus, you get time to save money for the next renewal.

3. Freedom from tracking policies:

In case of a single year policy, you need to keep track of it on an annual basis. This is usually simple for someone with one vehicle. For people who own multiple vehicles, things can become complicated. Multi-year policies keep things simple because the tracking frequency decreases.

4. Penalty protection:

If your policy expires, you may be required to pay penalties or inspection charges to get it renewed. This is an easily avoidable expense. With a multi- year policy, you have a much longer period between bike insurance policy renewals,which means you can avoid the penalty.

5. Price lock-in:

This is perhaps the most attractive feature that would convince anyone to buy a multi-year insurance plan. The insurancecoveryou get in a multi-year plan will be available at today’s price structure as decided by the insurance company. You will be safe from any ‘own-damage insurance’ or add-on price increase in future till your policy lasts.

6. Instant No-Claims Bonus:

This When you buy a policy on an annual basis, you will have to wait for the next year to reach the next step of accumulating no-claims bonus. With multi-year insurance for 2-wheeler, you get the bonus for subsequent years at their applicable rates, immediately!

7. Save on taxes:

Buying insurance means you are going to pay GST or any other applicable tax on it. Usually, taxestend to shoot up with time. With a multi-year insurance policy, you can pay taxes for up to the next three years at current tax rates, which makes more sense.

8. Save on any increment in third-party cover costs:

Buying As with taxes, the price for third party cover is regulated by the government through IRDAI.So, they also tend to rise regularly. Again, the multi-year policy can keep you safe against this inevitable price hike.

To sum up, based on the pointers mentioned above, getting multi-year insurance is better than annual 2 wheeler insurance. It will not only save you a lot of money, but also give youpeace of mind.

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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