Why you must opt for long-term two-wheeler insurance coverage

0
636
Why you must opt for long-term two-wheeler insurance coverage

A significant number of two-wheelers are uninsured beyond the first year. As a result, the government has made it mandatory for new two-wheelers to come with a 5-year bike insurance plan, ensuring more insured vehicles on the road, for longer. Not only are long-term two-wheeler insurance plans convenient, but they’re also less expensive than yearly plans, making their adoption easier. 

India is infamous for the highest number of road accidents and fatalities in the world. According to a 2021 government report, there were over 4 lakh recorded road accidents, with over 1.5 lakh deaths and nearly 4 lakh injuries. World Bank estimates that India pays up to 5% of its GDP yearly due to road accidents. 

To reduce the total social cost to its citizens, the government has made third-party insurance coverage mandatory for all vehicles on the road. Unfortunately, nearly 60 per cent of vehicles are uninsured, most of which are two-wheelers, according to data from the Insurance Regulatory and Development Authority of India. The report further states that nearly 52% of two-wheelers didn’t renew their insurance after the first year. 

Multi-year insurance policies

This is where multi-year or long term two wheeler insurance policies come in. Two-wheeler insurance policies have historically been single-year policies, requiring renewal every year. This renewal is susceptible to forgetfulness, causing policies to lapse. As a result, the IRDAI has made it mandatory for new two-wheelers to come with a 5-year insurance cover. This will ensure that more two-wheelers are insured for longer while minimising the risk of lapsed policies. Meanwhile, two-wheelers bought before the ruling can avail of a 3-year long-term two-wheeler insurance policy to remain continually insured. 

Types of long-term two-wheeler insurance policy

There are two types of long-term two-wheeler insurance policies:

Long-term third-party liability cover

The third-party liability cover is mandatory for all vehicles to ply the road. In this case, the first and second parties are the policyholder and the insurer, respectively. The third party is the entity involved in the accident. Therefore, in case of injury to a third-party, your third-party liability policy can cover the person’s medical expenses. Similarly, in case of damage to their property (including their vehicle), your policy will help pay for the damages up to the specified limit, limiting your out-of-pocket expenses. 

The advantage of third-party liability policy is that it is cheaper than comprehensive insurance policies, lowers the barrier to insurance adoption, and provides adequate coverage. It takes care of your financial obligations to a third party, mitigating out-of-pocket expenses. However, its coverage is limited to the third party. Damage to your vehicle is not covered under this type of policy. For complete financial protection, there’s the long-term comprehensive two-wheeler insurance policy.

Long-term comprehensive cover 

This policy offers coverage against vehicular losses arising due to natural and man-made disasters, including fire, floods, theft, etc. Moreover, damage to your bike as a result of an accident is covered under this policy. You can also avail of add-ons to the policy for rounded coverage. These add-ons include ‘zero depreciation cover’ that compensates against the depreciated value of the parts that need repairing or replacing after an accident. Or the ’emergency assistance cover’ that provides 24×7 road assistance. 

While many people think that tragedies won’t happen to them, an accident can occur without warning and with no fault of your own. And repairing the damage done to your bike is an expensive affair. In an underinsured country, it is usually an out-of-pocket expense, which is why it’s almost always recommended to opt for a comprehensive long-term two-wheeler insurance policy. 

Features and benefits of long-term two-wheeler insurance

While the upfront cost of a long-term two-wheeler insurance policy can be a deterrent, it is only a fraction of the cost of the vehicle itself, and the benefits far outweigh the costs. 

  1. No annual renewal

With a long-term policy, there’s no worry about renewing your policy every year, keeping you insured continually. 

  1. Lower premium

The government revises the price of third-party insurance coverage yearly, which is usually hiked. With a long-term policy, you are unaffected by the hike in policy rates. Furthermore, long-term policy premiums come with attractive discounts to begin with, so you end up paying lower than if you were to renew your policy every year. 

  1. Longer protection

With at least 3 or 5 years of protection, you can rest assured that there won’t be significant out-of-pocket expenses for the policy duration.

  1. Easy cancellation

Being locked-in for the long term doesn’t have to feel restrictive. You can cancel your insurance policy hassle-free. 

For anything bought with a long-term view, there must be ample thought and consideration going into making that decision. Similarly, there are points to note when buying a long-term two-wheeler insurance policy:

  • Ownership duration

A long-term bike insurance policy makes sense for a new bike, given that you would own the bike for at least three years. However, for older bikes, if you do not intend to keep hold of the bike for another three years, the policy may not the right one for you. 

  • Add-ons

Selecting add-ons increases the cost of insurance, so it’s important to understand the cost-benefit through the course of the policy duration. Certain insurers convert historical add-ons to standard comprehensive insurance package benefits to attract customers. For example, the free pick-up and drop service, which was an add-on, now comes standard with a comprehensive insurance policy.

  • The insurer

The insurer must have a large network of service garages and a high claims settlement ratio. Also, read reviews from existing policyholders about the insurer to inspire confidence before making your decision. 

Conclusion

In conclusion, HDFC Ergo long-term two-wheeler comprehensive insurance policy offers a range of benefits to ensure your peace of mind while you ride your bike. With features such as cashless claim settlement, extensive coverage, and easy policy renewal, you can rest assured that your two-wheeler is protected against all unforeseen circumstances. The policy also offers add-ons that can be customized to suit your specific needs. With HDFC Ergo two wheeler insurance, you can enjoy the freedom of the road without worrying about financial liabilities in case of accidents or damage.

Comments are closed.