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When it comes to the security of your bike, nothing is more valuable than an insurance policy. If you have bought a car or bike insurance in the recent months, you must have questioned this at least once, is bike insurance mandatory for 5 years? If you ask us, yes, if you purchase a new bike or car, there will be a mandatory long term insurance policy that you need to buy. There must be many questions whirling in your mind right now. But, need not worry, we will enlighten you with all the necessary information regarding this new rule.
A 5-year two-wheeler insurance policy is a long-term insurance plan that offers coverage for your bike for a duration of five years, providing a comprehensive shield against accidents, damages, and third-party liabilities. Unlike traditional annual policies, a 5-year insurance plan offers extended coverage and benefits at a fixed premium rate, which can help you save on renewal hassles and fluctuating costs. How It Works:
Before moving on to this question, let us study the new changes in the insurance rules and regulations. As per IRDAI (Insurance Regulatory and Development Authority of India), if you buy a new two-wheeler, it is necessary for you to get a long term bike insurance policy. This rule has been in effect from September 2018. The term period of the long term insurance policy may vary based on the type of policy you are buying. For instance, if Gaurav has bought a new two-wheeler, he will have to buy a long term insurance policy for five years if he is opting for a third party insurance policy. On the other hand, if Gaurav’s sister buys a new scooty for herself, she has to buy the long term two wheeler insurance policy for three years if she is choosing the comprehensive policy cover. The answer to the question is 5 years insurance mandatory also varies based on the vehicle you are purchasing. For instance, if you are buying a new car, you are entitled to get three-year insurance instead of five.
Roads can be really dangerous if you are not careful. If in any case, some mishap takes place, your insurance can help you cover the damages. But, some of us do not consider insurance a beneficial investment. To be honest, it is pretty crucial to have insurance. Moreover, the Motor Vehicle Law, 1988, mandates the riders to get an insurance policy. And as per new rules, it has also become necessary to buy a 5-year policy when you are buying a new two-wheeler. The question that surfaces here is, Why is 5 years insurance mandatory?
The very first and best benefit of buying a long term insurance policy is the stress-free mind. With a 5-year third party cover or 3-year comprehensive cover, you will be free from the hassle of renewing the policy every year. It will save you a lot of time and most of all you don’t have to keep expiry dates in mind.
You also save a significant amount of money by buying a long term insurance plan for your vehicle. How? The one-time premium that you pay for a three or 5-year cover will be way less than the compiled annually paid premium amount for the same period.
NCB stands for No Claim Bonus. It is a discount that a rider gets on renewing his or her policy for making no claim in the past year. In case of an annual policy, if you have filed a claim, your no claim bonus will be Nil. On the other hand, if you have a long term policy and you make a claim. Your NCB will not hit zero. You can still avail some percentage of discount on your policy premium.
Unlike the annual policy where there is no refund. The long term insurance plan provides you a refund in certain scenarios. For instance, if Gaurav loses his bike or it gets stolen, he can get a refund from his insurer if he has a long term policy. However, the refund amount (of the paid premium) will vary based on the time not utilised or the balance years of the policy.
After all, you will be in safe hands when you have a long term insurance policy. It will cover all the damages based on its type if any mishappening occurs.
Comprehensive 5-year insurance offers extensive coverage, including both own damage and third-party liabilities. It protects your bike from various risks like accidents, theft, fire, natural disasters, and damage caused to a third party. This policy provides the most complete coverage and ensures long-term protection for your bike, making it ideal for those who want extensive security over five years.
A mandatory insurance policy, third-party insurance covers only damages or injuries caused to a third party in the event of an accident. It does not cover any damage to your own bike. While this option is more affordable, it provides limited protection, focusing solely on legal liabilities towards others. It's suitable for individuals seeking budget-friendly coverage without extra frills.
Standalone Own Damage insurance covers only the damages to your bike, excluding third-party liability coverage. This policy is ideal for those who already have third-party insurance in place and want to protect their bike against accidents, theft, or other damages. It’s a cost-effective option for individuals who do not need full comprehensive coverage but still want to safeguard their vehicle.
Long-term policies can be enhanced with additional benefits like zero depreciation cover, engine protection, roadside assistance, and personal accident cover. These add-ons allow customization of the policy to meet specific needs. Whether you're looking for extra protection against wear and tear or want a 24/7 emergency support feature, these add-ons make the policy more comprehensive and suited to your unique requirements.
A 5-year bike insurance policy provides continuous coverage for five years without the need for annual renewals. This long-term coverage ensures peace of mind, as you don't have to worry about renewing your policy each year.
Purchasing a 5-year bike insurance policy often comes with a discount on premiums compared to renewing annually. Insurers offer attractive discounts for opting for long-term policies, making it a cost-effective choice.
By locking in your premium for five years, you avoid any potential increase in insurance costs over the years. This helps you save money in the long run, especially if premiums rise due to inflation or other factors.
A 5-year policy eliminates the risk of forgetting to renew your insurance each year. This ensures that your bike remains insured without any lapses in coverage, which is crucial for maintaining legal and financial protection.
Renewing a bike insurance policy can often be cumbersome, involving repeated documentation. With a 5-year policy, you eliminate the need for yearly paperwork and administrative tasks, saving both time and effort.
A 5-year insurance policy offers convenience by reducing the frequency of renewals and minimizing the chances of missing out on coverage. It simplifies the process, offering more stability and certainty.
A 5-year policy typically offers comprehensive coverage, including both own damage and third-party liability. This ensures that your bike is protected against a wide range of risks for an extended period.
NCB (No Claim Bonus) is a reward provided by insurance companies to policyholders for not making any claims during a policy term. On a 5-year bike insurance policy, NCB is calculated as follows:
NCB rewards claim-free behavior, and on a 5-year policy, this bonus can lead to significant discounts on future premiums, making it beneficial for long-term policyholders. Also Read: 9 Common Mistakes to Avoid When Renewing Bike Insurance
Buying long-term two-wheeler insurance, such as a 3-year or 5-year policy, can have several impacts, both positive and negative. Here's how it affects you:
Also Read: How To Check Bike Insurance Policy Status Online
Yes, if you have 3rd party bike insurance, it’s great for your two wheeler. However, if you are buying a new vehicle, it is best to opt for a comprehensive package for at least 2-3 years.
There are two types of policies, namely, third party and comprehensive. Although you can choose any of it for your bike, it is mandatory to have at least a third party insurance.
No, buying a 5-year policy is not mandatory. It's an optional choice for those who prefer long-term coverage and want to avail discounts. Annual or 3-year policies are still available.
No, a 5-year policy provides coverage for five years, so no renewal is needed during this period. However, once the policy term expires, you’ll need to renew it for continued coverage.
Bike insurance is required by law for all bikes in India. While third-party bike insurance is mandatory for all, comprehensive coverage is recommended for additional protection. The insurance term can range from one year to five years.
The cost of bike insurance renewal depends on the bike’s make, model, age, and coverage type. For a comprehensive policy, the renewal cost can range from ?1,000 to ?10,000 or more, depending on these factors.
Third-party bike insurance is mandatory as per Indian law. It covers liabilities arising from accidents, injuries, or damage caused to third parties. Comprehensive insurance is optional but recommended for broader coverage.
A two-wheeler can be used for several years, with no fixed limit. However, the lifespan depends on maintenance, usage, and legal regulations regarding vehicle fitness. Typically, two-wheelers last up to 10-15 years, but this varies based on condition and model. *Standard T&C apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
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