SINGLE YEAR VS MULTI YEAR TWO WHEELER INSURANCE WHICH IS BETTER

Every person with a two-wheeler must purchase a third-party two-wheeler insurance policy. Buying a two-wheeler insurance policy is mandatory per the Motor Vehicles Act of 1988.

Despite the regulation, in India, approximately 75% of owners of two-wheelers have uninsured vehicles. The reasons for not choosing insurance for their vehicles are several. Some people don’t want to invest their money in an insurance policy for their two-wheelers.

On the other hand, several people forget the renewal date of the insurance policy. The Motor Vehicle Act considers riding a motor vehicle illegal without a motor insurance policy. Thus, it has been notified that owning an insurance policy for your noteworthy vehicle stands way too necessary.





 

Definition Of Multi-Year And Single-Year Two-Wheeler Insurance For Vehicles

Single-year two-wheeler insurance policies are the traditional insurance types. The single-year term insurances cover the insured services for your two-wheeler for a single policy year. The single-year plan also needs an immediate renewal every year to validate your driving permit.

Multi-year two-wheeler insurance policies are more advanced than the previous ones. This insurance policy ensures your two-wheeler for five consecutive years. Therefore, if you choose a multi-year insurance policy for your vehicle policy, you can enjoy a 5-year TP and 5-year OD at a single time.

The Supreme Court of India made it mandatory to take a five-year insurance policy for two-wheelers in a directive in 2018. The apex court guided that you will not need to renew your insurance plan annually by taking a multi-year insurance policy for two-wheelers. Therefore, it enables you to enjoy long-term coverage for your two-wheeler.

Why You Must Choose Insurance For Your Two-Wheelers

The Insurance Regulatory and Development Authority (IRDA) has introduced a multi-year two-wheelers insurance plan. Choosing an insurance plan for your two-wheelers has several advantages.

Convenient Insurance Terms

There will be no need for the owner of a two-wheeler to renew the insurance plan every year by choosing a multi-year insurance plan for your vehicle. Often, it is challenging to remember the due date of the insurance policy renewal date.

Further, even after remembering the date and failing to renew the insurance plan in time for several other personal or financial issues, you may have to pay a reasonable amount as a fine to renew the plan.

In this scenario, it is wise to choose a multi-year plan to relieve yourself from the stress of renewing your insurance annually.

Less Complicated

The Motor Vehicles Act of 1988 has made it mandatory that riding a two-wheeler without having a valid insurance will be punishable according to the Indian law. Further, if your two-wheeler faces an accident without having vehicle insurance for your two-wheeler, you will not get any compensation for the loss of your property.

It is often considered better to ride a two-wheeler with a lapsed policy rather than having no policy for your two-wheeler at all. Moreover, if there is a large gap between policies, it will be considered ‘policies Break-in’. The bike insurance for 1 year policies can result in a premium hike for the existing vehicle insurance.

Therefore, a multi-year two-wheeler insurance policy will be the right choice for you to choose for your two-wheeler.

Advantageous Premium For Third-Party

Comprehensive insurance policies for the two-wheelers have a long term. Therefore, a multi-year plan will be adequate to save you from sudden hikes in annual premiums for a third-party policy in two-wheeler insurance.

IRDA sets the premiums for Third-party insurance policies, and these premiums can increase suddenly by 10-15% annually. However, a two-wheeler insurance policy with a multi-year, relieves you from such annual abrupt hikes in insurance premiums.

That outset premium for one-time payment would be adequate for the consecutive five years or the entire period of the policy.

NCB Advantage Insurance Policy

The comprehensive two-wheeler insurance policy offers a notable ‘No Claim Bonus’ for every single policy period that is claim-free. Most insurers will provide you with a 90-day grace period even after the policy expires.

The grace period is offered to allow you to renew your policy and retain the NCB. However, if you still fail to renew the one-year insurance for a bike within a specified tenure, your NCB, in that case, will be invalidated.

That being said, multi-year bike insurance relieves you from keeping a constant eye on the notable NCB period. A multi-year insurance plan is going to stay prevalent for a period of 5 consecutive years. The calculation of a multi-year NCB slab differs from its counterpart, a single-year insurance plan.

Overall, a multi-year two-wheeler insurance policy is known to proffer more flexibility, protects you from non-renewal risks, saves money from annual premiums, and smooth functioning of NCB. 

FAQs - Frequently Asked Questions

Q1. Is it compulsory to buy 3-year insurance for my two-wheeler?

NO, The Supreme Court of India has established guidelines for long-term third-party insurance. It is compulsory for every two-wheeler and includes a 5-year long-term package. If you have a four-wheeler, you may need a 3-year plan for car insurance​.

Q2. What is the new rule of vehicle insurance?

In India, it is mandatory to choose at least a third-party vehicle insurance to ply any vehicle on the road. In the case of two-wheelers, buyers must choose a multi-year insurance plan.

Q3. Is it mandatory to choose insurance for my vehicle?

Yes, you must choose insurance for your vehicle as per the Supreme Court of India.