Two-Wheeler Insurance: Do You Need an Annual or a Multi-Year Policy?

Do you use two-wheeled vehicles in your business? If you do, you need two-wheeler insurance.

Two-wheeler insurance is an agreement between the insured, or the owner of the two-wheeled vehicle, and the insurer. The agreement is a promise by the insurer that they will provide financial assistance in certain circumstances.

The contract starts when the insured makes a premium payment. It continues as the insured continues making premium payments at agreed-upon intervals.

If you’re the insured, you should fully read and understand the contract. Further, both parties must sign it. Two-wheeler insurance provides monetary assurance to the vehicle owner against damage by accident. It also covers third-party liabilities due to any unfortunate event.

What Are Third-Party Liabilities?

It’s important to understand third-party liabilities. These include liabilities for any injury suffered by a third party. It also includes liabilities for damage to a third-party vehicle or other third-party property.

 

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Who Must Have Two-Wheeler Insurance?

Anyone in India who owns and uses a two-wheeled vehicle must have two-wheeler insurance. Coverage is mandated by law. Therefore, not having insurance can result in legal action.

Below are some of the benefits of two-wheeler insurance:

1. Premiums for two-wheeler insurance policies are easy on the wallet.
2. Your insurance will pay the expenses arising out of accidents and other mishaps.
3. Two-wheeler insurance provides you with roadside assistance. You’ll be able to make a cashless claim. Further, you’ll have coverage for theft and robbery, plus other benefits.
4. Choose between an annual policy or a multi-year policy.
5. You have your choice of either comprehensive or third-party insurance.
6. With a multi-year policy, you’ll only need to renew once every three years.

When you hit the road on your two-wheeler, you expose yourself to a lot of unforeseen events. No matter how expert a rider you are, you might have to pay for the mistakes of others. Insurance gives you peace of mind. You’ll know that even in the case of a mishap, your insurance company will assume the financial burden.

 

Types of Two-Wheeler Insurance Plans

There are two main types of insurance plans available in India for owners of two-wheeled vehicles:

• Comprehensive Insurance

A comprehensive insurance policy will cover your own vehicle in case of an accident. Additionally, it will cover third-party liabilities in case of an unforeseen incident.

• Third-Party Liability Coverage

As the name suggests, this policy covers only expenses arising from third-party liabilities.

 

Introduction to Multi-Year Two-Wheeler Insurance

Annual insurance policies come with the stress of having to renew the policy on time each year. If you happen to be even a little late with paying your premium, your coverage will lapse.

Multi-year insurance policies, on the other hand, allow you to insure your two-wheeled vehicle for three consecutive years. This gives you a longer period of stress-free riding.

Benefits of Multi-Year Two-Wheeler Insurance

• Provides you with both third-party liability and damage coverage for your own vehicle.
• Includes personal accident coverage for the owner/driver along with co-passengers.
• Provides cashless claims.
• The insurer will issue your policy online at any time.
• A porting option is available. This means you can switch your two-wheeler insurance from one insurer to another.

 

Introduction to Two-Wheeler Annual Insurance

As the name suggests, this insurance policy needs renewal every year. Any delay in the annual premium will cause the policy to lapse. However, this type of policy has a lower premium as compared to multi-year insurance. Of course, that’s because of its shorter duration.

 

 

Comparing Both

Should you go for the extended time and longer-term hassle-free riding? Or should you choose annual renewals and a lower premium? Let’s compare:

• Save on Premiums

The premium for the annual policy appears smaller. However, you will actually save as much as 20-40% with a multi-year policy. That’s because the authority for insurance in India, IRDAI, raises the third-party portion of premiums by up to 20% each year. However, by choosing a multi-year insurance policy, you’ll avoid this annual hike. This makes the multi-year policy for two-wheeler insurance an advantageous choice.

• Renewals

Paying your insurance premiums only once every three years can be less stressful than renewing your policy annually.

• Duration of Protection

With a multi-year insurance policy, you get to enjoy a longer term of insurance protection. That’s because you will enjoy three continuous years of protection. What’s more, the premium for annual policy renewal tends to rise every year.

• Cancellation

Nearly all insurers have planned multi-year insurance in such a way that policy cancellation is easier.

With an annual plan, if you make a claim for vehicle theft or loss, you won’t be eligible for a premium refund. But with a multi-year plan, you would receive a refund equal to a certain percentage of the premium for all unexpired years.

However, terms and conditions vary from one insurance company to another. Therefore, be sure to review these terms closely before you purchase a policy.

 

Conclusion

Be sure to conduct a thorough online comparison of insurance policies. Look for a two-wheeler insurance policy that best fits your budget and aligns with your preferred criteria.

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