Benefits of Long-Term Two-wheeler Insurance

It is mandatory by law to buy motor vehicle insurance coverage at the time of purchasing a two-wheeler. You must have a valid insurance cover as long as you are driving a two-wheeler. This insurance coverage safeguards you from unexpected costs at the time of any accidents.Although the number of two-wheelers purchased in the country is increasing every year, the insurance bought against them is decreasing. This goes on to show that most two-wheelers are running without insurance.One of the major reasons for this is negligence towards renewing the insurance in time. To tackle the same, the Insurance Regulatory and Development Authority (IRDA) has introduced a long-term two-wheeler insurance coverage.Insurance companies have been quick to adopt this long-term two-wheeler insurance, as it allows them to save administration costs, thus increasing their profit margins. Though both yearly and long-term plans are roughly the same, the latter is being chosen by most buyers because of the following advantages over yearly insurances.

• Longer duration of validity: The biggest advantage of buying long term insurance coverage is that you do not need to constantly keep in mind the date of policy renewal. This, in turn, helps in avoiding gaps between insurance, hence safeguarding you against any mishap for a longer period of time. Since the duration of the coverage is more, you also do not need to renew the policy repeatedly. This saves considerable costs as the insurance company can levy a heavy charge on the premium at the time of renewable. Some can also demand an extensive check of your two-wheeler, making it an arduous task.
• Lower premium price: Long term insurance plans are usually priced lower than yearly plans, as they allow insurance companies to save on administrative and processing costs. In addition to this, you also end up saving yourself from inflation costs that impact the premium price annually.
• No penalties: In India, driving a two-wheeler without insurance is a punishable offence. If caught with invalid insurance, you could be imposed with a heavy fine. On top of that, driving without insurance and getting into an accident can end up costing you a lot more.
• Fixed premium rate: On buying yearly insurance, third party premium rates go up by 10-15% every year, to compensate for your own damage and other factors. As opposed to this, by buying long-term insurance for a two-wheeler, you can benefit from a fixed premium rate, which ensures additional savings.
• Easy policy cancellation: A long-term insurance policy is not binding until the policy end date. You can easily withdraw from it and receive the unutilized amount. The only thing to keep in mind is to buy another policy before withdrawing the insurance.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.