Is Two Wheeler Insurance Mandatory For 5 Years?
Published On Jan 22, 2021 10:00 AM By InsuranceDekho
It has recently been made mandatory by IRDAI (Insurance Regulatory and Development Authority of India) for all new two-wheelers to be issued with a 5 year insurance policy. Read all about this step and clear any doubts you may have regarding it.
The highest insurance regulator in the country, IRDAI, makes changes in rules and regulations of vehicle insurance from time to time. The increasing number of two wheelers plying on Indian roads as well as the rising numbers of uninsured bikes and road accidents, IRDAI has made a recent change in two-wheeler insurance regulations which states that it is necessary for every new two-wheeler to be issued with a long term insurance policy for 5 years.
How Does 5 Year Two Wheeler Insurance Work?
The change made by IRDAI to make 5 years' two-wheeler insurance mandatory was prompted by a Supreme Court ruling in September 2018. The intention behind this is to make sure that the maximum number of two-wheelers on the roads are insured and to reduce the number of cases of accidents with lapsed or expired policies or uninsured vehicles. Let’s read all about how this works.
It is important to note that the minimum 5 year tenure is compulsory only for third party insurance plans. If you choose a comprehensive two-wheeler insurance cover, then your policy tenure will be for 3 years as opposed to 5 years. A minimum of third party cover at all times is already compulsory under the Motor Vehicles Act of 1988.
How Does This Impact Me?
When you purchase a new scooter or bike, you will be issued a 3 year or 5-year insurance policy in accordance with the type of insurance you have chosen. This has many benefits.
Save On Premium: The total premium that you would pay for a long term policy would be less than the amount that you would end up paying for the same amount of time if you renewed your policy annually.
Less Stress: You do not have to worry about renewing your policy every year, or keeping track of expiry dates. This saves you the stress and time spent on policy renewal.
Benefit Of NCB: NCB stands for No Claim Bonus which is a discount given at the time of renewing your policy if no claim has been raised during the policy tenure. In a long term policy, you would still be able to get some amount of NCB discount even if you make a claim.
Policy Refund: In most cases, if you choose to terminate the policy before the expiry date, you will get a refund for the remaining policy tenure.
Depending on the type of insurance policy you select, it will be compulsory to purchase a long term insurance policy alongside your new bike or scooter. It has many benefits for you and will save you money in the long run.
You May Also Like To Read: How to Renew Two Wheeler Insurance Policy Online After Expiry
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.