Is Two Wheeler Insurance Mandatory For 5 Years?
Published On Jan 22, 2021, Updated On Oct 19, 2022
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.
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Despite the fact that two-wheelers cause the majority of traffic accidents in India, many people rely on them as their primary mode of transportation. Therefore, in order to preserve safety and limit the frequency of accidents, IRDAI is constantly coming up with new rules and regulations. . Therefore, as per the latest implementation, it is mandatory for all two-wheelers to get a two-wheeler insurance policy for up to 5 years. There are two types of motor insurance policies provided by the top general insurance companies. Let’s learn more about it in detail!
Types Of Two-Wheeler Insurance Policies
Listed below are the two types of bike insurance coverage available in India from which you can choose as per your preferences.
- Third-party Insurance:
It is a basic bike insurance policy that every bike owner must have. This type of insurance is mandatory as per the Motor Vehicles Act, 1988. It covers the policyholder financially against any loss or damage caused to a third party person or property. However, the insured is not entitled to get coverage for any damage that happens to him or his motor vehicle. Riding without this type of insurance is illegal in India.
- Comprehensive Insurance:
It is a complete package of protection given to the policyholder. Unlike third-party insurance, a comprehensive policy provides full protection for both the insured and a third party. Some of the damages covered under these include accidents, theft, fire, natural calamity, third-party damage, and more. Therefore, it brings peace of mind along with financial protection in any circumstance for the policyholder.
How Does a 5 year Two Wheeler Insurance Policy Work?
In the year 2018, the Supreme Court directed making a 5-year insurance policy mandatory for new bike owners. Therefore, following the orders of higher authorities, IRDAI made it compulsory for vehicle owners to get insured for a period of 5 years with a reliable motor insurance policy. The reason behind this is to ensure that the maximum number of two-wheelers are insured and to reduce the number of accidents happening with lapsed policies or uninsured vehicles. However, the minimum 5-year tenure is mandatory only for third-party insurance plans. In case you’re purchasing comprehensive two-wheeler insurance, you can choose the policy duration according to your preference ranging from 1-3 years.
Benefits of a 5-year Insurance Policy
A 5-year bike insurance policy is a safeguarding tool that helps you live a stress-free life. Though many people see new insurance rules as a burden, in reality, they are a savior and provide numerous benefits. Some of them are mentioned below.
- No Fines & Penalties:
In India, it is against the law to drive a motor vehicle without any valid insurance policy. If you are found to be riding without insurance, you may have to pay a huge penalty for violating the traffic rules. Therefore, with long-term protection, you can ride without any worries about getting caught by the traffic police and paying challans.
By purchasing a 5-year long-term policy, you don’t have to worry about updating your insurance policy when it expires every year. Therefore, you don’t have to stress about remembering the date and renewing your insurance policy on time.
Unlike short-term insurance plans, the premium amount for long-term policies is much more affordable. Thus, long-term policies are inexpensive and certainly help you save money by paying less.
IRDAI keeps on revising rules and regulations for insurance policies, keeping the interests of the people in mind. Therefore, purchasing a two-wheeler insurance policy for five years would not only help you financially but also provide you with peace of mind and save you from the hassles of missing out on renewals. There are a lot of motor insurance companies that offer both third-party and comprehensive bike insurance plans. You can compare bike insurance online and choose a plan that best fits your budget and requirements.