Is Bike Insurance Mandatory For 5 Years?

Having a bike insurance policy is mandatory according to the Indian Motor Vehicle Act. The government has specified certain guidelines with respect to the tenure of the bike insurance policy. Read this article to understand various options given by insurance companies with respect to the term of the bike insurance policy. 

Types of Insurance Policies

There are two basic types of bike insurance policies that are currently available in the Indian market. Third-party bike insurance and comprehensive bike insurance are the standard insurance policies. These policies have different applications, facilities, and conditions. 

• Third-party Insurance Policy

This type of standard bike insurance generally offers protection to the policyholder by providing the settlement amount to compensate for any loss incurred by the third party in case of an accident. In this case, no amount will be provided to the policyholder to repair the damages caused to his/her bike. Usually, the term of third-party insurance varies from one year, three-year or five-year duration. However, the government has made it mandatory to have a 5-year tenure if you purchase a third-party insurance policy. 

• Comprehensive Insurance Policy

This policy provides the policyholder financial assistance in case of any damage caused to the car due to factors other than collision along with third-party compensation. You can claim your car insurance if there has been any damage to your car or if your car has been stolen. You can also claim insurance for compensating third-party’s losses in case of an accident. But you cannot claim insurance for the damage caused to your car that is a result of the collision. It is mandatory to purchase this insurance for a minimum term of 3 years as per the government’s rules and regulations. 

Benefits of Having Long Term Insurance Plan

The IRDAI (Insurance Regulatory and Developmental Authority of India) is responsible to monitor the insurance sector and make rules for the same. It changes the rules and adds new ones from time to time in order to stay updated with the changing needs of society. The increasing number of two-wheelers on the road has increased the number of accidents that take place on a daily basis. Most citizens lacked valid insurance policies to protect them from such taxing accidents. Therefore, the IRDAI has extended the minimum tenure of the policies to keep the citizens financially safe. The following are the benefits of having long-term bike insurance- 

• Save Your Premium 

The total premium amount that you will be paying for a long-term policy will be relatively lesser than the premium amount that you will be paying for a short-term policy. This is mainly because the IRDAI increases the premium cost on a yearly basis. Investing in a long-term insurance plan will eliminate the increment in the premium at the time of renewal. 

• Less Stress

Having a short-term policy will always keep you on your toes to remember its deadline. Purchasing a long-term bike insurance policy will eliminate the need for you to renew it annually. You can renew your bike insurance policy once every 3 years or once in 5 years. Thus, it saves your time and stress. 

• The Benefit of No Claim Bonus 

The no-claim bonus is a discount that the policyholder is given on the insurance premium by the company for not claiming the insurance for the mentioned policy tenure. In a long-term insurance policy, you will still be eligible for receiving no claim bonus even if you make a claim. However, different insurance companies have different terms and conditions that they specify in the bike insurance policy regarding the NCB component. 

Take Away

Having a bike insurance policy is mandatory according to the Indian Motor Vehicle Act. Not having a valid insurance policy is punishable. The rider who is found without valid bike insurance can be subject to heavy fines. Thus, make sure to invest in a bike insurance policy and ride safe. 

Also read 

Top Insurance Companies to Buy Bike Insurance In 2021

Guide To Buy Bike Insurance For Old Bikes

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.