Long- Term V/S One Year Two Wheeler Insurance Policy Compared

Two-wheeler insurance plans come with both short and long tenures. However, long-term two-wheeler insurance plans often get overshadowed by the popularity of short-term plans.

In this article, we will talk about both short-term and long-term plans and the set of benefits offered by them.

First Off, What Are Short-Term And Long-Term Two-Wheeler Insurance Plans?

A short-term bike insurance plan is the one which has a validity tenure of 1 year, whereas, a long-term plan can have a validity of 2, 3 or even 5 years.

One Year v/s Long-Term Two Wheeler Insurance Plans

Let’s read about these differences in detail.

Also Read: Fine for Driving Two Wheeler Without Insurance

1. Chance of Policy Lapse

It is generally noticed that to bike insurance renewal an annual policy there are three times more chances of going into policy lapse mode as compared to a 2 year or 3 year policy. This confirms the chances of facing troubles to instate a lapsed policy will also increase three times for a policy. If a policy is lapsed following steps are taken by the two wheeler insurance company:

• Thorough scrutiny of the bike
• Determining the IDV of the bike to come up with the amount of premium
• Preparing paperwork for reinstated policy cover
• Dispatch of new/reinstated policy document

The premium may be high or the IDV value may be kept low, for a lapsed policy. This puts the policyholder at a disadvantage.

2. Premium Amount

As per the Insurance Regulatory and Development Authority (IRDA) regulation the premium amount for a policy keeps increasing every year. On the other hand, for a long-term insurance policy the amount of premium to be paid by the policyholder remains stable and fixed for as many as three years continuously. In addition to this, the insurance company offers an additional discount to its customers for opting for a long-term insurance plan.

Also Read: Bike Insurance Details by Registration Number

3. No Claim Bonus

No claim Bonus in a long-term insurance policy is higher in comparison with an annual policy. If the policyholder does not make any claim in a single-year insurance policy then in the first year they are entitled to a 20%. No claim Bonus which keeps increasing if we don't make any claim and in the fifth year it reaches 50%.

On the other hand in a multi-year bike insurance policy if the policyholder makes no claim they are entitled to 40% No claim Bonus, if the claim is filed once, twice and thrice the policyholder is entitled to 30%, 20% and 0% No claim Bonus respectively.

4. Flexibility

In terms of flexibility, a short-term two-wheeler insurance plan triumphs over a long-term plan. With an annual plan, you have the option to change your insurance company at the time of renewal right after one year, however, a long-term plan might tie you to an insurance company for a longer time.

Also Read

How To Increase Concentration While Riding Your Motorcycle?

Benefits of Buying Long-Term Two Wheeler Insurance

Conclusion:

From the above-mentioned points, we are able to figure out that purchasing a long-term two-wheeler insurance policy can be beneficial in many aspects although if someone wants to buy an annual bike insurance policy, that is also a good option.

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.