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If you possess a two-wheeler, you must be well aware that as per the Motor Vehicle Act 1988, third-party bike insurance is mandatory in India.
But here comes the caveat!
In India, about 75% of the total number of two-wheelers on the road DO NOT have any valid insurance cover. Shocking, right? Well, considering the fact that most riders overlook the significance of insuring their bike when rolling the vehicle out of the showroom, these figures are not that surprising.
However, to address the issue of non-renewal of policies, insurance providers across the country have introduced multi-year or long-term two-wheeler insurance policies. At first, these multi-year insurance policies were launched for a term of 3 years. Now, they can also be extended for up to 5 years.
Below is an elaboration on the benefits of purchasing two-wheeler third-party insurance for 3 years and why it is advisable for you to do so.
A long term two-wheeler insurance frees vehicle-owners from the necessity of renewing their insurance policy every year, as it insures your two-wheeler in unfortunate events for up to 3 or 5 years.
The Insurance Regulatory and Development Authority (IRDA) has extended this facility of multi-year insurance policies for standalone third-party liability plan and the ones combined with own damage plan for two-wheelers.
This means that you can avail two-wheeler third party insurance in a bundled bike insurance policy, including 5 years of third-party liability cover + 1 year of own damage cover (5 TP + 1 OD).
As for long term comprehensive bike insurance, these are available only for two-wheelers that have been purchased after 1st September 2019.
Here are types of long-term bike insurance policies available in India:
Long term two-wheeler third party insurance for bikes protects your newly bought vehicle against third-party liabilities for up to 5 years, including own damage cover for 1 year, implying that damage to your own bike is also covered for a year. This law was effective from 1st August 2020.
As the name suggests, the long-term comprehensive policy offers financial protection against damage to your two-wheeler and third-party liabilities for up to 3 years. However, it is available only for two-wheelers purchased after 1st September 2019.
On December 7, 2022, IRDAI proposed to introduce Long-term Own Damage cover such that its policy period is the same as the Third-party Liability cover. This allows policyholders to buy insurance for multiple years in one transaction.
Yes, in India, it is mandatory to have a 5-year third-party bike insurance policy if you have purchased a new two-wheeler. This bundled two-wheeler insurance plan includes a 5-year third-party liability plan and a 1-year own damage cover (5 TP + 1 OD). This plan was implemented by IRDAI starting August 1, 2020.
However, some insurance companies also offer two-wheeler third party insurance for 3 years. Also, if you have purchased a new two-wheeler and you want to opt for comprehensive bike insurance policy, then the long-term bike insurance policy will be of 3 years instead of 5 years.
A three-year bike insurance plan comes with several features that make it an attractive option for vehicle owners, such as:
Two-wheeler third party insurance for 3 years provides extended coverage, so, there is now no need for you to do two-wheeler insurance renewal for 3 years, thus, ensuring continuous protection.
It is generally more cost effective than renewing a bike insurance policy annually as it protects against yearly premium hikes and also because insurance companies often offer discounts on 3-year bike insurance prices.
With a long-term insurance plan, the premium also remains unchanged for the entire duration of the policy, ensuring financial stability.
Since you do not have to do two-wheeler insurance renewal for 3 years you save time and effort, making it a hassle-free choice.
The 2-wheeler insurance for 3 years policy is like any standard motor insurance policy with extended policy term. In long term bike insurance policy, your vehicle is covered by comprehensive coverage for 3 years. However, if you get a third-party liability plan, your vehicle will be covered for 5 years with own-damage coverage for 1 year.
This type of extended coverage plan for your two-wheeler eliminates the need for annual renewals and offers advantages in cost savings.
The two-wheeler insurance for 3 years offers several benefits over the regular ones, such as:
The period between the lapse of your bike insurance policy and its renewal can expose you to several risks. For example, a hefty fine due to traffic violation as well as financial liabilities from any accident during the period can lead to huge losses.
By having a two-wheeler third party insurance for 3 years, you can reduce these risks to quite an extent, at least for 3 years of the policy term.
In most cases, two-wheeler owners forget about renewing their insurance policies after their 1-year policies have expired. With the 3-year plans, you can actually forget about two-wheeler insurance renewal for 3 years without repercussions.
That is why these plans are much more convenient because they curb the necessity of renewing your third-party insurance policy annually.
With a three-year bike insurance policy, you will have to make the premium payment for 3 years at once. But in lieu of this lumpsum expense, you will be saving quite a lot on your premium payments, in the long run.
This is because insurance providers revise and impose a hike on the premium rates for their insurance policies annually. Due to inflation, this hike in premium rates can go up to 10-15%.
If you have a 3-year policy in place, you can save yourself from paying higher premiums until the time the policy expires. This way, your policy becomes a lot cheaper in the long run.
The Insured Declared Value or IDV of bike is the total sum assured promised by an insurer against total loss of a vehicle.
IDV is given by = the manufacturer’s registered price – the vehicle’s depreciation. The value is revised when you renew your insurance policy by taking your two-wheeler’s depreciation into account.
Now, when you avail a 3-year insurance policy, your IDV remains unchanged for the term of those three years, allowing you to avail a higher sum assured against total loss of your vehicle.
No Claim Bonus or NCB in bike insurance is the discount you can avail on the premium paid for your insurance policy if you have not made any claims in the previous year.
With three-year two-wheeler insurance policies, you can enjoy an advantage on your No Claim Bonus over single-year policies.
For example, if you have a 20% NCB from your previous policy when you avail a 3-year policy, this 20% NCB will be applicable on the premium you pay for all 3 years.
Further, few insurance providers also offer a higher NCB at the end of their long-term policies as compared to single year policies to boost the policyholders’ incentives in this regard.
In an effort to urge more two-wheeler owners to consider long-term insurance policies, insurance companies offer attractive discounts on the same. These discounts can make availing the insurance cover quite advantageous for vehicle owners.
Sometimes a gap between your insurance renewals can warrant an inspection of your two-wheeler from insurance providers before they agree to do your bike insurance renewal for 3 years. This is known as a break-in policy and can subsequently lead to higher premium payment.
When you avail a 3-year long term insurance policy, you can avoid break-ins with your policy and subsequently carry on without any extra addition to your premium.
With such benefits and more, these multi-year two-wheeler insurance policies are a much better option when it comes to safeguarding yourself from unforeseen financial risks involving your two-wheeler.
Damages and losses that may arise due to an accident or collision
Covers for your losses in case your two-wheeler is unfortunately stolen!
Damages and losses to your two-wheeler in case of an accidental fire!
Damages caused to your two-wheeler due to nature’s many furies, such as due to floods, cyclones, etc.
Covers for your expenses in cases where you’ve hurt yourself too bad!
When a person, a vehicle or a property is hurt or damaged due to your bike's actions.
It is equally important to know what’s not covered in your two-wheeler insurance policy, so that there are no surprises when you make a claim. Here are some such situations:
In the case of a Third-Party or Liability Only Bike Policy, damages to own vehicle won’t be covered.
Your bike insurance won’t cover for you in situations where you were riding drunk or without a valid two-wheeler licence.
If you hold a learner’s licence and were riding your two-wheeler without a valid licence-holder on the pillion seat- then your claim in those situations won’t be covered.
Any damage which is not a direct result of the accident (e.g. after an accident, if the damaged two-wheeler is being used incorrectly and the engine gets damaged, it is considered as consequential damage and it will not be covered)
Any contributory negligence(e.g. damage due to driving a two-wheeler in a flood, which is not recommended as per the manufacturer’s driving manual, will not be covered)
Some situations are covered in add-ons. If you haven’t bought those add-ons, the corresponding situations will not be covered.
Two wheeler insurance add-ons which you can buy with your Two Wheeler insurance policy
Think of it like an effective anti-ageing cream for your bike and its parts. Usually, the required depreciation amount is always taken in account during claims. However, a zero-depreciation cover ensures no depreciation is taken into consideration, so you get the full value of the cost of repair/replacement during claims.
If you fall into a situation where your bike is stolen or damages beyond repair, this add-on comes in handy. With return to invoice add-on, we will cover the costs of getting you the same, or similar bike- including the road tax and registration fees for the same
Do you know that the cost of replacing your engine is approximately 40% of its cost? In a standard two-wheeler insurance policy, only damages caused during the accident are covered. However, with the engine and gear-box protection add-on cover, you can specifically cover the life of your vehicle (the engine and gearbox!) for any consequential damages caused post the accident. This could happen due to water regression, leakage of lubricating oil, and undercarriage damages.
The add-on of consumable cover adds an additional shield to your two-wheeler. Covers the cost for all your bike’s nitty-gritties such as the engine oils, screws, nuts and bolts, grease, etc. in the event of an accident.
The roadside assistance add-on ensures we’ll always be there for you and your two-wheeler in case of any breakdowns. The best part? Asking for our help doesn’t even count as a claim.
The tyre protect add-on cover is offered only to vehicles fitted with run flat technology. As part of it, the cost of replacing damaged tyres with equivalent or near equivalent to the one being used in the vehicle, labour and wheel balancing charges can be reimbursed. However, claims made under the add-on cover is subject to conditions set forth under the vehicle insurance policy.
The add-on cover of daily conveyance benefit will ensure that you are compensated for your transportation cost during the period when two-wheeler is under repair subject to applicable time excess. A policyholder can be compensated in the form of fixed allowance per day or coupons from taxi operators from an amount equal to per day fixed allowance.
This EV Shield add-on cover for electric two wheeler in India will protect you and your vehicle against any loss or damage to the electrical panel for the vehicle charging point, vehicle charger including charging cable, and offer roadside assistance services specific to EVs.
The 3-year bike insurance price is calculated as three times the annual third-party premium payment. You will have to make this payment in a single instalment. You should remember the following:
This premium payment system is especially beneficial for policyholders because it saves them from the annual premium rate hikes imposed by insurance providers.
On the flip side, it is also advantageous for insurance providers as it allows them to collect the premium for 3 years at one go, allowing them to save on administrative charges.
Here is the 3-year bike insurance price in India:
Here is the 5-year third-party bike insurance price in India if you choose the single premium plan. You can also calculate the same using two-wheeler insurance premium calculator online.
Here is the third-party premium price for new electric bikes with a 5-year single premium policy.
Since most of the leading insurance providers in India have welcomed this move of IRDAI with regards to the implementation of long-term insurance covers, you can avail several options of the same to choose from.
So quit stalling! Get your two-wheeler insured under a long term bike insurance policy today!
The Insured Declared Value or IDV of the two-wheeler is adjusted for depreciation value of your bike as per the below table.
In the table, age-wise depreciation is applicable for only Total Loss/Constructive Total Loss (TL/CTL) claims.
For 3 years bike insurance policy, NCB will only be calculated for the Own Damage (OD) component of the bike insurance policy, as it is renewed annually. So, the NCB calculations will be same as that of the annual standard bike insurance policy.
Here’s how NCB is calculated for a 5+1 years bike insurance policy.
The following things affect the 3-year bike insurance price:
Bikes with higher cc generally have higher premiums.
The IDV is the current market value of the bike, and it directly affects the 3-year bike insurance price at the time of claim as a higher IDV will lead to higher premiums.
Newer and more expensive bike models generally have higher premiums as their bike parts are more expensive.
The city or area in which you ride your bike also determines the 3-year bike insurance price. Areas with higher traffic or theft rates attract higher premiums.
Opting for add-ons with a long-term comprehensive bike insurance policy will also increase the insurance premium as add-ons are available at an additional amount, over and above the premium amount.
If you have not filed for any claims in the previous bike insurance policy period, then you will be rewarded with a discount on your bike insurance renewal premium price through the No Claim Bonus (NCB).
If you’re confused which is the most suitable for you - long-term bike insurance policy or standard insurance plan, then this table is for you:
To buy Digit bike insurance online for 3 years, furnish only the following documents to buy the policy within minutes:
Before purchasing a 3-year two-wheeler insurance policy, consider the following factors:
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