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.

What Does this Mean?

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 Third-Party Policy

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.

Long-Term Comprehensive Policy

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.

Long-Term Own Damage Policy

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:

Longer Validity

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.

Cost-Effective

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. 

Stable Premiums

With a long-term insurance plan, the premium also remains unchanged for the entire duration of the policy, ensuring financial stability. 

Convenience

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:

1. Avoiding Non-Renewal Implications

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. 

2. Convenience

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. 

3. Less Expensive in the Long Run

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. 

4. Avail High IDV

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.

5. High No Claim Bonus

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. 

6. Lucrative Discounts

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.  

7. Break-In Policy for Insurance Renewal

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. 

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 amount cannot be negotiated or revised during the entire 3-year policy duration.
• If you have standalone long term two-wheeler insurance, it cannot be cancelled during the policy-term (except in case of the total loss of vehicle). In the case of the total loss of vehicle, the premium paid for unexpired years will be refunded.

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.

The following things affect the 3-year bike insurance price:

Engine Capacity or CC

Bikes with higher cc generally have higher premiums.

Insured Declared Value (IDV)

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.

Bike's Age and Model

Newer and more expensive bike models generally have higher premiums as their bike parts are more expensive.

Location

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.

Add-ons

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. 

No Claim Bonus

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). 

• Step 1: On the Digit app or website, enter bike’s registration number, select the policy status and click on ‘View Prices’.
• Step 2: Select the 3-years two-wheeler insurance plan, add-ons and click on ‘Continue.’
• Step 3: Enter your personal, nominee and vehicle details and click on ‘Pay Now.’
• Step 4: Complete the payment and mandatory KYC verification process.
• Step 5: You’re done! You’ll receive the policy document via email, SMS and WhatsApp. Also, you can access it 24X7 on the Digit App.

To buy Digit bike insurance online for 3 years, furnish only the following documents to buy the policy within minutes:

• Bike Registration Certificate 
• Previous year two-wheeler insurance policy, if applicable
• Any of these documents for KYC verification - PAN/Aadhar/DL/Voter id/Form 16/Passport 

Before purchasing a 3-year two-wheeler insurance policy, consider the following factors:

• Coverage Type: Decide whether you need third-party liability coverage or a comprehensive policy as per your needs.
• Determine Your Budget: Customise your vehicle’s IDV as per your budget and opt for add-ons accordingly as well.
• Compare Premium Costs: Compare bike insurance premium quotes from different insurers online to get the best deal.
• Policy Terms: Read the long-term bike insurance policy document carefully beforehand to avoid any discrepancy and confusion at the time of claim.