Gone are the days when car insurance had to be renewed annually. The insurer had to be contacted, and the annual premium had to be paid. Isn't this a blessing in disguise? This has become possible due to the multi-year long-term car insurance policy. Comprehensive car insurance is the need of the hour, and according to the High court ruling, all car insurance policies must cover third-party liability for three years. The traditional model concerning car insurance was tedious to operate and had many tasks to be carried out yearly for renewal.
What is a multi-year long-term insurance policy?
Earlier, many people would just forget to renew their car insurance policies. This would lead to heavy fines by the traffic police and also unnecessary expenditures for the car owners. With the introduction of multi-year long-term insurance policies, three years of third-party policies are included, and one year of damage cover is also included.
Buying these policies can save a lot of effort required every year. Tracking the policy for details and renewal dates is optional if you buy a long-term insurance policy.
Edges you get by buying a multi-year policy are:
1. The cost of insurance is also inclusive of taxes. A goods and service tax is paid yearly over and above the insurance policy amount. For a multi-year insurance policy, you need not worry and track the increment in taxes. Since the taxes are paid in advance, the multi-year policy is beneficial.
2. In an insurance policy, own damage cover is added because inflation always has an increasing trend. Since the multi-year policy, payment is already made for many years. Inflation has near zero impact.
3. For an annual policy, payment has to be made every year irrespective of whether the provision for money is present. For this, compulsory saving is to be made, affecting the opportunity cost of investing money elsewhere. In the case of a multi-year policy, you get more periods for saving money as the premium has to be paid after more years.
4. The insurance providers may offer additional discounts while buying a multi-year policy. These can be beneficial for the claimant.
5. The multi-year car insurance aids to compensate in the case of death or injury.
6. The no-claim bonus accumulated can be availed at one go in the case of multi-year insurance. The insured party need not wait every year to avail of this benefit.
7. Add-on covers are also available on multi-year policies.
8. The multi-year insurance also covers and compensates for any loss or damage to accessories and parts.
We can save some effort and cost yearly if we resort to multi-year long-term policies. The benefits are long-term and significant. The policies are for multiple years. Hence the stress of updating and tracking your policy regularly is reduced. The process is hassle-free, and various policies can be selected.
Disclaimer: The content provided is for education and informational purpose only, none of the information contained in our blog amounts to any form of opinion or advice. Please go through policy related documents carefully or consult an expert before making any insurance-related decisions.