Is two wheeler insurance mandatory for 5 years


03 Aug 2023

Read about Why is two-wheeler insurance mandatory for 5years

Two-wheelers are thought to be far more likely to be involved in traffic accidents than other types of vehicles. Hence, in order to ensure the ongoing safety of your bike or scooter from accidents and other hazards, it is essential to acquire comprehensive two-wheeler insurance coverage.

Moreover, every owner of a two-wheeler in India has to buy at least third-party insurance, if not the comprehensive one that covers both him and his bike, to be in compliance with the law.

Why is two-wheeler insurance mandatory for 5yrs?

When you purchase a new bike, you are required to get two-wheeler insurance for a period of 5 years ("5-year third-party insurance with 1-year Own Damage insurance" or 5-year third-party insurance). This regulation is in accordance with instructions from the insurance regulator that became effective on August 1st, 2020.

Despite the fact that bike insurance is required, the insurance regulator (IRDAI) noticed that many bike owners did not insure their motorcycles. So, it is required to choose a 5 + 1-year bike insurance policy for new motorcycles in order to make the practice more strict and keep the bike covered for a longer duration. You risk paying significant fines and losing your license if you are caught operating a bike on the road without third-party insurance, making the two-wheeler insurance mandatory for 5yrs worth it.

Types of bike insurance policies

• Third-party insurance

Third-party insurance, which does not cover the own damages, is the most popular type of two-wheeler insurance. Nonetheless, a third-party injury sustained in an accident will be covered up to a specific amount by insurance.

• Comprehensive insurance

Comprehensive insurance covers the policyholder's two-wheeler against theft, damage, or loss, as well as third-party liability, personal accident coverage, and self-inflicted damage. Damages to the owner or rider are covered by personal accidental coverage up to a predetermined amount. Although it is not required by law, comprehensive insurance is advised since it covers all potential damages and minimizes the toll on personal savings.

How does two-wheeler insurance for a five-year period work?

A short-term policy's coverage and that of a five-year bike insurance policy are comparable. For five years, you are covered under a third-party liability plan, and for one year, you are covered by a comprehensive bike insurance plan. The cost of the insurance and the duration of the bike insurance plan are the main variables in this case. Hence, as opposed to a short-term approach, a long-term approach is more advantageous.

How does 5-year insurance for two-wheelers help?

Long-term bike insurance coverage has the advantages listed below:

• Low premium -
Long-term insurance policies have lower yearly premiums than short-term insurance policies do. Thus, long-term insurance is less expensive.

• Continuous protection -
You might be held liable financially if the bike is damaged while the insurance is not in effect. If you don't have ongoing coverage, your insurance provider can't assist you. You will be fully insured for five years against third-party liabilities. Plus, a year against damage to your own bike.

• No insurance challans -
India penalizes anyone who uses a motorcycle without insurance. If you have long-term coverage, you are able to drive the bike without incurring any insurance-related penalties in your name.

• NCB -
The own-damage policy is where this is most important. When you don't file claims, your own-damage coverage will be heavily discounted. If you don't file a claim for five straight policy years, you'll receive a 50% discount.

A long-term policy provides dependable bike insurance protection in addition to peace of mind. In addition to paying less for the exact same coverage as short-term insurance, long-term bike plans are also available.

Related Blogs
Best Insurance for your Electric Bike
E bike licence and insurance
Why Motor Insurance is Must

Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.