INSURANCE FOR TWO-WHEELER

Tarun Mathur

WHETHER you live in a city or countryside, a two-wheeler is something that you invest in at some point in life. It is an economic vehicle which you can ride easily through populated roads, but there a few things like a mandatory insurance that you must keep in mind to ensure a stress-free journey on the roads. The Motor Vehicles Act of India has made it compulsory for a rider to get a valid insurance cover on every two-wheeler, which is driven on Indian roads. So, make sure you get the right cover for your two-wheeler before you start riding on the roads.

However, the statistics say a different story and according to the latest figures, out of all the motorbikes on the roads, only 30% are covered by motor insurance. A prime reason behind this is the insurance sold to the buyers for a new vehicle, which is usually valid for one year and if not renewed by the owner gets automatically lapsed. In the wake of this scenario, IRDAI allowed insurers to launch a long-term two-wheeler insurance policy which lasts for 2 to 3 years depending on the plan you choose. Now, this leads to another important question – when it comes to two-wheelers, should one buy a long-term policy or just a one-year policy is better? If you are going through a similar dilemma, here are some scenarios to help you clear the clutter.

Scenario 1: You have a new two-wheeler

If you have purchased a bike recently, then it is quite possible that the dealer has sold you a one-year policy for your vehicle. The chances are high on such policy sales because not many channels/dealers have moved towards long-term policies. Probably a part of it is since the person purchasing the bike looks at on-road price and the dealer has to keep it low at all times.

Buying long-term vehicle insurance has many benefits. It will not only save up to 27% on your own-damage premium but will also free you from the hassle of renewing your policy every year. Hence, you should make a mature decision by exploring more options available in the market before you buy insurance.

Scenario 2: You have an old two-wheeler

There is no denying that Indians often keep a motorcycle for a long period, sometimes for more than 15 years also.  Renewing your insurance policy is very economical as the IDV gets very low and so does the premium, and going for a one-year insurance policy is the only choice you will be left with. The reason behind this is that most of the insurers do not sell long-term insurance policy once the age of bike is more than 10 years. Insurer’s like New India Assurance only provide long-term insurance with zero-depreciation add-on until the vehicle age of three years and with-out zero-depreciation add-on the age is limited to six years. Hence, you have an old bike opting for a standard one-year policy is the only option you are left with.

Scenario 3: You are planning to sell your bike

Plans to sell an old bike would usually mean that you need insurance only for a couple of months because once you sell it, the insurance will either be ported to the new owner or the new owner will have to buy a new insurance policy as per his/her needs. In this case buying a single year policy suits best for you and it also saves the extra money you would spend on buying a long-term policy.

Insurance is something that can be of great help when purchased thoughtfully. Hence, it is very important for you to analyse your needs before buying it. After all, it should fit your needs, not just for short-term but for a longer period too.

The writer is co-founder and Director, Policybazaar.com. The views expressed in this article are his own