Little known benefits of buying multi-year car/bike insurance

Insurance is a legal requirement for every motor vehicle that plies on Indian roads. In the past, the norm was to get one’s vehicle reinsured (insurance renewal) every year in order to stay compliant with the law, protect other road users, and to also protect one’s own vehicle from theft/damage. Now though, things are slightly different, and if we may add, a lot more convenient.

Enter multi-year car/bike insurance.

While the norm was to buy bike insurance or car insurance every year until a few years ago, one can now buy multi-year car/bike insurance, thereby saving money, the hassle, and eliminating the risk involved in forgetting to renew insurance.

Let’s quickly take a look at why renewing car/bike insurance every year is not a good idea, specifically when multi-year car/bike insurance is around.

Little known benefits of buying multi-year car/bike insurance

Firstly, remembering to renew car/bike insurance every year is a task in itself. Then, there’s the cost involved, which usually keeps rising each year as the Insurance Regulatory and Development Authority of India (IRDAI) keeps increasing third party premiums. Suppose one forgets to renew insurance, the vehicle has to be physically produced at the insurance office for a re-inspection – and this adds time and effort to the renewal process. And finally, if one totally forgets to renew insurance, there’s the risk of having to pay hefty fines to law enforcement, not to mention the sheer risks of getting into an accident, or facing a vehicle theft. Clearly, renewing car/bike insurance every year is the more difficult one of the two options. *

This brings us to the solution we touched upon earlier: multi-year car/bike insurance. Just as its name suggests, multi-year insurance refers to a motor insurance policy that covers a vehicle for multiple years. For instance, multi-year car insurance insures a four wheeler for up to 5 years while a multi-year bike insurance policy provides cover for 3 years. What’s more: Both policies can be bought in a single shot, and have to be renewed only after they expire: in 5 years and 3 years respectively.

Now, let’s go deeper into multi-year car/bike insurance policies and understand the key benefits they bring to the table.

Benefit #1: Cost

A multi-year car/bike insurance policy is cheaper than a single year policy. Buying car insurance for 5 years at one shot is cheaper than buying it every year. In percentage terms, buying a car insurance policy for 5 years would be about 15 % cheaper (this percentage will change based on underwriter guidelines) than buying it each year over 5 years.

Assuming you spend about Rs. 40,000 in insuring your car for five years through a multi-year insurance policy, you’d have to spend about Rs. 46,000 if you choose to buy the same policy on a yearly basis. *

Benefit # 2 Price hike protection

Nearly every year, the IRDAI convenes, and directs a hike in third party insurance price due to various reasons such as number of claims in the previous year, inflation, risk parameters and so on. This results in insurance premiums increasing by about 10-20 % each year. Buying a multi-year insurance policy ensures that you won’t have to face these yearly insurance price hikes. *

Benefit # 3: Claims protection

This is one of the little-known benefits of opting for a multi-year car/bike insurance policy. Insurers calculate premiums for a multi-year car/bike insurance policy after factoring in the NCB (no claim bonus) for the years during which the policy will remain active. Therefore, even if you make a claim during the tenure of the multi-year car/bike insurance policy, it has no bearing on the price of your current insurance policy. On the other hand, making a claim during the tenure of a single year policy will result in the NCB lapsing, and the cost of renewing insurance for the next would be much more expensive. *

Benefit 4: Easier to finance

Multi-year car/bike insurance policies are typically opted for by new car/motorcycle owners. What this also means is that the car/bike loan will cover the multi-year insurance policy component as well. In other words, your multi-year car/bike insurance premium will become a part of your vehicle’s EMI. Clearly, it’s much easier to finance a multi-year policy than a single year policy. *

Benefit 5: Hassle free, and safe!

Lakhs of people forget to renew car/bike insurance policies each year. Once the policy is out of date, renewing it will require a visit to the insurance office for a vehicle inspection. This is a process that consumes some time and effort, both of which can be avoided in multi-year car/bike insurance policies. Then, there’s the legal aspect. Driving/riding without insurance is illegal, and law enforcement can levy heavy fines when they find out that the vehicle is uninsured. Moreover, a crash/theft when the insurance policy has expired is a big risk that can cost a lot more than a multi-year insurance policy. *

* Standard T&C Apply

Bottomline: A multi-year car/bike insurance policy is not only hassle-free but also is the safer bet!

So, what are you waiting for? If you want to renew your bike or car insurance policy and opt for a multi-year policy, visit Bajaj Allianz General Insurance today.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.