Do you find renewing your motor insurance every year a cumbersome task? This can be especially burdensome if your business requires a fleet of vehicles. Well, we have some good news for you. Regulators are now considering allowing long-term motor insurance for cars as well as for scooters and bikes.
RELATED ARTICLE: FLEET MANAGEMENT SOFTWARE: CAN IT REDUCE RISKS AND INCREASE RETURNS?
What Is Long-Term Motor Insurance?
Since insurance coverage is mandatory in India, all new vehicles have it. However, vehicle owners must renew their policies annually, and many fail to renew. As a matter of fact, more than two-thirds of vehicle owners fail to renew their motor insurance policies. This is true for both two-wheeled vehicles and four-wheeled ones. A key reason for this failure is the absence of a grace period for paying renewal premiums.
Long-Term Motor Insurance for Scooters and Bikes
The Indian Regulatory and Development Authority introduced long-term insurance for two-wheeled vehicles in 2014. This covers scooters and bikes for up to three years.
At the moment, owners of four-wheeled vehicles do not have this option. However, long-term policies for scooters and bikes have been a resounding success. Therefore, regulators are now considering long-term motor insurance for cars as well.
Benefits of Long-Term Motor Insurance
Since you will soon have the option to choose long-term motor insurance for your cars, what should you choose? Here we review some of the benefits of long-term motor insurance.
Keeping track of the annual renewal dates of your motor insurance policies can be bothersome. This is especially true when you own a fleet of vehicles for your business. However, if you renew your policies only once every three years, you save time and worry. You’ll have less concern about remembering to renew. Moreover, there will be fewer chances that you’ll be late with your annual premium.
What’s more, you can easily opt for long-term motor insurance online from the comfort of your office or home. To cite an example, an insurer like IFFCO Tokio offers complete online renewal options. Further, you can also access claim settlement assistance online, around the clock every day of the year.
Some insurance companies offer a discount on long-term policies. That’s because long-term policies require lower administrative costs.
However, in many cases, the premium rates for annual policies and long-term policies remain the same. If this is the case for you, don’t hesitate to ask for more competitive premiums. When you’re purchasing a long-term motor insurance policy, you’ll stand a better chance of getting a more affordable quote.
The Same Premium for Three Years
Insurance regulators decide the premium rates on an annual basis. Therefore, rates fluctuate every year. Insurance companies, in turn, fine-tune premium rates. They base their decisions on various factors. These variables can include what the policy covers and whether the insured has filed any recent claims.
However, if you choose a three-year insurance policy, you’ll be assured of having the same premium rate throughout the entire three-year period.
Fewer Risks of Non-Renewal
When an uninsured vehicle meets with an accident or gets damaged or stolen, the owner has to bear the loss. This can be a huge financial drain. In fact, in almost every case, the amount for damages is greater than the insurance premium amount would have been.
However, you can minimize your risks by covering your vehicles with three-year policies.
Fewer Hassles with Policy Lapses
With an annual policy, you must take your vehicle for inspection and renewal every year. Moreover, if your policy were to lapse for even a single day, the insurer would scrutinize your vehicle even more thoroughly. Avoid this stress by choosing a long-term policy.
Better No-Claims Bonus
The no-claims bonus that accrues at the end of a long-term motor insurance policy is better than the bonus on a regular annual policy.
As you can see, long-term motor insurance coverage holds definite advantages for vehicle owners. Therefore, it is a very good thing that regulatory authorities are considering announcing a long-term insurance policy for four-wheeled vehicles as well as for two-wheeled ones.
What’s more, discussions about a five-year policy plan are also underway. In short, long-term motor insurance seems to be making a lot of headway. And many vehicle owners believe this is a very good thing.