Long term two-wheeler policy: Buy once and forget for 3 years

Parag GuptaBharti AXA General InsuranceIndians have a very old and fond relationship with two-wheelers given that in FY 2015-16 we saw a sale of over 16.4 million vehicles including scooter, motorcycle and mopeds. Yet numbers suggest that 75% of vehicle owners do not have two-wheeler insurance! Most people forget to renew their policies and then avoid the traffic police.But is it worth the amount you will end up paying if something goes wrong with your vehicle?In an online poll conducted by Bharti AXA General Insurance, two-wheeler owners suggested that the reasons for not renewing the policy was mainly the hassle of yearly renewal and sometimes forgetting the renewal. Over 80% respondents said that they would prefer buying 3 years long term two-wheeler insurance.Till some time back, two-wheeler insurance policies were single year policies; however, this segment has seen an innovation with the advent of long term policies. In this article, we will discuss more about the long term two-wheeler policies and their benefits.  Why a long term policy makes a lot of sense?Basis a circular in August 2014, IRDAI, the regulatory body for insurers in India, allowed insurers to issue long term policies. The aim of the regulator was to limit the instances wherein people forget to renew their two-wheeler policies every year and thereby reduce the number of uninsured vehicles on the road. If you are a two-wheeler owner, this should come as a welcome change because:•    A long term policy is more convenient than having to find time in your busy schedule to renew your policy, and risk the lapse of the policy. Moreover, transacting online is easier as everything is on e-mail and can be accessed anytime and you don’t have to depend on hard copies•    In case your policy has lapsed, some insurers may insist on checking the condition of your two-wheeler before renewing the policy, which may come at an additional cost and hassle of providing your two-wheeler for pre inspection. To avoid this, get a 3-year long term policy and you will not have to go through the hassle of annual renewals•    You can avoid risks that arise from being uninsured in case you forget to renew your policy, for example, in case of an accident or if your two-wheeler is stolen. In case of a total loss claim within the policy duration, you stand a chance of refund of proportionate premium•    You can avoid an increase in premium during the policy period. No premium increase takes place during the policy period even due to losses or revision in insurance price•    You are eligible for a higher No Claim Bonus (NCB) in case of long term policies and even if you do make a claim, the NCB slab does not reduce to nilWhat are the features of long term two-wheeler policy? With long term two-wheeler policy, you get to enjoy every one of the benefits listed above. Still not convinced? Here are some features the policy usually entails: •    The policy provides for the following additional covers on payment of a little extra premium:It provides personal accident cover (compensation in the event of injuries, disability or death caused solely by violent, accidental, external and visible events) for the insured and any named or unnamed passenger(s) up to Rs.2 lakhs per person which covers accidental death and total/partial disability. The policy allows you to choose a voluntary deductible ranging from INR 500 - 3,000 that can substantially reduce your premium outgo in addition to the discount availed in case of opting long term policy. What does a long term two-wheeler policy cover?A long term two-wheeler policy does not only ensure third party motor insurance cover but also a comprehensive cover to protect any damages to the vehicle. While this policy provides a host of coverage, customers should bear in mind aspects which are typically not included in a long term two wheeler policy. Usually a long term two-wheeler policy covers the below possible situations:Injury or death or third party, and damage caused to their propertyLoss or damage caused:Fire, explosion, self-ignition or lightningBurglary, house breaking or theftRiot and StrikeEarthquake (fire and shock damage)Accidental external meansMalicious actTerrorist activityWhile in transit on road, rail, inland-waterway,lift, elevator or airLandslide and RockslideThe few situations that usually don’t get included in the policy structure are:o    Common wear and tear of the vehicleo    Electrical and mechanical breakdowno    Damage incurred outside the geographical area of Indiao    Driving while intoxicatedo    Damaged caused by use by an unauthorized person without a valid driving license o    Vehicle being used otherwise than in accordance with restrictions as to useBuying third party motor insurance, as per the Motor Vehicle (MV) Act is a legal requirement in our country. When you opt for a long term two wheeler policy, you not only comply with law but also enjoy peace of mind.