Knowledge Centre

Long-term Third-Party Motor Insurance is a Good Deal

Published on July 26, 2019. EST READ TIME: 5 MIN

Two-wheelers are vehicles of convenience for everyone irrespective of the location or the gender of an individual. They are easy to drive and one of the most convenient means to negotiate the not-so-hospitable Indian terrain and also an economical mode of transport for a vast population of the country. However, while they bring in convenience for the owner, they come with its own set of risks. In the unfortunate event of an accident involving a two-wheeler or a motorcycle, the owner (the driver) may be exposed to different types of risks. The owner of the motorcycle will not only be required to pay for the hospitalization if he gets himself injured, he will also be required to compensate the loss to the pedestrian who is injured or whose property has been damaged.

As per the Motor Vehicles Act of1988, it is mandatory to take the Motor Insurance while purchasing any type of a vehicle – be it a car or a two-wheeler. As a standard sales procedure, the first insurance comes with the purchase of the vehicle. However, it has been observed that the bike owners typically get somewhat careless about renewing the insurance on their motorcycle after a couple of claim-free years. Some drivers consider their good driving skills as an excuse for not bothering with  Two Wheeler Insurance. However, the nature of accidents and mishaps is such that they happened unannounced, to anyone, anywhere.

Despite best credentials as a safe driver, having a Two-Wheeler Insurance is a must for every two-wheeler owner because of the severity of today's roads traffic. And it’s not always the driver of thebike , who is responsible for the accident. The heavy traffic can result in accidents with no fault of the driver. Even a seemingly minor damage to the vehicle or slight injury may involve a high cost to get it fixed. For obvious reasons, the number of vehicular accidents tends to go up during monsoons. With medical care getting expensive every year, even a small treatment can mean a big expense. A collision with another vehicle or severe injury to fellow passengers can be costly to the driver of the two-wheeler. Support in the form of a financial aid can bring down the burden of the problem. With Two-Wheeler Insurance, one can stay assured of financial help in the event of an accident.

A Two-Wheeler insurance is not very expensive, and offers a range of benefits. A basic Two-Wheeler Insurance covers for damage to the third party liability. And a  comprehensive Two-Wheeler Insurance  keeps the two-wheeler owner protected against damage caused by natural as well as man-made calamities, including the damage to the body or the property of the third-party. A Two-Wheeler Insurance protects the policyholder from any financial liabilities. Yet, the two-wheeler owners get somewhat complacent when it comes to renewing their bike Insurance, despite repeated reminders from the insurers. There have been instances of accidents having taken place to the vehicles shortly after the insurance was expired.

Two-wheeler owners can now breathe easy. Insurance regulator Insurance Development Regulatory Authority (IRDA) has allowed the insurers to sell Standalone Motor Third Party Insurance for two-wheelers for periods of up to three years. For two-wheeler owners, this means that they do not need to renew their insurance policies every year. Instead, now they can renew their third-party insurance policy once in three years. As an added advantage, the long-term  Motor Third Party Insurance  for two-wheelers also protects the two-wheeler owners from any hikes in third party liability premium for the next three years. As per the IRDA guidelines, the total premium charged for the third-party coverage would be thrice the annual third-party premiums and the insurers would not be allowed to revise these premiums (upwards or downwards) during the period of policy under any circumstances. Also, once issued, the insurer is not allowed to cancel the standalone third-party cover in any circumstances except in case of total loss of the insured vehicle.

Essentially, long-term Two-Wheeler Insurance is a win-win situation for the consumer as well as the insurers. Data suggests that almost 70-75% of two-wheelers are not insured despite the fact that it is mandatory. A lot of effort goes into the process of annual renewals, which has a substantial amount of cost attached to it in terms of calling the customer for reminder and courier charges for dispatching the policies etc. A number of policyholders do not have the mandatory Third Party Insurance because they miss the expiry of their insurance and continue without the insurance. With the long-term third-party Motor Insurance, the policyholders do not need to worry about the expiry of their Motor Insurance for three years. With inefficiencies related to annual renewals eliminated, the resulting cost-savings to insurers can be passed on to the customers in terms of discounts.

This blog has been written by

Mukesh Kumar | Motor Insurance Expert | 36+ years of experience in insurance industry

A veteran in the insurance industry, Mukesh Kumar has the expertise of handling various functions like Business Development, Underwriting, Claims, Human Resources, Quality Management and Marketing. With rich knowledge of the industry, he loves to share his views on topics of insurance sector and takes special interest in educating people on advantages of having insurance.

Mr. Mukesh Kumar recommends "getting your two wheeler insured from HDFC ERGO, a brand serving more than 1 crore+ customers. With overnight repair services and more than 6,800+ network garages, you can be assured of help in event of any damage to your vehicle

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