Single-Year or Multi-Year Two-wheeler Insurance: The Better One Quick guide to Select between Single-Year and Multi-Year Two-Wheeler Insurance
Keeping your two-wheeler insurance in force is a very important aspect of vehicle ownership. The insurance companies in India are allowed to offer two types of
vehicle insurance, which are, single-year insurance and multi-year insurance. The single-year insurance lasts only one year while a multi-year insurance plan is for 2 or 3 years. Each of the two has its unique advantages and you should study both before deciding on which one to buy.
Advantages of a multi-year policy
Convenience: The key factor for considering a long-term insurance policy for your two-wheeler is the convenience it offers. Having to renew your vehicle insurance annually is quite a hassle, as you need to keep a track of policy expiry and renewals, look for policy deals, and manage the money for insurance every year . If you have multiple vehicles then it becomes even more burdensome. On the other hand, a multi-year two-wheeler insurance policy is a one-time buy and you are set for the entire duration.
Lapsed policy risk protection: Imagine a situation where, for some reason, you forgot to renew your insurance and the traffic police stops you and asks you for papers. In such a situation, you would be fined or, in worst case scenario, your driving licence would be cancelled. In case of an accident, when you are not covered, you would lose tens of thousands rupees in damage control. A multi-year policy keeps you safe from any kind of policy lapse risk.
Locks in pricing at current rates: Over the years, the inflation rate has gone higher and prices of things tend to go significantly up year on year. Buying a one-year policy means that every year, you will have to pay the new prices at the time of your Bike Insurance. Then there is a chance that tax rates will also go up. That will push up the overall price of your policy as well. On the other hand, if you buy a multi-year policy, you get the policy for the entire duration at today's prices and tax rates.
Instant no claims bonus: When you buy a multi-year policy, you are immediately given a no-claims bonus for the entire duration of your new policy. This brings the cost of policy significantly down. For example, if you take a 3 years policy when you already have a 20 per cent no claim bonus, will instantly max out your NCB to 50%, which is the highest allowable NCB that an insurance company is permitted to offer.
Cheaper to load add-ons in the policy: When the insurance companies offer a multi-year two-wheeler insurance policy, they are also able to offer a very large discount on various add-ons, such as engine and transmission protection, zero depreciation cover, and roadside assistance.
Advantages of single-year policy
Low upfront cost: A single-year insurance policy is always cheaper to buy upfront because you are paying for only one year, unlike multi-year policy where you pay for 2 or 3 years.
Ability to regulate your Insured Declared Value: If you buy a multi-year policy, the insurance company will lock you in their standard
IDV calculations. This means you can only set your IDV once, that is, in the beginning of your policy duration. With single-year policy, you can set your IDV every year, which allows you to maximize the value of your vehicle by paying a bit extra.
Easy to move to a different insurer every year: With multi-year policy, you become tied to an insurer for the entire duration of the policy. On the other hand, with a single-year policy, if you do not like the services of your insurer or find their network inadequate, you can move to a different insurer the next year.
To sum things up, both the single-year and multi-year insurance have their advantages and features. When it comes to making the decision about which kind of policy to buy, you should always consider your current financial condition and which factors you rate higher.