Starting from April 2015, yearly renewal of two wheeler insurance will not be required. As per the new rule of Insurance Regulatory Development Authority, insurance companies will soon launch 3-year motor insurance for two wheelers. Premium for this would be fixed. Government run New India Assurance has been given rights to launch this long term motor insurance policy. As of now, every year premium rates are revised every year for a one year policy.

Benefits:

• Upto 30% discount applicable when policy is purchased for 3 years
• No-claim bonus on premium
• Underwriting benefits
• Bike or Scooter owner can only get these benefits
• Insurance companies on the other hand can save money on administrative costs

Terms and Conditions:

• The whole premium amount has to be paid in one instalment
• Cancellation of third party cover is not allowed except in case of “total loss”
• In case of “total loss”, premium refund would be made for the unexpired years

During the entire policy term, insurance companies cannot make changes to the premium amount i.e. no increase/decrease. It is expected that private insurance players will also launch such products which will further increase the competition, creating various options for insurance buyers to choose from.

Last year in August-2014, IRDA released statement that general insurance companies
can launch 3 year fixed term motor insurance for 2 wheelers.

Every motor insurance has 2 parts:

• On-damage insurance: This covers any damage to your vehicle or theft.
• Third party insurance: This provides coverage for damage caused to someone else’s life or vehicle. Premium for third party insurance is reviewed every year and new rates are applicable from 01st April. For the financial year 2015-2016, third party insurance premium is expected to increase by 16%.