Is Two Wheeler Insurance Mandatory For 5 years?
Are you planning to buy a two-wheeler? Do you know that you must compulsorily buy a 5-year two-wheeler insurance policy with your new two-wheeler as directed by IRDA, India? Yes, a 5-year bike insurance policy is a mandatory requirement that includes a 5-year third-party cover + 1-year own damage cover. Know more about this mandatory coverage in this blog.
5 years insurance policy for Two Wheelers rules:
The IRDAI issued a guideline in August 2020 where the rule of buying insurance for five years was slightly modified. Here are the new rules:
1. 5 year Third Party (TP) is mandatory for New Two Wheelers but not Own Damage (OD)
For a new bike insurance rules are a little different. When you buy a new bike, you compulsorily have to buy the third party liability cover for a period of five years. However, the own damage component can be bought for just one year. There are bundled plans available that combine the 5-year third party liability cover with a one-year own damage cover.
2. From next year, you can buy standalone OD plan to cover your own vehicle
Once you complete the mandatory one-year OD cover, you can then opt to cover the own damage component or not. It is not compulsory any longer and you can make the decision based on what your needs are.
Also Read: Reasons a Two-Wheeler Insurance Claim gets Rejected
Understanding the rule of new two wheeler insurance 5 years
The rule if buying bike insurance for five compulsory years only pertains to the third party liability component. If you buy a third party liability bike insurance plan, only then will you have to buy it for a term of five years. If you opt for a comprehensive bike insurance plan, a regular plan would suffice. This is an important component that needs to be remembered here. 5 year third party insurance mandatory for 2 wheeler, so go and get it at the earliest.
Reasons behind the rule of 5 year insurance for bike
- To ensure more insurance coverage – By selling a compulsory 2 wheeler insurance online plan for five consecutive years, the IRDA is ensuring maximum insurance coverage for a longer period of time.
- To avoid policy lapses – When the two wheeler insurance online plan is bought, the vehicle remains insured for 5 years and so there is no worry about policy lapses and breaks in the insurance covers. This is a reason why you buy 5 years insurance for two wheeler.
- To check the problem of non-insurance – Many people skip renewing their two wheeler insurance plan online to save money. With the new bike insurance validity of 5 years, this problem is checked to a great extent.
- Beneficial for you – When you buy the bike insurance plan for a longer duration of time, it proves to be economical as the premium gets locked in and doesn’t increase each year. Then, the NCB also stays protected due to non-existent policy lapses. And finally, you don’t have to worry about forgotten due dates that lead to uncalled for policy lapses and unintentional breaks in the bike insurance coverage.
Also Read: What is a Two Wheeler Insurance Background Check?
Author Bio
Paybima Team
Paybima is an Indian insurance aggregator on a mission to make insurance simple for people. Paybima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 21 years of experience. Paybima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.
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