According to various surveys conducted by research agencies, more than 60% of two-wheelers on the roads are uninsured in India. Consequently, when mishaps occur, uninsured vehicle owners are often unable to compensate for the damages caused. In view of this unfortunate situation, in the country, the Insurance Regulatory and Development Authority (IRDA), announced that all new two-wheelers will need to have a mandatory five-year third-party insurance from September 1, 2018, onwards. This decision of the IRDA was implemented in line with the recent decision taken by the Supreme Court in this regard.
The IRDA is the regulatory body that oversees all insurance activities in India. On the other hand, a third party insurance policy covers the damages caused by the vehicle owner to a third party (a person or property) in case of an accident. Third-party insurance is mandatory in India under the New Motor Vehicle Act of 2019. Moreover, as per the IRDA rules, the two-wheeler insurance cover for 5 years must be included in the cost of sale. Hence, if you are planning to buy a bike anytime soon, getting it insured will cost you almost double of what it used to previously. Here’s how the bike insurance plans will be affected by the 5 Year third-party insurance rule by IRDA: –
Although buying bike insurance online for the long term may cost you more initially, as a vehicle owner, it reduces the hassle of yearly policy renewals. Once you have made the payment, you can enjoy uninterrupted insurance protection for another 5 years. Moreover, when you consider the cost of bike insurance over the last 5 years, you will notice that the cost of insurance has nearly doubled. Hence, when you opt for long term two-wheeler insurance, you will also end up saving costs against inflation.
However, if you want complete protection against risks, buying a comprehensive insurance policy along with third-party liability cover is highly recommended. At Finserv MARKETS, read the difference between third party and comprehensive insurance with their respective coverages and premium amounts.
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