New 5-year Motor Insurance Advantages & Loses You Need To Know

According to reports, around 53 road accidents occur in India every hour, and the country loses nearly 1.5 lakh lives every year due to that. The rapid increase in the number of vehicles, over-speeding and poor condition of Indian roads remained some major reasons behind this. Keeping these factors in mind, a motor insurance policy seems mandatory to help yourself during emergency situations. 

In 2020, the Insurance Regulatory and Development Authority of India (IRDAI) asked all the insurance providers to withdraw long-term third party motor insurance packages. Earlier, this particular package included both own damage insurance and third party cover for 3 years on new cars and 5 years on new two-wheelers. 

The decision to issue the long-term vehicle insurance package was taken by the Supreme Court of India in 2018. Some of the vehicle dealers were misusing it by forcing this insurance plan on buyers in order to increase the price. With IRDAI’s new norms, individuals can only opt for long-term third party motor insurance policies and make use of their benefits. 

Advantages of long-term third party motor insurance 

The revised rules of IRDAI made insurers offer compensation and help out individuals during emergency situations instead of looking at it from the commercial point of view. Following are the benefits policyholders can expect from new 5-year motor insurance plans:

  • Avoid the renewal process

Generally, insurance policies require policyholders to renew them every year in order to utilise the benefits. Since the long term cover lets you get rid of that renewal process, it seems beneficial for individuals who want to pay the premium in one-go and save money. 

  • Completing the legal compulsion 

Even though IRDAI discarded the 5-year package for two-wheelers and 3-year long term motor insurance comprehensive package for four-wheelers, the rule regarding third-party liability remained the same. In order to keep up with these regulations, insurance aggregators have introduced affordable plans under such motor insurance policies to provide monetary coverage to policyholders in case of mishaps. 

  • Easy application process 

With the advent of cutting-edge technology and transparent procedures, applying for insurance policies has become simpler. The prompt response from the insurance aggregators while going forward with an online motor insurance policy is another key reason to rely on these services. Additionally, you can expect an easy application process and other add-on benefits on a long-term motor insurance policy

  • Discounts 

In case of long-term four-wheeler insurance policies, insurers offer lucrative discounts to convince new car buyers to opt for add-on covers. Also, with the reduction in policy issuing costs and administrative costs, insurance providers automatically save some amount, which they pass on to individuals in the form of discounts. 

  • Offers a substantial coverage amount 

Since the treatment cost of road accidents generally involve spending a bulk amount, owning a third-party motor insurance policy is necessary to cover the damage caused by the insured vehicle to another party. You can get a sizeable amount to support the other person to bear unanticipated expenses by providing the necessary documents related to your chosen policy.

The considerable sum also goes a long way in preventing legal hassle for policyholders. Regardless of the extent of damage, the sum insured in such plans is sufficient to cover most expenses incurred by the other party. 

While a comprehensive motor insurance cover also includes own damage coverage, a third party vehicle insurance plan offers coverage only against third party liabilities. 

It has been witnessed that most road accident victims do not get financial or medical assistance mainly because they are unaware of the importance of a vehicle insurance cover. Even though under the Motor Vehicle Act, 1988, having a third-party motor insurance policy is mandatory, new vehicle buyers may fail to acquire one after a car or bike purchase. The aforementioned aspects are presented to help them to understand the usefulness of such policies. 

Leave a Reply

Your email address will not be published. Required fields are marked *