If you are one among the roughly 70 million two-wheeler owners in India, who do not renew their insurance policies after the first year, then New India Assurance’s long-term two-wheeler insurance is for you. Under this policy, which was launched last week, you can buy a comprehensive two-wheeler policy for a period of two or three years at one go. You can also get a discount on the premia for the entire period.
New India is the only general insurance company to launch a long-term two-wheeler insurance after the Insurance Regulatory Authority of India (Irdai) permitted it. Other companies are likely to come out with similar products soon.
New India is offering a discount of 30 per cent in premium for a three-year policy and 20 per cent for a two-year policy. The discount is available on both the third party (TP) and own damage (OD) components of the policy. The customer has to pay the entire premium upfront and he gets discount on the premium. Even if claims are made during the tenure of the policy, the premium does not increase.
If you currently have an annual policy and you have not made any claims under it, at the time of renewal if you buy the long-term policy, you will get a 20 per cent No Claim Bonus (NCB) discount on the premium for a three-year policy and 15 per cent for a two-year policy. This is in addition to the discounts already offered.
Similarly, at the time of renewing your long-term policy, if there are no claims during the three-year period, you will get 30 per cent NCB discount on the premium, as an addition, if you buy another long-term policy.
“There should be no claim in the preceding year of the policy to get the discount. So, if you have a claim in the second year, but no claim in the third year, you can get NCB discount to that extent,” says Mohd. Zafir Alam, general manager, New India Assurance.
Another advantage is that by paying premia for three years together, customers can also protect themselves from the yearly increases in TP premium. For 2015-16, the increase in TP premium in two-wheelers was between 14 and 16 per cent, depending on the kind of vehicle.
Yashish Dahiya, chief executive officer and co-founder Policybazaar.com, says that the long-term two-wheeler insurance reduces the hassles of renewing the insurance ever year. And since premium for two-wheelers is not very high, typically around Rs 1,000, customers will not feel the pinch if they pay the premium for three years at a stretch.
“Customers will be ready to buy two-wheeler insurance and agents will also be encouraged to sell it. Since commissions on two-wheeler insurance are low, often agents do not follow up with customers to renew the policies,” Dahiya says.
While two-wheeler owners in big cities do renew their policies, often it does not happen in smaller towns where traffic rules are not enforced strictly, says Alam.
New India might also offer long-term policies for cars, if Irdai approves it and based on the response to the two-wheeler insurance. But Dahiya feels in case of cars customers might find it difficult to pay the entire premium upfront as premia are higher.
“The premium for a Rs 10 lakh car is around Rs 20,000. Not many customers will be able to pay the entire premium for two of three years at one go,” he asks.
Curated From : Get discount in premium with long term two wheeler insurance