Long-term 2-wheeler motor policies a hit with customers

Irdai has allowed insurers to bring out long-term two-wheeler policy (both liability alone & package) for a maximum of three years

Long-term motor insurance policies for two-wheelers have seen an increase in takers among motorcycle/scooter owners. The product, launched last year, is being preferred as it is available for three years at a lesser cost.

After the regulator gave its nod, New India Assurance in April 2015 launched the first long-term comprehensive two-wheeler policy.

The Insurance Regulatory and Development Authority of India (Irdai) has allowed insurers to bring out long-term two-wheeler policy (both liability alone and package) for a maximum of three years. This was followed by long-term two-wheeler policies being launched by private sector general insurers as well.

G Srinivasan, chairman and managing director of New India, explained this product was becoming popular and had seen an increase in policy sales in this segment. While he said they were also involved in the process of convincing dealers to sell this product instead of the one-year policy, in the days to come, it would gain more traction, Srinivasan added.

All motor vehicles running on Indian roads are required to mandatorily have third-party insurance covers to protect against liability to third parties due to accident and damages. However, own damage insurance covers are optional.

Two-wheelers have been among the highest percentage of uninsured vehicles running on roads. This is because while customers do purchase a policy while buying the vehicle, they often do not renew it since these policies had yearly renewals.

Now, with the option of a tenure of two-three years, the aim was to have more insured vehicles on the road.

Insurers also said that discounts being given to policyholders have led to more number of people opting for longer tenure policies for two-wheelers.

Further, some policies like that of New India are also providing additional discount for own damage policies if three-year third party policy is purchased.