Convenience
Even though you renew your policy term dutifully every year, you can get the convenience for 2-3 years, depending on your insurance provider, in one go. You just have to pay your premium and enjoy your coverage without having to keep a track of policy renewals. A long-term policy, thus, is very useful in case you have multiple policies.
Enjoy Uninterrupted Coverage
When you miss renewal, there is a gap in coverage during which your vehicle is completely uninsured. In case of an accident or theft, you will have to bear the brunt of the expenses due to damage or loss of the vehicle. In such a case, a package long-term two wheeler insurance plan shines through by providing continuous coverage.
What’s more, you also are freed from the hassle of renewing a lapsed policy, tedious paperwork and vehicle inspection, in case a substantial time has passed after the renewal due date.
Fixed Premium Rates
Often, when you renew your policy after one year, you would find a slight increase in the premium due to yearly hike in third party premium as dictated by the regulatory authority. A long-term policy insulates you from such hikes which are 10-15% on an average. The premium is fixed at the time of taking the policy and stays the same for the entire policy period.
Discount on Own Damage
A long-term policy benefits the insurance company due to decreased administration and issuance expenses, thereby reducing the overall cost of their operations. These savings can be passed on to the customers through discounts on the Own Damage premium.
This discount however, is not offered by all insurance companies and depends on several factors such as policy type, manufacturer, model, etc.
Added No Claim Bonus (NCB) Advantage
NCB is a discount that you can avail if you do not make a claim for an entire policy period. As per the pre-determined slabs, upon renewal you will get 20% discount on your Own Damage premium. This discount increases every year at the rate of 5% you do not make a claim, up to a maximum of 50%.
However, under a long-term policy, this discount rate differs slightly. For example, ICICI Lombard’s 3-year two wheeler policy offers 40% NCB at the end of three years. It decreases to 30% and 20% if you make one and two claims under your policy term respectively.
Some insurance experts may refute that a long-term insurance policy fails in case there is a decrease in the premium amount. Although, the possibility of such an occurrence is high, a long term two wheeler insurance plan proves to be beneficial in the long run in several other aspects as mentioned above.