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Posted by Royal Sundaram on 12 Oct 2018
After the Supreme Court of India mandated long term motor insurance, the Insurance Regulatory and Development Authority of India (IRDAI) has directed insurers to offer longer covers than a yearly policy. So, from September this year, buyers of new two- and four-wheelers must purchase long term cover for motor insurance for at least 3 and 5 years, respectively.
This new development is aimed at reducing the number of uninsured vehicles plying on the roads, as well as increasing the extent of insurance cover for vehicle owners.
There are multiple reasons why you should get a long term third party cover, such as:
- Convenience: Many car and bike owners forget to renew their motor insurance policy on time, which leads to extra charges and even policy lapses. With a long term policy, you don’t need to worry about renewals or premium payments every year. It will also serve to minimize the number of uninsured drivers on road.
- Longer Protection: The main aim of any insurance is to offer protection to the insured. With a long term third party cover, the term period of protection is not limited to a brief period, it would be for a period of at least 3 years, thereby, ensuring peace of mind for the buyer.
- Price stability: With a long-term policy, you will be protected from yearly price hikes in third-party premium. Consequently, the sum assured also remains unchanged for all 3/5 years.
- No claim-bonus: An NCB is like a reward that is provided by the insurance company to the insured in case they do not make claims during the last year. A higher NCB may be offered by insurance providers to customers who opt for a long term motor insurance in comparison to those who opt for short-term motor insurance policies.
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