All you need to know about IRDAIs new 5-year term mandate on two-wheeler third party insurance

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Two-wheeler third party insurance

Two wheeler third party insurance

In India, around 20 million two-wheelers were being sold in the financial year of 2017/18. Thus, India has now officially overtaken China and become the country with the most motorbikes running on the streets. Therefore, it is but obvious that people should take all the necessary precautions to avert risks. Although, one can never foresee an accident, however, we all can surely prevent ourselves from it; because accidents don’t just cause financial but also bodily damages. The best way to lower the repercussions of accidents is for every owner to opt for third party insurance.

The third-party cover takes care of all the financial as well as legal problems caused by you, to a third-party. The Government of India has made it mandatory for all the vehicle owners to have at least a third-party cover. Therefore, no vehicle owner can drive without meeting the basic criterion of third-party insurance. But yet, more than 3/4th of the total vehicles on the roads are not insured. Hence, the owners are driving without any protection against the foreign threats. Policy lapse is the biggest contributing factor among all of them. Your insurance policy lapses, when you forget to renew it.

Therefore, IRDAI (insurance regulatory and development authority of India) has taken several measures in order to ensure the safety of vehicle owners. The new insurance rules are the biggest measures amongst all of them. The new insurance rules are implemented since September 1st, 2018. They have had an impact on third-party insurance, for both cars as well as motorbikes. This has created a ripple effect and has caused an overall increase in the prices of motorbikes. Therefore, from now on, each new motorbike will cost more, than what they used to in the past.

This is because all the new motorbike owners will have to buy 5-year third-party insurance. Therefore, motorbike owners can either opt to buy a third-party cover for 5 years as a separate product or bundled together with a 1-year comprehensive cover. However, many people are still not aware of the rules; when they buy a new policy from a company or a dealer. People often end up purchasing a comprehensive cover in place of third party insurance. This problem could be attributed to the lack of awareness among the citizens.

However, the price of a long-term 5-year third-party cover for motorbikes is not the same, for all of them. The amount of money that you pay for your third-party cover depends on the motorbike, which you are buying. A third party cover for motorbike with an engine capacity of 75 cc-150 cc is around 3,285 rupees. However, the same insurance policy will cost you 1,045 rupees for a motorbike with an engine capacity below 75 ccs. But it will cost you 5,453 rupees for a motorbike with an engine of 150 cc- 350 cc. But if you are opting to go for a luxurious bike with an engine capacity of over 350 ccs, then the same cover will cost you 13, 034 rupees.

 

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