Is Two Wheeler Insurance Mandatory For 5 years?

3 min read

As soon as you buy a two wheeler, you need to get it insured. This is a compulsory rule in India. While this rule is widely known, there is another rule that not many riders know of. That is, when you get a new two wheeler, you also need a 5 year third party insurance for bike. The Supreme Court of India has made this mandatory since 2018.

5 year insurance policy for Two Wheelers:

The IRDAI issued a guideline in August 2020 where the rule of buying insurance for five years was slightly modified. Here are the new rules:

1. 5 year Third Party (TP) is mandatory for New Two Wheelers but not Own Damage (OD)

For a new bike insurance rules are a little different. When you buy a new bike, you compulsorily have to buy the third party liability cover for a period of five years. However, the own damage component can be bought for just one year. There are bundled plans available that combine the 5-year third party liability cover with a one-year own damage cover.

2. From next year, you can buy standalone OD plan to cover your own vehicle

Once you complete the mandatory one-year OD cover, you can then opt to cover the own damage component or not. It is not compulsory any longer and you can make the decision based on what your needs are.

Also Read: Reasons a Two-Wheeler Insurance Claim gets Rejected

Understanding the rule of new two wheeler insurance 5 years

The rule if buying bike insurance for five compulsory years only pertains to the third party liability component. If you buy a third party liability bike insurance plan, only then will you have to buy it for a term of five years. If you opt for a comprehensive bike insurance plan, a regular plan would suffice. This is an important component that needs to be remembered here. 5 year third party insurance mandatory for 2 wheeler, so go and get it at the earliest.

Reasons behind the rule of 5 year insurance for bike

  1. To ensure more insurance coverage – By selling a compulsory 2 wheeler insurance online plan for five consecutive years, the IRDA is ensuring maximum insurance coverage for a longer period of time.
  2. To avoid policy lapses – When the two wheeler insurance online plan is bought, the vehicle remains insured for 5 years and so there is no worry about policy lapses and breaks in the insurance covers. This is a reason why you buy 5 years insurance for two wheeler.
  3. To check the problem of non-insurance – Many people skip renewing their two wheeler insurance plan online to save money. With the new bike insurance validity of 5 years, this problem is checked to a great extent.
  4. Beneficial for you – When you buy the bike insurance plan for a longer duration of time, it proves to be economical as the premium gets locked in and doesn’t increase each year. Then, the NCB also stays protected due to non-existent policy lapses. And finally, you don’t have to worry about forgotten due dates that lead to uncalled for policy lapses and unintentional breaks in the bike insurance coverage.

Also Read: What is a Two Wheeler Insurance Background Check?

Bike insurance 5 years mandatory – A conclusion

Keeping the points mentioned above in mind, you can surely consider getting two wheeler insurance for five years. So go ahead and buy this policy and make a very wise move. Go online, compare and find the best plan. Buy it and stay secure, keep your vehicle covered and stay protected from the third party liabilities as well.

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Gayatri Prabhu, Head-Digital Business at Mahindra Insurance Brokers Limited (MIBL) is one those few digital leaders who has the width and depth that is required to execute an ROI driven holistic digital strategy. She cuts through the noise, identifies the critical levers and leads her team to successful execution of the defined strategy. Her core mantra to win new and retain existing customers is: understand the consumer behavior and craft experiences around it.

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