Benefits of Long Term Car Insurance Policy
03 June 2019
Long term car insurance's what it is and what are its benefits
Vehicle owners across the country have a mandate to follow. As per the Motor Vehicle Act of 1988, all vehicle owners are obligated to purchase a third party liability cover. This is simply a type of vehicle insurance that is meant to protect third party individuals in case of road accidents leading to injury, vehicle or property damage and death. Others prefer to purchase a comprehensive car insurance policy, which, although not mandated, offers more than just third party liability coverage. Vehicle insurance policies typically come with year-long validity. But most people find it a huge hassle to renew their insurance year on year. Such people can benefit from long term motor insurance.
What is a long term insurance policy?
As the name suggests, a long term insurance policy is one that comes with a longer period validity. As of September 2018, the Insurance Regulatory and Development Authority of India (IRDAI) and the Supreme Court of India, issued a mandate stating that all new vehicle owners have to purchase long term insurance policies. These insurance policies would come with long term validities of three to five years. However, people who's ve purchased vehicles before September 2018 can also benefit from this policy and opt for long term car insurance or bike insurance and so on. The new mandate was issued keeping in mind that as vehicles begin to age and depreciate in value, most owners choose to either skip renewals completely or purchase policies which don't exactly cover risks totally.
Benefits of purchasing long term vehicle insurance
It is very convenient: As we mentioned above, renewing insurance policies every 12 months is quite a hassle. Most of us have hectic schedules to follow which makes us forget about the exact dates for renewing insurance policies. It is therefore common for people to forget about renewing policies and in the bargain lose benefits that come from no claims made or discounts on premiums. If you are one of those people who can identify with this scenario it is better to opt for a long term motor insurance policy.
No need to worry about policy renewal and lapsing: Policy renewal can be a huge hassle if it is not renewed on time. When a policy lapses, you cannot renew it online, nor can you just purchase a new policy to continue being insured. In fact, need to go through the entire process of getting your insurance renewed which includes submitting your vehicle for inspection, filling out masses of paperwork, getting your vehicle's value evaluated by the insurer and so on. With long term insurance you needn't worry about your policy lapsing or renewing it.
You can avoid the risks that come with non-renewal: If you drive without a valid insurance policy even for a single day you could be taking a huge risk. Remember that driving without insurance is considered a punishable offence under the Indian Penal Code and you would not get any coverage, if something happens. Moreover, you would be inviting several legal liabilities and financial problems for driving without insurance. If your bike or car is in an accident, you would have to bear all the expenses for damages caused to your own vehicle as well as those caused to third party, his vehicle or his property, if you do not have valid insurance. To avoid driving your car without insurance for even a single day, it is best to reap long term car insurance benefits.
Huge discounts on premiums: Another benefit of purchasing long term vehicle insurance policies is that several insurance companies are offering huge discounts on OD or own damage premiums. This is because car insurance policies help insurers reduce their administrative and policy issuance costs significantly. These savings are therefore passed on to policy holders, who can benefit from the same.