Two-wheelers now eligible for 3-year insurance cover

The Insurance Regulatory and Development Authority (IRDA) has devised a three-year version of third-party insurance policy for two-wheelers. This step will allow owners to insure their vehicles for a period of three years at once instead of having to go through the process every year.

The two-wheeler segment consists of a large number of owners who forget to renew their policy after the first year and the introduction of the long-term cover is expected to help reduce the number of uninsured vehicles on the road.

The IRDA has issued a letter to all general insurance companies stating that the total premium for third-party insurance would be thrice the annual premium and the amount cannot be changed during the tenure of the policy. The three-year policy is expected to help companies in reducing costs in issuing policies, administering them and in follow-ups for renewals. This could also lead to lower premiums as insurers could share the cost savings.

A similar insurance policy model for cars is likely to be introduced in the future.

Source: Times of India