IRDA has launched motor insurance of long term insurance. Good discounts are available on long term insurance. However, you get locked into long term insurance. It has many advantages and disadvantages too, let’s know.
Basic third party insurance is mandatory for every vehicle plying on Indian roads, without which you can be fined up to Rs 5000 and imprisoned for up to 3 years or both. According to a survey it has been found that most of the people are not renewing their insurance cover after the completion of the first year.
Because of this, vehicles without insurance are plying on the roads. Hence IRDA has introduced long term motor insurance where cars can be insured for up to 3 years and two wheelers can be insured for up to 5 years on payment of premium.
If you also want to get long term insurance for your vehicle, then it is very important to know its advantages and disadvantages before that. Let’s know about long term insurance.
Advantages
If you opt for long term insurance for your car, then the insurance company can give you a good discount. Many times people forget to renew insurance even after being reminded. After taking long term insurance, you will not have to worry about renewal. This insurance can cover your car for 3 years i.e. for 3 years you will not have to worry about getting insurance.
This is a matter of benefits, but long term insurance has some disadvantages as well.
Damage
Its biggest disadvantage is that you have to deposit a huge amount together. For example, if you have to pay 6000 rupees for one year car term insurance, then you may have to deposit only 16000 for 3 years, but it may be difficult to pay this amount in one go as compared to 6000.
Its second disadvantage is non-availability of no claim bonus. When you do insurance for one year and during that time you have not used the insurance, then you have to pay less money for renewal next year than the previous one because you get bonus amount for not claiming, which is equal to the amount of premium.
From goes minus. But when you get 3 years of insurance together and you take an insurance claim in the last year also, then you do not get any NCB i.e. no claim bonus, despite not claiming the first two years.
Bandhan is long term insurance for 3 years
If you take insurance for one year and you do not like the policy or terms of the insurance company, then you can choose another insurer next year, but if you get 3 years insurance together, you have to wait for the insurance duration to end. You cannot change your insurance after one or two years.
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