Long term insurance is essential for a car. It has both advantages and disadvantages. IRDA has introduced long term motor insurance. It has the facility of insurance for both car and bike. Driving a car on the roads without insurance can also result in heavy fines.
Basic third party insurance is mandatory for every vehicle in the country. Failure to have this insurance can result in a fine of up to Rs 5,000 or a jail term of up to 3 years or both. Most of the car drivers do not renew their insurance cover after the completion of the first year.
This is the reason that today there are many such vehicles in India, which are running without insurance. But do you know about the advantages and disadvantages of insurance? If not, then let us know..
insurance Benefits
If you have bought a car and opt for long term insurance for it, then you can get a substantial discount. This often happens when people forget to take it. Due to this they have to face many problems.
Not only taking long term insurance, but also renewing it should be done. This does not cause any kind of problem. Insurance can cover the car for up to 3 years. That is, you will not have to worry about getting insurance for three years.
Loss of insurance
The disadvantage of insurance is that you have to pay in one go. Suppose you have to pay Rs 6000 for one year car term insurance, that means for three years you will have to deposit only Rs 16000. The second disadvantage is that you do not get claim bonus in long term insurance.
This means when you get insurance for one year, if you do not use it at that time, then you have to pay less money than the last time to renew it, because the bonus amount that you get for not claiming, is from the premium account.
Goes minus. But when insurance is done for 3 years together and insurance claim is taken in the last year, then even after claiming the first two years, no claim bonus is available.
Can insurance be changed midway?
Suppose you have taken insurance for one year and you are not liking the policy or terms of the company, then you can choose insurance for the second year. Secondly, if you get insurance for three years together, then you have to wait for the limit of insurance to be over. That is, you cannot change the insurance of two or three years.
