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THE
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Blog
2 mins Read | 1 Year Ago

The Benefits of a Long-Term Car Insurance Policy

The Benefits of a Long-Term Car Insurance Policy

Driving uninsured vehicles can be a huge risk. Firstly, you are at risk of bearing exorbitant expenses in case you meet with an accident. Secondly, and this can’t be stressed enough, driving a car that has no insurance is considered illegal in every state in India according to the recent Motor Vehicle Act of 2019. So, it only makes sense to invest in a good long-term Car Insurance Policy. Below are the benefits of doing so.

A brief history on the recent change in laws

Earlier, the laws in India dictated that every Car Insurance from the date of policy renewal is valid for a period of one year. However, a Supreme Court ruling in 2018 readjusted the law and declared that new Car Insurance Policies must cover third party liabilities for a duration of three years. In other words, the Supreme Court mandated the issuance of a 3-year Insurance Policy to cars and a 5-year Insurance Policy to two-wheelers. Third-party liability coverage is valid for three years, while standard Car Insurance coverage can be renewed every year. This is also sometimes referred to as a multi-year Car Insurance Policy or a long-term Motor Insurance Policy.

As a result of this change in law, it became quite frustrating for individuals to carry two different types of Motor Insurances which have different expiry durations. To resolve this issue, the citizens of India began looking towards companies like ICICI Bank that dispense good long-term Motor Insurance Policies such as the ICICI Lombard General Insurance.

Benefits of a long-term Car Insurance Policy

Discounts: Insurance providers recognise how pricey long-term Car Insurance Policies can be. Thus, to bring down the price a little, they offer exciting discounts and offers to their customers by using the saved up money that arises from the reduced administrative costs and policy issuing costs that comes with this type of insurance. Further, if you have an anti-theft device installed in your vehicle or are a special needs driver or a member of a reputed automobile corporation, you may get additional discounts on your premium.

Convenience: As mentioned earlier, it can be quite hard to keep up with the numerous insurance renewals you have to make with their different corresponding expiry dates. Long-term Car Insurance Policies ensure that your life is as easy as the renewal date, for it needs renewal only every three years.

No Claim Bonus (NCB): An NCB refers to a discount on your insurance premium that you can avail at any time. With a long-term Car Insurance Policy, not only can you gain a higher NCB compared to a standard Car Insurance Policy, you can also transfer your NCB easily to a new car in case you wish to purchase another one.

Saves Time and Effort: Certain short-term Insurance Policies require the insurance holder to submit an inspected review of your car upon its annual renewal. Long-term Motor Insurance Policies save you the time and effort of having to conduct this procedure.

Change in Policy: Some Insurance Policies change over time and result in the individuals having to bear an increased premium upon their annual renewal. Renewing your insurance after three years will buy you some time before having to pay the increased premium. This protection from price hikes will help you save 20% to 40% of the money you would otherwise have to spend on your annual third party renewal.

Reducing Non-Renewal Risks: In case you’re faced with an unfortunate situation where you have to repair or replace a part of your car when you have already surpassed your insurance grace period, you would have to bear the expenses out of your own pocket. With a three-year Car Insurance, however, there are lesser chances of you running into the risks of having to bear expenses by yourself, as you have a longer duration within which you can make the repairs or replacements.

Conclusion

A long term Car Insurance Policy is guaranteed to be worth every rupee you spend. Although it is a little more expensive than the conventional one-year Car Insurance Policy, with all the benefits that accompanies it, it is definitely worth looking into.

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