Every year, owners of motorcycles and scooters have to purchase insurance for their vehicles. Currently individuals could purchase a policy only for a period of one year. However, the Insurance Regulatory and Development Authority has opted to provide owners with a insurance policies for a period of three years.
In India an individual has to purchase a minimum of third party insurance for their vehicle. Now IRDA will provide owners the option of choosing a three year insurance policy of the compulsory third party liability cover.
G Srinivasan, chairman, New India Assurance told source, "We are definitely interested in filing a long-term product. In the two-wheeler segment, there are a large number of owners who forget to renew their policy after the first year and a long-term cover will help reduce the number of uninsured vehicles on the road."
The same is being expected to be introduced for four wheelers in India. This new three year insurance policy is expected to lower premium costs. This new move will help both insurance companies as well as those opting for the policies.
This new three year insurance scheme is expected to lower the number of two wheelers in India that run without insurance. The IRDA has informed that the premium would be thrice of what is the annual premium. However, during the three year period the policy cannot be altered or changed.
Currently the insurance companies are not accounting for losses among its third party claims by two wheelers. The insurance companies will instead benefit from providing long term insurance policies. Most owners of vehicles avoid going through the hassles of getting policies every year and the three year policy would benefit many.
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