What is multi-year and long term car insurance?
A basic third-party insurance cover is mandatory for all vehicles plying on Indian roads as per the Indian Motor Vehicles Act 1988. However, a basic liability insurance cover only protects against claims of damages and losses suffered by the other party in case of an accident. It provides no financial assistance to you.
That’s why it is always recommended to go for a long term comprehensive insurance plan. This not only provides coverage for third-party claims but also safeguards your car against damage and compensates you for any injury or death. In addition to this, you can take advantage of various other perquisites and add-on riders that provide all-round protection and assistance for various possible on-road scenarios.
The advent of multi year car insurance
Traditionally, the validity for any kind of motor insurance has been for a period of one year from the date of policy issuance. However, in July 2018, the Supreme Court mandated that all new motor insurance policies will compulsorily cover third-party liability for a period of three years. This was brought in to bring greater motor insurance penetration and improve assistance in case of an accident.
While a third-party liability cover has to be issued for three years, a comprehensive cover can be purchased for one year at a time. This makes the process a lot more tedious - having a separate insurance policy for third-party liability and another one renewed annually as a comprehensive cover isn’t easy to manage.
To resolve this issue, some general insurance companies such as Tata AIG have come out with a multi year car insurance cover that makes it effortless, convenient, and affordable to secure all-round protection for all parties involved.
What are the benefits of long term car insurance?
- Convenience: As we saw earlier, a multi year car insurance policy allows you to enjoy the benefits of comprehensive insurance coverage for three years at a time without the hassle of yearly renewals.
- Minimal compliance issues: Some insurance policies require a vehicle inspection every year when you renew your policy. A 3 years car insurance saves you the time and effort of going through these procedures.
- Protection from price hikes: The premium cost of third-party insurance is revised every year by the government, and over time this can get expensive. By purchasing long term car insurance, you can lock in on a fixed premium for three years and save 20-40% on annual renewals for a third-party cover.
- Additional discounts: Purchasing multi year car insurance can get expensive; hence, as a sweetener, the insurance provider may offer a discount on the purchase of a 3 years car insurance. Additionally, if you are a special needs driver, a member of a recognised automobile association, or have installed an anti-theft device in your car, you may be able to bring down your premium further.
- Transfer of NCB: Anytime during the term of the policy, if you sell your car or purchase a new one, you can transfer your accumulated no-claim bonus (NCB) to your new car and reap the benefits of discounted future premiums.
Features and benefits of long term comprehensive insurance:
Here are some of the benefits of the 3 years car insurance offered by TATA AIG.
- Protection against loss/damage to vehicle: The plan will compensate you for loss or damage incurred to the vehicle and its accessories, subject to a deduction for depreciation for parts mentioned in the policy.
- Third-party liability cover: Under this insurance plan, your liability is covered in case of any loss caused by your vehicle to a third-party.
- Personal accident cover: In case of injury or death caused to the driver/owner of the vehicle, they can be compensated up to a certain limit. This limit depends on the nature of the injury and can be compensated for up to Rs. 15,00,000.
Apart from these benefits, you can also choose add-on covers to enhance your 3 years car insurance plan. Some of them include:
- Depreciation reimbursement: This add-on means that your insurer will pay you the amount of depreciation deducted on the value of parts replaced under the own damage claim.
- Return to invoice: In case your car is damaged beyond repair/stolen, your insurer will pay the difference between the IDV you receive and the purchase price of the vehicle, or the current replacement price of the vehicle (whichever is lesser).
- Key replacement: Your insurer will reimburse you for the cost of replacing your car keys if they are lost or stolen, or the cost of replacing the locks if your car has been broken into.
Of course, there are also exceptions to the policy, including loss or damage sustained outside the geographical area, or any damage incurred due to war, invasion or nuclear activities. While you can see similar exceptions in most policies, make sure you #ThinkAhead and opt for a long term comprehensive insurance such as TATA AIG’s 3 Years Auto Secure Private Policy for a hassle-free experience.