Team-BHP - Two-wheelers get 3-year insurance cover, coming soon for cars

Quote:

Two-wheeler owners can now avoid the hassle of buying cover every year with the regulator allowing a three-year insurance policy. The Insurance Regulatory and Development Authority has devised a three-year version of the mandatory third-party liability cover and it has encouraged companies to come up with policies that cover the vehicle.

"We are definitely interested in filing a long-term product. In 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," said G Srinivasan, chairman, New India Assurance. He added that besides long-term two-wheeler insurance, the company was keen on launching similar policies for cars.

http://timesofindia.indiatimes.com/i...w/40196650.cms

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Originally Posted by darklord (Post 3506023)

http://timesofindia.indiatimes.com/i...w/40196650.cms

Good move. But would want to know what will happen to the IDV and NCB for years 2 & 3, since we will be effectively paying for all the 3 years upfront. IDV may still be calculated easily coz of depreciation but NCB will be a tricky issue - will they continue to consider blocks of 1 year to give the NCB or will the block change to 3 years?

The fine print is that the 3 year policy is only for third party damage. For own damage, you still have to buy it annually. This article has that details
http://auto.economictimes.indiatimes...elers/40129708

I think the complication of how to calculate IDV and NCB in a 3 year policy, might be a tad too complicated for them to launch a 3 year own damage policy.

Quote:

Originally Posted by aby (Post 3506245)

Right. Makes sense. Basically this is for folks who don't bother with insurance after the first year. But then what happens after 3 years? Will be interesting to know how they arrived at this number - 3. Maybe something to do with the premium and how much excess will people pay upfront.

Insurance co can go to any lengths to complicate things for the common man. In attempt to save on the renewal letters, annual insurance policy documents and rest of the administrative expenses they think of complicating insurance process by planning to introduce 3 year policy for TP liability only and not for Own damage policy. By this do they guarantee that there will be no change in the premiums once paid even if the TP rates change, we have seen it change almost every year (thanks to these very Insurance co who claim losses in TP claims).

Own damage Insurance has its own headache calculations i.e Depreciating IDV, NCB application which is going to be a pain to deal with if such s long time cover is being planned. I wonder why there isnt any customer involvement when such plans are thought of.

IMO I am not if favour of such policies which are half baked and half thought.

An Update:

IRDA has approved the three year insurance cover for the 2 wheelers, however the premium for the same is going to be at least 2.5 times (IRDA circular calls for 3 times) the single year premium. This is now not just limited to TPL premium but for comprehensive coverage too. This becomes now an expensive affair. Although a 3 year policy eliminates the need for yearly renewals, helps Insurance co to reduce the yearly paperwork, the customer is locked for three years for the same premium. This helps beat the inflation and any increase in the yearly premiums but does not talk anything about the No Claim bonus applicable in case of claim free year. It is also not clear how the add on covers opted for along with the policy be treated, whether they would be applicable for 3 years too. For eg whether zero dep add on cover would be allowed for 2 wheelers for 3 continuous year if bought along with the comprehensive policy.

New India Assurance seems to have taken the lead in coming out with such a policy offering locked premium for 3 years although nothing is available on their website as of now.

IRDA circular attached for reference.

http://www.business-standard.com/art...1100232_1.html