Motorcycles and scooters to get three-years insurance policies

How many times have you been caught by a traffic cop only to realise that your insurance has expired and a Rs 100 fine is awaiting you? Well, some of us have been through this dilemma of forgetting to renew insurance copies but now, there is a relief.

The Insurance and Development Authority (IRDA) has approved three-year insurance for two-wheelers in India. The governing 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. In a circular to all general insurance companies, IRDA said that the total premium for third-party insurance would be thrice the annual premium and it cannot be changed during the tenure of the policy.

IRDA is also keen in getting this new policy for four-wheelers as well but it will take some time.  When it comes to commercial vehicles, the insurers are reluctant to renew insurance policies due to high claim ratios but with two-wheelers, insurance is not loss-making.

"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," said G Srinivasan, chairman, New India Assurance.

This comes as  great news for Indian consumers who have always complained about being unable to make time from their daily schedule to renew their vehicle insurance. This will not only save time but also daily operational costs of the insurance companies.