What does a long-term or multi-year car insurance policy entail?
In India, every car owner must have 4-wheeler insurance as car insurance creates a financial shield against accidents, theft or damage to the vehicle. Although most car insurance policies protect for a year or so, long-term or multi-year car insurance comes with advanced coverage, usually more than a year.
Other than advanced coverage, there are various other benefits when you opt for a long-term car insurance policy or multi-year car insurance policy, such as cost savings, protection against premium hikes etc.
Through this article, we shall look into long-term or multi-year car insurance policy advantages and the history of long-term or multi-year car insurance so that you can easily compare car insurance online and crack the best deal for your motor car insurance needs.
What is a long-term or multi-year car insurance policy?
A long-term or multi-year car insurance policy is insurance for a car that provides coverage benefits of both third party & own car damages due to accidents and other natural and man-made disasters such as personal injury or disability. In the case of such a policy, the nominee gets death benefits on behalf of the insurer
Further, there are various other benefits, especially for those who face issues while tracking the renewal dates & deadlines. Such policies bundle comprehensive benefits of car insurance that can assist drivers in managing the costs and risks associated with possessing and operating a vehicle.
History of long-term or multi-year car insurance policy
The summon was passed in 2018 by the Supreme court of India, making it mandatory for every new car owner to purchase third-party or three-year car insurance to ensure long-term protection against third-party liabilities. However, the limitation occurred when the own Damage insurance plans required yearly renewals, making them tedious for renewal, further adding maintenance difficulty along with maintaining a third-party cover, as it added additional cost.
Therefore, to solve this problem, insurers came up with the idea of multi-year or long-term insurance policies that offered extended coverage, i.e., three or more, so that the holder can be stress-free with regards to the renewal of the policy every year.
What are the benefits of long-term or multi-year car insurance policies?
Long-term or multi-year insurance policies are best for those with difficulty keeping track of renewal dates, which can lead to issues with their premium payments and the loss of several significant benefits. But with long-term or multi-year insurance policies, the policyholders enjoy the convenience of hassle-free management as there is no yearly renewal making it the best option when you are busy with multiple commitments. Further, you can also enjoy the benefit of avoiding the tedious process of checking your car before policy renewals, as it leads to a rise in premium amount.
Lowers the Risk
A missed insurance renewal can lead to expenses which one has to bear out of their pocket, and if there is an additional accident situation to it, then the situation is worse. But with long-term or multi-year car insurance policies, you lower your risk, as you don’t enter the hassle of every year renewal nor the hassle of getting your car examined, making a save on money as well.
Cost Hike Protection
Whether it is due to inflation or any other reason, such as policy modification, the insurance industry faces significant policy hikes leading to expensive renewal costs for the policyholder. But with multi-year car insurance, you can save approx upto 20-40 % of hikes on your yearly renewal charges.
Provides Additional Discounts
Although long-term or multi-year insurance policies seem expensive, most insurance companies offer significant discounts for encouragement with extended duration coverage. Also, there are additional discounts if your car is fitted with anti-theft devices from a recognized automobile organisation.
Insurance companies offer NCB benefits if there is no insurance claim in an earlier year. And with a long-term or multi-year insurance policy, you get greater NCB compared to a standard car insurance policy. Further, you also get to enjoy the benefit of transferring your accumulated NCB if you buy a new vehicle or sell the old one.
A long-term or multi-year car insurance policy comes with benefits beyond the standard scope of a car insurance policy. Not only do they offer extended coverage but also additional benefits such as relief over cost hikes, discounts, greater NCB etc. If you are a car owner, consider this option as it is hassle-free, and a simple comparison of car insurance can get you the best option that matches your car insurance requirement while saving on cost.
People Also Ask
Is it better to have multi-car insurance?
Yes, it is better to have a multi-car insurance policy than standard car insurance policies as they come with various benefits such as advanced coverage, convenience benefits, cost hike protection, additional discounts, and greater No Claim Bonus (NCB) benefits.