Buying two-wheeler insurance doesn’t your bank the way purchasing car insurance does. When you buy a new car, there’s a huge gulf between the showroom price and the on-road price of the vehicle.
One of the major reasons for this is the cost of insurance, which can easily push the Rs. 15,000 mark. This gulf exists with the prices of two wheelers as well but it doesn’t pinch as much because these insurance plans do not have such large price tags.
However, new mandates from the IRDAI have caused the prices of insurance policies for new two wheelers to increase. This will result in a noticeable increase in the on-road prices for new two wheelers.
And though rising prices are a common occurrence these days and we all accept them with a pinch of salt, the rise in the cost of two wheeler insurance has its silver linings. Don’t believe us? Well, this article will explain why the jump in prices is actually advantageous for you.
So let’s say you’re in the market for a new two wheeler. You’ve done your research and have an idea of the showroom price of the vehicle. However, upon approaching the outlet, you find the on-road prices are a few thousands more than you imagined.
Wondering why? Well, this is because, ever since the 1st September, 2018 the IRDAI has made it mandatory for all new two wheelers to be sold with long term-third party insurance policies instead of single year TP cover.
What this means is that, where your previous most affordable option was to buy a single year of TP cover, you now have to purchase 5 years of third party cover. These new plans will cost you Rs 1,045 for vehicles with engine capacity below 75 cc, Rs. 3,285 for vehicles with engines up to of 150 cc, Rs. 5,453 for vehicles with engines of up to 350 cc and Rs. 13,034 for those exceeding 350 cc.
That’s not all – the IRDAI has also made it mandatory for insurance companies to provide two-wheeler plans with an increased personal accident cover. This increased PAC cover will bump-up your premium by Rs. 750 plus GST – not too long ago the PAC component cost only Rs. 100 plus GST. In combination with the long-term plans, you should be looking at a decent increase in the cost of two-wheeler insurance.
However, the increased costs bring you many advantages. First, 5-year long term TP cover is calculated keeping in mind today’s third party premium amount. With a single year plan, you’d have to deal with increased premium amounts every year as the IRDAI hikes TP cover premium amounts annually. Long-term plans also ensure you do not have the headache of renewing the plan every 12 months.
When it comes to the increased PAC, you should know that the jump from Rs. 100 to Rs. 750 increases your PAC from Rs. 1 lakh to a huge Rs. 15 lakh. This means a much, much higher compensation in case of serious injury arising from an accident.
So in summation, you are getting more value out of your 2 wheeler insurance policy, in exchange for an increased cost. It’s fair considering the prices of most other things are going up without providing any additional benefit. So when you pay more, you can the advantage of more peace of mind.
Hope this has been helpful, good luck and ride safe!