The risk of driving an uninsured vehicle cannot be undermined, especially as the MV Act of 2019 has made it compulsory for all vehicles to own an insurance coverage policy.
This has opened up avenues to think about long-term car insurance plans as a good investment option. Read on to learn about 3-year car insurance plans and why they are worth considering.
The New Law on Car Insurance Policy
Let us start by understanding the role of Indian Law in determining insurance policies for vehicles in our country.
Before September 2018, the Indian law mandated that car insurance policies be valid for up to 1 year from the policy renewal date. However, the Supreme Court of India in 2018 (September), made readjustments in the law, and made it compulsory for new cars to own third-party car insurance for 3 years.
Additionally, the standard motor insurance policy is open to renewal every year. Here are the different insurance policies that car owners can opt for:
Third-party insurance coverage for three years.
Third-party insurance coverage for three years, and own damage insurance coverage for one year.
Third-party insurance coverage for three years and Own Damage insurance coverage for three years.
If you do not opt for a 3-year car insurance policy, you may be subject to the following penalties under Section 81 of the MV Act 2019:
Vehicle Insurance for 3 Years - What is Included and What is Not
The following are covered under 3-year comprehensive insurance plans:
Damages due to natural calamities that include floods, lightning, fire, earthquakes, cyclones, etc.
Damages due to man-made disasters such as explosions, strikes, riots, theft,and other malicious acts.
Damage during transit by air, rail or road.
Third-party liability coverage.
Add-ons for enhanced insurance coverage for your car.
Exclusions under the 3-year car insurance coverage:
Regular car wear and tear.
Electrical and mechanical breakdown.
No valid driving licence of the insured car owner.
Mandatory deductibles.
Damage or loss of value due to depreciation.
The insured car’s driver is driving under the influence of intoxicating substances.
Advantages of Choosing a 3-Year Insurance for New Car
These are the advantages that make investing in 3-year car insurance plans worth considering:
Lower Premium Costs
With the option of cost savings and discounts, a 3-year car insurance policy price becomes much more reasonable. Discounts that lower the premium costs include:
No Claim Bonus discount, which can also be transferred over to a new car.
Discount on voluntary deductibles.
Discount on installing an anti-theft device in the car
Discount on being a member of a recognised automobile association, etc.
Convenience
An annual insurance policy carries with it hassles of renewing the policy every year. A significant benefit of opting for a 3-year car insurance policy is that you do not have to worry about annual renewal, policy lapse or even having to pay penalties for driving without insurance coverage.
Non-Renewal Risk Avoidance
Apart from paying fines, policy expiry can also lead to hefty expenses associated with car part replacement or repair. With long-term insurance coverage for your car, you can enjoy the coverage benefits for up to 3 years without having to worry about policy renewal.
Safeguarding from Hikes in Premium
In case of a 3-year insurance coverage, the premium is locked and set for the entire policy duration. Motor insurance premiums generally fluctuate due to several factors, including vehicle condition, fluctuating insurance market and driving history of the insured individual. Opting for this policy will save you from potentially having to pay a higher premium every year during renewal of the policy.
Averting Inflation Impact
A long-term car insurance coverage can prevent inflation from impacting insurance claims. The effect of inflation is evident in all aspects of our lives, including medical treatment and car repair.
As you lock in the premium rate and coverage for three years, you can stay financially protected from the rising costs associated with car repairs and medical treatments, among other policy coverage aspects.
If you want to get the most out of your coverage, you can opt for
Comprehensive Car Insurance, which bundles together third-party and own damage insurance policies.
Conclusion
It is evident that a 3-year motor insurance policy will be worth every rupee invested by you. Choosing the right long-term insurance policy for your car will help you enjoy all the benefits mentioned above. This way, your car will remain protected for a longer time without you having to bear unnecessary financial burdens time and again.
Reliance General Insurance saves you the pain of renewing your car insurance coverage by offering a
long-term car insurance policy for up to 3 years. This comes with several add-ons and discounts that you can choose for your 3-year insurance coverage.
Learn more about our
car insurance policy types and add-on options by exploring our official website. Our insurance policies have been designed to help protect your financially in times of trouble and to maintain the value of your car.
Frequently Asked Questions
Is it mandatory to opt for three years of motor insurance?
Yes, because the MV Act of 2019 makes it compulsory for all new car owners to invest in at least a 3-year third-party insurance coverage. However, you can personalise this policy to accommodate protection from other financial losses that your car can cause you to encounter.
Is personal accident cover mandatory?
Yes, the IRDAI dictates a Compulsory Personal Accident cover for one year. This enables the insured individual to remain financially protected in case of an accident that leads to medical intervention for the insured individual.