The 5-year Insurance policy is not protecting your bike for 5 years. Shocking? You all must have been surprised by the fact and many people wouldn’t believe this as well nor you should accept any fact or information blindly. I am going to uncover the most ignorant fact which can change your life and your dear ones. Let’s get into it. And in the end, you will understand why I am saying this.

Why 5-year insurance bike policy made compulsory?

Insurance Regulatory and Development Authority of India (IRDAI) made 5-year insurance cover compulsory for bikes due to following reasons:

• The rapid increase in the number of two-wheelers on roads and increasing road accidents
• To ensure that the maximum number of vehicles get insured so the problem of the uninsured bike gets down
• Lower the burden on bike owners worrying about money for renewal and in the case of an uninsured bike, compensate for the loss of a third person loss and damage to their own vehicle in accidents.

So IRDAI has changed the two-wheeler insurance rules and regulations which state that it is necessary for every new two-wheeler to issue a long-term insurance policy for 5 years.

According to the Motor Vehicle act, 1988, Third party insurance was already compulsory for all vehicles and now IRDAI made it compulsory for 5 years of tenure due to the
Supreme Court decision.

What 5-year Insurance policy of Two-Wheelers hold?

This policy gives vehicle owners two choices each having its advantages and disadvantages:

• 5-year TP (Third-party) plan+ 1 year OD (Own Damage) Plan
• 5-year TP (Third-party) Plan

Third-party(TP) plan: It covers you against legal liabilities towards a third person, which includes death, injuries, damage to a vehicle or any other property by your vehicle.
Own Damage(OD) plan: It provides protection only for your insured two-wheeler in case of any losses or damages caused to it.

Let’s understand how this policy cheats you.

People mostly choose a 5-year policy with their own damage(OD) cover because of the total protection it holds. But very few know that the OD plan in the policy needs to be renewed every year just like a normal 1-year insurance cover. After the expiry of 1 year OD plan, companies are not liable to provide a claim for your own bike’s damage repair.
Now, this policy can only be used for compensation of a third person caused by your bike. There’s another great problem associated with this. Once the OD plan of insurance cover expired, your vehicle registration number wouldn’t be visible in the RTO system. This might cause you trouble on road.
5-year insurance covers protecting your vehicle only for 1-year. Quite contrary to the name right?

Conclusion

People get into traps laid down by their own lack of knowledge. Do you know because of this little ignorance, the Damage Claim rate of the new bikes had dropped so low since 2018? Companies loved this fact so much that they don’t even bother to create awareness. So next time, don’t get swayed away by the fact of not renewing your bike insurance for five years. You always need to renew the OD plan of policy.
It is advised by the experts to either renew your OD plan or endorse the vehicle number with your existing 5-year policy. Click here to buy a vehicle Insurance Policy and get personalized advice from our experts. We provide every bit of information
So how do you feel knowing this information, comment below and share your view?