Short vs long term bike insurance: Which is better?

A two-wheeler is an important mode of transport in India. If you have a bike or scooter, then a third-party two-wheeler insurance policy is mandatory. As per National Crime Records Bureau (NCRB) data, despite the Covid-19 lockdown, India recorded 1.2 lakh cases of deaths due to road accidents in 2020. A large share of those killed in road accidents were two-wheeler riders. Two-wheeler insurance acts as a cover by offering protection from the damages due to accidents, saves you from legal liabilities and takes away financial stress. Two-wheeler insurance policies are widely differentiated between long-term and short-term ones.

Basic difference

The long-term two-wheeler insurance covers your two-wheeler for a period of up to five years as opposed to short-term two-wheeler insurance that requires you to renew your two-wheeler insurance annually. Both policies offer security and accident cover. The primary difference between long-term and short-term two-wheeler insurance policies is the period of the policy term. Apart from this, there are also other differences which are very important. Take a look:

1) Premium payment

In terms of policy renewal, long-term two-wheeler insurance requires premium payment once in three or five years, whereas in the case of short-term bike insurance, you need to pay it yearly.

A long-term bike insurance policy is cost-effective as it avoids any increase in the annual premium. In addition, most of the insurance companies offer discounts on premiums charged on long-term policies.

3) Flexibility

Short-term policies offer better flexibility compared to a long-term two-wheeler insurance policy. Because, in case of a short-term two-wheeler insurance policy, you can modify your policy terms every year and take advantage of any offers and discounts.

4) No claim bonus benefits

A long-term insurance policy is offered with a higher quantum of no claim bonus (NCB) discount compared to a short-term insurance policy. The discount can go up to 20% for the first claim-free policy year.

5) Riders facility

Add-ons come with benefits at a nominal extra charge and each one of them serves a specific purpose. Compared to long-term, short-term bike insurance policies provide you with more add-ons and you can make changes to these riders every year according to your needs.