Buying car insurance policy for your car is not enough. You must also make sure to renew it from time to time to keep it active. It is essential to renew it every year. People consider renewing insurance policy to be a tedious task and hence ignore it. Due to this, you will be breaking the law as well as putting yourself in financial risk. To tackle this situation, multi-year policies have been introduced by the Insurance Regulatory and Development Authority of India (IRDA).
Just like the name suggests, a multi-year car insurance policy will be valid for more than a year.You won’t have to go through the hassle of renewing the policy every year and your financial cover will remain intact for a longer time. Before going into the detail of the same, it is essential first to understand which aspect of a car insurance policy is mandatory.
Multi-year car insurance is mandatory
According to the Motor Vehicles Act of 1988, it is mandatory to buy a car insurance policy in India. Every car owner must buy at least a multi-year third-party insurance policy for their car, as per the new rule. It is not compulsory to buy an own-damage cover. Hence, it is not mandatory to obtain a comprehensive car insurance policy.
A third-party car insurance policy only protects you from the financial losses caused to the third party. Anyone apart from the owner himself or passengers of the insured car become the third party. If you do not even have third-party insurance, any expenses incurred must be paid by you.
Available coverages for multi-year policies
- Long-term comprehensive policy coverage
If you are someone who forgets to renew your car insurance policy on time, then multi-year policies are the best choice for you. You can go for a multi-year third-party (TP) car insurance plus multi-year own-damage (OD) insurance for the car. If you take this extensive multi-year policy, it will prove to be beneficial to you in the long run. This is because your premium is protected from the yearly hikes.
- The Long-term TP short-term OD coverage
Another option is to purchase a 3+ year third-party car insurance and 1 year of own damage coverage together. Your policy’s cost will be much less than compared to a long-term comprehensive policy. However, you will have to undergo car insurance renewal every year because of the own damage component. Only after renewing the policy, you will be able to stay financially protected against any damage caused to your car.
- The Long-term Third-party cover
If not the options mentioned above, you can also completely skip purchasing the own damage component and buy only multi-year third-party insurance, which has now been made compulsory for a 3-year term. Although this is a pocket-friendly option, any damages caused to your car won’t be covered. Also, all the expenses related to own damage must be taken care of by you. You might be left underinsured if you opt for this option, even after buying a car insurance policy.
Buying third-party car insurance ensures financial safety. Purchasing it online makes the process extremely easy and even more beneficial than purchasing it offline. If you are buying a car insurance for the first time, you need to know that before buying an insurance policy, you can make use of the car insurance calculator to calculate the premium and buy accordingly.