Does Increase in Premium Affect Your Two-wheeler Policy Renewal?

Insurance Regulatory Development Authority of India is responsible to revise premium rates for auto insurance every year or so.

If you are not aware of this, don’t worry! We will help you to understand how it affects your bike insurance premium or policy renewal.

Who’s behind it?

This year up to an 40% hike in premium is suggested which has been effective from April 1, 2017. This increase is only applicable to third-party insurance, as the premium for the same is only fixed by the insurance regulatory.

We can call it big DADDY of insurance industry. IRDA which is a government body regulates all insurance related activities starting from insurance products to claim process, from companies to brokerage; everything is looking after by IRDA.

Wait, are you new to insurance? These terms may appear difficult to you. Fret not! We’ll help you.

What is Third-party Insurance?

Third Party Insurance is a mandatory policy in India which protects you during any legal liability that might occur if your bike hit with someone else’s and cause injury or damage to others property. Hereby, TP policy is essential to own by every two-wheeler or four-wheeler owner.

One can buy this as a standalone policy or a part of the coverage under a comprehensive bike insurance policy. The only difference if you buy it as a part of a comprehensive plan is that you’ll be covered for own damage as well, whether it is an accident case or theft or a broken windshield, your insurer will pay for the loss.

Why is this Hike?

The two reasons for this hike is justified.

One is inflation, which is evident in every field, why not something as important as insurance. It’s not unfair.

Secondly, the increased claim ratio. The total number of claim registered for motor insurance in the previous year’s bound IRDA to increase in premium rates. You pay a small amount to pay you back for a huge loss or damage. Moreover, IRDA is very strict to the companies about not rejecting a claim. Due to too many claims in a year, the insurance companies also need to cover up the losses. So, the ultimate solution is a hike in premium. Fair deal!

Can I Save Some Cash?

While new rule imposes 50% or less hike in insurance premium, people with third party insurance only or with comprehensive plan, would require to pay more at the time of policy renewal.

Can you save some bucks? YES!

With the present scenario, chances are high for another increase in premium rate for next year as well. If your bike insurance renewal due date falls next year, prefer renewing it by the end of March 2018. This way you’d pay less than what you’d have paid after a hike. However, it is just an assumption. We don’t grantee on the hike.

If your policy is still active, you don’t have to undergo inspections or paperwork. Whether it is two-wheeler or car, simply go online and renew it!

In case your car policy expired already, you shouldn’t waste time roaming here and there. Visit the insurance comparison websites, compare and renew the policy with the current insurer or if you get a fair deal with some other insurer than switch to it. For instance, if you own Iffco Tokio bike insurance for two years. But when your friend suggested a comparison site called policybazaar.com, you visit the website to compare policies and get certain better options to move on. After that you visit the official website and get a fair idea of the plans. This way comparison of insurance helps you get a better deal!