Not sure which to pick between when it comes to long -term and short-term insurance? Let us guide you through the many differences between them.
Before you even plan on getting your much-awaited two-wheeler home, you need to figure out your insurance plan and make sure you have the best one in town. However, this often turns out to be a cumbersome task for many. With many options that are available in and on the market, you must figure out which policy fits the bill, which cover would be best for you and which add-on will serve your additional needs the best.
If you are still confused between a long-term or short-term two-wheeler insurance, let us help break them down for you before you make your pick.
Features
Options | Insurance Term |
| Fixed Premium Rates for The Insured Period | Long Term – Every expenditure, you know of, seems to have a 10% – 15% hike in prices on a yearly basis; from groceries to insurance to real estate. However, you can manage your finances better when it comes to long-term insurance. Your premium rates are fixed at the start of the policy; therefore, you do not have to pay a hiked amount each year. |
| Short Term – Short-term insurance witnesses a hike of 10% – 15% each year; therefore, your total premium amount will end up being slightly more expensive. | |
| OD Premium Rates | Long Term – Being a long-term member comes with its perks. Since you have been loyal to one single insurance provider for a long span of time, they offer Own Damage discounts. This reduces the costs borne during the issuance of the policy. |
| Short Term – For short-term insurance, OD discount factor does not come into the picture. | |
| No Claim Bonus Benefits | Long Term – Long-term insurance policies have a No Claim Bonus (NCB) discount that could go as high as 20%. This discount is due to the fact the policyholder has made no claim for an extended span of the policy term, hence, if eligible, you could get higher an NCB discount. |
| Short Term – For short-term policies, NCB is applicable as well. However, the period for not having made a claim is shorter. An NCB discount offered is present, but relatively lesser amounts of discounts are available. | |
| For Old Vehicles or Short-term Vehicles | Long Term – Long-term policies are not meant for those who have old vehicles as they might not last 3 years. |
| Short Term – Short-term insurance proves to be beneficial if you are looking at a temporary vehicle or an old vehicle that might not stay with you for 3 years or more. |
To conclude, long-term two-wheeler insurance plans are in general a better financial option than the short-term plan. Plus, you avoid the hassle for yearly renewals, the possibility of forgetting renewals, etc. Going even a single day without an insurance policy is considered a high risk. Any accident or damage that happens during the time is not covered. It is also illegal to ride without valid insurance. Therefore, a long-term plan is considered advisable as opposed to a short-term plan.