Good News For New Two-wheeler Buyers! The 5+5-year Insurance Policy Has Been Revoked

The change will come into effect from August 1

Currently, it is mandatory to get a 5+5 year or 5+1 year Third Party + Own Damage insurance cover for two-wheelers. From 1 August onwards, the 5+5 year policies will be banned. The decision should lessen the burden on new buyers.

For nearly two years, new motorists have been burdened as the government enforced a mandatory long term insurance policy package, which was set at five-years third party coverage for two-wheeler buyers. In addition to this, many buyers were also being forced/convinced to opt for a 5+5 year own damage and third party policy. Now, a much needed relief has comes in for those who are setting out to buy a new bike/scooter as the Insurance Regulatory and Development Authority of India (IRDAI) has banned the 5+5 year policies. The plan will be enforced from August 1, 2020.

Those who have purchased a motorcycle or a scooter over the last two years would know how much more moolah they’d have ended up shelling if they have to opt for a 5+5 year policy. This has proved to be too taxing on buyers, especially for those who were taking out loans or for those who were unhappy being locked up with their existing insurance partners. 

Under the current policy, the insurance amount that one would end up spending for a scooter like the Honda Activa 6G turns out to be around Rs 4,500. And that amount is bound to increase as the cubic capacity goes up. The insurance for the Yamaha R15 v3 is roughly Rs 9,500 while for bikes like the KTM 390 Duke and the Royal Enfield Interceptor 650, it is approximately Rs 18,000. Expect a significant drop in insurance premiums from August 1 onwards, as the 5+5 year policies will not be offered anymore. And if you are still confused, head over to InsuranceDekho.com to get the best quote for your two-wheeler or even four-wheeler insurance.