Insurance Premiums For New Two-Wheelers To Increase From 1 September

Although insurance is mandatory for all road-worthy vehicles, insurance companies have been asked to push for long-term or third-party covers because of lower penetration

Starting September 2018, customers will witness a substantial hike in the on-road price of new two-wheelers. For what reason you ask? On July 20, the IRDAI (Insurance Regulatory and Development Authority), following an order from the Supreme Court, had issued a circular stating that insurance covers for all new two-wheelers will be increased to five years, with a hike in premium of course. The new norm would apply to all policies sold from September onwards. Yes, long-term premiums would surely increase the on-road price of new vehicles, but it will also save consumers the hassle of renewing their insurance policies every year.

 

So why’s this new regulation in place?

Essentially, to improve penetration and avoid uninsured vehicles on the road. After a vehicle is bought, its depreciation accelerates, and almost everyone tends to skip annual renewals. Instead, they opt for policies that only provide partial cover for the vehicle. According to Sanjay Datta, head of underwriting, ICICI Lombard General Insurance. “The question of uninsured vs insured will go away. The extent of insurance cover on third-party vehicles will be bigger and better.”

 

And how much will it cost you?

For instance, if you purchase a brand new bike above 350cc, you’d have to pay Rs 13,034 compared to the present Rs 2,323. That's almost five times the current premium. It maybe a step in the right direction, but the thought that a KTM 390 Duke would now cost you close to Rs 3 lakh due to this policy is a bit unnerving.

On the contrary, you could avoid this surge charge on Bajaj products by availing its hat-trick offer before August 31. As per the offer, you get free insurance for one year with the purchase of a Platina, Discover, Pulsar 150, Pulsar NS160 or V range of motorcycles. A smart move like that could save you approximately Rs 4,800 on a Platina and Rs 8,000 on the Pulsar NS 160 on account of insurance cost. In addition, customers also receive other benefits such as two years of free service for the CT100, Platina, Discover, V-series, Pulsar and a five-year warranty at no extra charge.

Bajaj has also stated that it will keep its dealerships open till 11pm on August 30 and 31 so that customers can take advantage of this offer.

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