Driving an uninsured vehicle in India comes with huge risks. If you are driving a car without third-party insurance, you will face legal consequences. Secondly, if you have an accident, you will have to bear the exorbitant expenses. This is why vehicle owners prefer to buy car insurance.
Depending on the duration, vehicle insurance is classified as short-term or long-term car insurance. In this blog, we will learn in detail about the benefits of long-term and temporary car insurance policies.
Understanding Short-Term Car Insurance
Short-term or temporary car hire insurance is a type of vehicle insurance that is valid for a shorter duration. It is typically good for individuals who do not wish to drive a car for a longer duration.
Most vehicle owners purchase short-term car hire insurance when they are on vacation or on a business trip. With temporary car insurance policies, vehicle owners will get immediate protection against third-party or property damage, accidental damage and more.
Benefits of Short-Term Car Hire Insurance
There are various benefits of purchasing short term car insurance, such as:
- Cost Effective: Temporary car insurance for hire vehicles or rented vehicles is much cheaper than traditional car insurance policies.
- Flexible: Another benefit of short-term car insurance is that it is flexible. Policyholders can choose the type of coverage based on the time.
- Easy to Purchase: Buying short-term car insurance is easy. Vehicle owners can purchase the plan online with zero hassles.
Understanding Long-Term Car Insurance
A long-term car insurance policy, also known as multi-year vehicle insurance, is a type of insurance coverage that is valid for a longer duration, typically 2 to 3 years. This type of car insurance is beneficial for individuals who want to renew their vehicle insurance for a longer duration without worrying about yearly renewal.
Furthermore, the IRDAI has also made long-term car insurance mandatory for vehicles sold after August 2019. It ensures continuous coverage and compliance with the law.
Benefits of Long-Term Car Insurance
Here are some of the benefits of investing in long-term car insurance:
- Competitive Premiums: Different insurance provider offers discounts and offers on long-term car insurance premiums because it helps reduce the administrative cost
- Avoid Risk of Non-Renewals: Most vehicle owners forget to renew their policy every year, so in case of accidental damage and loss, they have to bear expenses out of their pocket. With long-term car insurance, they do not have to worry about the yearly renewal.
- No-Claim Bonus: A no-claim bonus is a discount on a car insurance premium that a policyholder gets for not making a claim. With long-term car insurance, policyholders will get a higher NCB discount.
Conclusion
Understanding short-term and long-term car insurance is crucial before making a purchase decision. If you do not require extended coverage, it is best to go with temporary car hire insurance or pay-as-you-drive car insurance. However, if you are looking for extended coverage with zero hassle of yearly renewal, then go with long-term car insurance policies.
