Paras Pasricha
Car owners spend weeks comparing vehicle features, yet reduce insurance to a single question: “How much is this year’s premium?” With rising repair costs and sophisticated vehicle tech, looking beyond the annual renewal cycle offers far greater convenience and superior long-term financial value.
A simpler way to insure your car
New car buyers start with a mandatory 1+3-year bundled plan (one year of own damage plus three years of third-party protection). Once that initial year ends, transitioning to a multi-year standalone own damage (OD) policy eliminates the hassle of annual renewals and prevents accidental lapses during the vehicle’s highest-value years.
Insulation from inflation
Annual renewals expose you to premium hikes driven by labour costs and inflation in spare parts. As cars adopt advanced driver assistance systems (ADAS), sensors, and complex electronics, even minor repairs result in soaring bills. A multi-year policy protects you by locking in your OD premium for up to three years, providing absolute financial certainty.
Tangible cost savings
Insurers offer significant upfront discounts on long-term OD premiums. When combined with the annual price hikes that you completely avoid, the cumulative savings are substantial.
For a new Maruti Grand Vitara (approximately Rs 13.68 lakh), a one-year comprehensive policy with key add-ons costs around Rs 19,700. Structuring this via a multi-year horizon proves significantly more economical over three years than purchasing single-year renewals back-to-back.
Protection from claim shocks
Under a standard one-year policy, making a claim wipes out your no-claim bonus (NCB), making the next renewal expensive. With a multi-year OD policy, the premium remains locked. Even if you file a claim, you won’t face an immediate hike because there is no annual repricing. Conversely, claim-free years allow your NCB to safely accumulate up to 50%.
Future-proof your coverage
As cars become technology-driven, insurance must evolve. Long-term policies should be paired with crucial add-ons: zero-depreciation for full parts replacement value, engine protection, roadside assistance, and specialised battery protection for EVs and hybrids.
Insurance shouldn’t be about finding the cheapest rate for the next 12 months. It’s about securing reliable, inflation-proof protection for the entire duration of your vehicle ownership.
The author is business head, Motor Insurance, Policybazaar
Disclaimer: This article is based on a recent ITAT Pune ruling in a specific case. Judicial decisions are fact-specific, and their applicability depends on individual circumstances. Taxpayers should seek professional advice before relying on this ruling for their own cases.
Every financial journey has a turning point. What’s yours?
Financial Express is launching a new series highlighting real experiences with money, investments, and the taxman. Did a sudden tax rule catch you off guard? Did a piece of financial advice change your life? Your story could provide invaluable, practical lessons for thousands of fellow taxpayers. Share your experience with us. We respect your privacy: no stories will be featured without a direct conversation and your full consent. Thank you.