Why Should You Buy Long-Term Car Insurance?

Introduction

Owning a car brings freedom and convenience — but it also comes with responsibility. One key responsibility every car owner has is maintaining valid car insurance. While most people prefer a 1-year car insurance policy, the smarter choice today is opting for a long-term car insurance plan.

Long-term car insurance doesn’t just save you from the hassle of yearly renewals — it offers better protection, discounts, and peace of mind. Let’s understand in detail why you should buy long-term car insurance, how it works, and what benefits it offers.

What Is Long-Term Car Insurance?

Long-term car insurance is a policy that provides coverage for more than one year — usually two or three years — in a single purchase.

It includes both:

• Third-party liability cover (mandatory by law), and
• Own damage cover (for your car’s damages).

Introduced by the Insurance Regulatory and Development Authority of India (IRDAI), this option helps car owners stay insured continuously without worrying about annual renewals.

Why Do You Need Car Insurance in the First Place?

Before diving deeper, let’s quickly recall why car insurance is important:

• It protects you from financial loss in case of accidents, theft, or damage.
• It covers third-party liabilities, which are legally mandatory under the Motor Vehicles Act, 1988.
• It ensures peace of mind knowing that unexpected repairs or accidents won’t hurt your savings.

Now, instead of renewing this policy every year, a long-term plan simplifies your life and offers additional financial advantages.

Top Reasons to Buy Long-Term Car Insurance

Here’s why long-term car insurance is a smarter, more beneficial choice for Indian car owners.

1. Say Goodbye to Annual Renewals

The biggest advantage — no more remembering renewal dates every year.

With a long-term policy, you’re covered for 2 or 3 years at once, saving time and reducing the risk of policy lapse due to forgetfulness.

Expert Tip: A lapsed policy can lead to fines, vehicle inspection, and even rejection of claims. Long-term insurance prevents such hassles.

2. Protection from Premium Hikes

Every year, IRDAI revises third-party premium rates. These rates often increase by 10–20% annually.

With a long-term policy, you lock in the current premium rate for multiple years — meaning you pay less compared to annual renewals.

Example: If your 1-year premium is ₹6,000 today and rises 15% next year, you’ll pay ₹6,900. But with a 3-year plan, you’ll still pay ₹6,000 annually locked-in — saving nearly ₹2,000 over the term.

3. Continuous Coverage = No Policy Lapse

If your policy expires, your car becomes uninsured — and driving it can lead to legal fines or claim denial.

Long-term car insurance ensures uninterrupted coverage, so you stay protected all year round without worrying about lapses or reminders.

4. No Inspection Hassles at Renewal

When a car insurance policy lapses, insurers often require a physical inspection before renewal.

That’s extra time and effort!

With long-term insurance, you skip this process entirely, as your policy remains active for several years straight.

5. Avail Attractive No Claim Bonus (NCB)

If you don’t make a claim during your policy period, insurers reward you with a No Claim Bonus (NCB) — a discount on your renewal premium.

6. Convenience and Peace of Mind

Managing renewals, policy documents, and payment reminders every year can be tedious.

Long-term car insurance offers hassle-free protection — pay once, stay covered for years.

You also stay worry-free while traveling long distances or abroad, knowing your car is continuously insured.

7. Ideal for New Car Owners

IRDAI mandates that all new cars must have at least a 3-year third-party cover.

So, if you’ve recently bought a car, choosing a comprehensive long-term policy that combines both third-party and own damage cover makes more sense than buying them separately.

8. Better Discounts and Add-on Options

Many insurers offer special discounts or extra benefits on long-term plans — such as:

• Reduced own-damage premiums
• Extended roadside assistance
• Free towing and repair benefits
• Discounts on popular add-ons like Zero Depreciation, Engine Protect, and Key Replacement

These features enhance your car’s coverage without significantly increasing your premium.

9. Long-Term Financial Savings

Let’s do a quick comparison:

Type

Annual Premium

3-Year Total

Possible Hike (%)

Total Payable

1-Year Policy

• 7,000
• 21,000

15% each year

• 24,000+

3-Year Long-Term Policy

• 18,000 (one-time)
• p>

No hike

• 18,000

Savings: ₹6,000+ plus time and peace of mind!

10. Better Resale Value

Having a long-term, claim-free insurance record improves your car’s resale value.

Buyers prefer vehicles with continuous insurance coverage as it shows responsible ownership and easier transfer of policy.

How to Buy a Long-Term Car Insurance Policy

Buying a long-term policy is simple and can be done online in minutes:

1. Visit your preferred insurer’s website.
2. Enter your car details — make, model, registration number, etc.
3. Choose a 2-year or 3-year plan.
4. Add optional add-ons (Zero Dep, Engine Protect, etc.).
5. Review premium and pay securely online.

Once payment is done, your e-policy is instantly emailed to you.

Top Insurers Offering Long-Term Car Insurance

Most major insurers in India now offer long-term plans, including:

• HDFC ERGO Car Insurance
• ICICI Lombard Car Insurance
• Tata AIG General Insurance
• Bajaj Allianz Car Insurance
• SBI General Insurance
• Reliance General Insurance
• Digit Insurance

Compare features, claim ratios, and add-ons before purchasing.

Conclusion

Buying long-term car insurance is a smart financial move — it saves time, locks in your premium, and ensures non-stop protection for your vehicle.

It’s especially beneficial in today’s environment where premium rates and repair costs keep rising every year.

So, instead of renewing your policy annually, choose a 2 or 3-year car insurance plan for peace of mind, savings, and continuous protection.

Frequently Asked Questions

Q.1. What is long-term car insurance?

It’s a car insurance policy that offers coverage for more than one year—usually 2 or 3 years—under a single premium payment.

Q.2. Is long-term car insurance cheaper?

Yes. It locks current premium rates, protects you from yearly hikes, and often includes discounts from insurers.

Q.3. What are the benefits of long-term car insurance?

It ensures continuous coverage, avoids annual renewals, prevents lapses, saves money, and secures higher No Claim Bonus (NCB).

Q.4. Can I cancel my long-term car insurance anytime?

Yes, you can cancel it anytime. The insurer refunds the premium for the unused policy period, as per terms and conditions.

Q.5. Which insurers offer long-term car insurance in India?

Top insurers like HDFC ERGO, ICICI Lombard, Tata AIG, Bajaj Allianz, Digit, and SBI General offer long-term plans.

Square Insurance is a trusted name in the insurance industry, offering customers the ability to compare, buy, claim and review insurance policies at one place to ensure they receive the best possible service.