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Difference Between Long-Term and Short-Term Two-wheeler Insurance

Team AckoFeb 27, 2024

Two-wheeler insurance policies act as a cover by offering financial  protection during the time of crisis, especially when you meet with an unfortunate accident. Vehicle insurance enables you to recover financial losses caused due to unfortunate circumstances.

It could be a cumbersome task when you have to renew your bike insurance policy every year as you’ll have to remember the renewal date to ensure the premium is paid on time. If you miss renewing the policy, it leaves your two-wheeler uninsured and you’ll be found violating the law. 

Since you have decided to get a two wheeler insurance policy, you may be confused between several choices in the insurance market, and unable to decide on the right insurance policy for you.

Insurance policies for two-wheelers are classified into long-term and short-term. Both policies offer security and accident cover. But, which is the best or the most suitable insurance cover for your two-wheeler? Let’s understand the two different types of bike insurance plans before you make an informed choice.




What is the Difference Between Long-Term and Short-Term Two-Wheeler Insurance?

It’s obvious from the name, the difference is the policy term or period. While short-term two-wheeler insurance policies offer coverage for one year and require to be renewed annually, long-term two-wheeler insurance policies offer coverage of up to 5 years. As per the new rule, new two-wheelers must be insured with a 5-year Third-Party policy.  A long-term policy removes the hassle of renewing your policy every year and keeps you shielded from the consequences associated with the expiry of the policy for a longer period.

Along with the extended coverage advantage, here are other differences which sets them apart:

Policy Renewal Date:

As mentioned, you’ll have to pay the premium just once in three or five years, saving you from policy lapses. While long-term policies’ renewal date is once in three or five years, short-term policies have to be renewed every year.


You can revisit or modify your bike insurance in short-term two-wheeler insurance policy every year and take advantage of any offers and discounts. Or, you could choose from various Add-ons such as Zero-depreciation, No Claim Bonus Protection, etc. Hence, short-term policies offer better flexibility compared to a long-term two-wheeler insurance policy.


A long-term bike insurance policy is cost-effective as it avoids any increase in the annual premium which could be imposed by the Insurance Regulatory and Development Authority of India (IRDAI). Also, most of the insurance companies offer discounts on premiums charged on long-term policies. If you want a cost-effective solution, the long-term two-wheeler insurance policies will save you money.

Short-term insurance policies are prone to price hikes on a yearly basis; however, if you plan your finances better, you can avoid the increase in pricing of your bike insurance annually. You can choose the long-term insurance cover as the premium amount is fixed at the beginning of your policy, hence, you don’t have to pay a hiked premium every year.


Short-term bike insurance policies provide you with more Add-ons. These are riders along with your insurance cover for your bike such as Zero-Depreciation, Return to Invoice, NCB Protection, etc. Compared to long-term insurance, short-term policies have an advantage when it comes to including riders to your policy as you have the option to include these riders every year.

NCB Benefit:

Long-term insurance policy is offered with higher quantum of NCB discount compared to a short-term insurance policy. The discount can go up to 20% for the first claim-free policy year. For short-term bike policies, you still get the benefit of NCB; however, the time frame for not raising any claim is much shorter. While you still get a discount, it’s comparatively lower than long-term insurance policies for two-wheelers.

Own Damage (OD) Premium Rates:

As a long-term bike insurance policyholder, you enjoy perks offered by the insurer since you have a long relationship with them. Insurers offer discounts on Own Damage which helps you reduce the cost borne when the policy is issued. However, for short-term bike insurance, OD discount does not apply at all.

Old Vehicles Vs. New Vehicle:

If you have an old two-wheeler which might not last more than 3 years, short-term insurance policy is meant for you; however, if you have a new vehicle which will last more than 3 years, long-term two-wheeler insurance should be your choice.

Benefits of Buying Long-Term Two-Wheeler Insurance:

The IRDAI has approved insurers to offer long-term bike insurance policies to customers in an effort to stop the menace of non-renewal in short-term insurance coverage. This also encourages you to buy the mandatory third-party insurance policy. As for the long-term policy, you can choose to buy the 3 or 5 years cover as compared to the regular policy of 1-year.

Below is the list of benefits of long-term bike insurance:

  1. Hassle-free process.

  2. Discounted premium.

  3. Higher NCB

  4. The policy does not expire before 3 years.

  5. Avoid issues of renewing the expired policy.

  6. Discount on Own Damage premium.

  7. Premium amount fixed for 3 years.

  8. NCB remains intact and will not drop in case of a lapse in renewal.

How to Choose the Right Bike Insurance Plan?

Both the long-term and short-term bike insurance policies have their advantages and disadvantages. While the long-term is cost-effective and hassle-free from annual renewal, short-term insurance policies provide more flexibility when you renew the policy every year. 

Hence, if convenience and cost-effectiveness make more sense to you, then the long-term two-wheeler insurance policy should be your choice. Or, if you want more flexibility and precise protection, then short-term bike insurance policy should be your choice.

FAQs About Long-Term and Short-Term Two-Wheeler Insurance Policy:

Below are some frequently asked questions about long-term and short-term bike insurance policy:

What is a comprehensive two-wheeler insurance policy?


A comprehensive bike insurance policy offers financial protection in case of any impact damage, fire, theft, earthquake, etc. Additionally, it covers against any third-party liability in case of bodily injuries, death, and third-party damage.

What are the different types of insurance policies?


There are two types of insurance policies for two-wheelers – comprehensive and third-party liability.

What are the types of long-term policies available for two-wheelers?


For brand new two-wheelers, you can choose from the below-mentioned options:Liability only policy for a term of 5 years: This type of policy is known as third-party insurance, which offers cover against any third-party liabilities such as death, bodily injuries causing disability, or third-party damage.Package Policy for a term of 5 years: This type of policy offers comprehensive cover to your two-wheeler due to any impact damage, theft, fire, earthquake, etc. Additionally, it offers cover against third-party liability.Bundled Policy for a term of 5 years: This type of policy offers cover Own Damage and 5-year third-party liability.For two-wheelers which are more than one-year-old, you can choose the Liability Policy or the Package Policy.

Is it mandatory to take the third-party liability insurance for two-wheelers?


Yes. As per the Motor Vehicle Act, all vehicles plying on Indian roads should be insured with the liability policy.

How to pay for a two-wheeler insurance policy online?


Paying your bike insurance amount online is hassle-free and easy to process. You can pay it online via net banking, credit card, debit card or you could use a mobile wallet.

What is NCB?


NCB or No Claim Bonus is a discount or incentive offered by your insurance company for driving carefully and not raising any claim during the policy period.

I have an existing bike insurance policy. Can I buy new bike insurance from a different insurance company?


Yes, you can buy a new insurance policy from a different insurer, if the expiry date of your existing policy is less than 60 days from today. The new insurance policy will be effective after the expiry of your existing policy.

What information should I provide while raising a claim?


You can register a claim either through the insurance company’s website or call their toll-free number to report the incident. While raising the claim, you need to provide your contact number or the bike registration number, details of the incident and photographs of the two-wheeler is possible, and FIR in case of theft, or any third-party loss.

How to find my bike insurance policy number?


Your bike insurance policy number on the policy document or if you have chosen an online insurance provider, you can log in to your account and find your bike insurance policy number.

How to renew two-wheeler insurance online after it expires?


Insurance companies offer a grace period after the expiry of the policy within which you need to renew your bike insurance policy easily; however, you cannot raise any claim during this grace period as the policy is considered inactive. The process to renew a lapsed bike insurance policy is:1. Review your policy and make changes if required at the time of the renewal.2. Log in to your insurance company’s website and enter information related to your bike and the previous insurance policy.3. Choose the type of two-wheeler insurance policy.4. Set the IDV (Insured Declared Value) and choose Add-ons as per your requirement.5. Make the payment.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.

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