Sign on the dotted line for your motorcycle insurance...
but for how long?
John Newman
India is a country among those with the highest density of motorcycle ownership on the planet. Mostly lightweights used as cheap transport, but among the middle classes motorcycling is becoming an increasingly favoured leisure activity. Mahindra motorcycles are among the front runners in Moto GP/Moto 3; their Bajaj corporation is the effective owner of KTM; and the Hero MotoCorp is now the world's largest two wheel manufacturer.
Now comes an initiative from India that may have implications for the way we all purchase insurance in future. A bike insurance policy that runs over a three year period.
It has been introduced by a government set up, the Insurance Regulatory and Development Body, and has largely been welcomed by the insurance companies who like the idea of tying customers in to a longer term policy for obvious financial and 'customer loyalty' reasons. This is also popular with insurance companies because many bike owners, especially in more rural areas, don't bother to renew their policy once the first year's insurance has expired following the purchase of a bike.
One insurance company official is quoted as saying that more than half the motorcycles on the roads are uninsured because their owners haven't renewed. So another win for insurance companies would be a reduction in administrative costs with no need to send out renewal notices and a saving in annual paper work.
What would be the advantages to riders if longer term insurance policies were introduced here?
* We could sign up and forget – presuming we don't lodge a claim during the period
* We might save money if there's an inflation or premium hike over the period that the cover runs – though we would expect that to be priced in.
A disadvantage could be that purchasing a longer term policy prevents us exercising consumer power and shopping around for cheaper quote. If we sign up long term the price would have to be right.
As companies are always looking to save labour time and money, this is one we should keep an eye on.
Do you have any thoughts on or experience of this? If so your comments would be very welcome. Email us on:
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