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

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

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Bike insurance policies work as protective layers for our vehicles. With suitable bike insurance plans for our two-wheelers, we get financial protection for our vehicles when our bike is damaged, stolen, etc. In addition, purchasing the insurance policy helps you deal with the damage repair costs during unprecedented events. In bike insurance, you get the option of either purchasing third-party bike insurance or a comprehensive plan.

When you purchase bike insurance, you will have to ensure that you renew the insurance plan to continue getting the coverage you need. The renewal of your two-wheeler insurance plan will ensure you maintain the policy active.

Many insurers like Tata AIG allow customers to carry out the renewal of the insurance for two-wheelers online. While renewing the plan may not be a hassle, choosing the tenure for your insurance plan may be a tough decision for you. Many individuals wonder whether they should opt for a short-term policy or a long-term policy for their two-wheelers.

What are Short-term and Long-term Bike Insurance Plans?

A short-term bike insurance plan is a bike insurance plan that is active for a short tenure, i.e., one year. A long term bike insurance plan is a bike insurance policy that offers you coverage for a long tenure, i.e., up to five years. While both insurance plans have their features and benefits, they may be suitable for different requirements. While a long-term policy may remove the hassle of renewing your policy annually, a short-term plan may help you update the plan as per your requirements.

Therefore, if you’re confused about choosing one of them, it would help to learn about the differences between the two types.

Differences Between Long-Term and Short-Term Bike Insurance

Listed below are some of the differences between both types of bike insurance policies:

Long-Term Bike Insurance Short-Term Bike Insurance
Policy renewal date For long-term policies, the renewal date is once every three or five years. Therefore, you will not have to worry about the renewal of  two-wheeler insurance for three or five years with a long-term policy. The renewal date for short-term policies is one year. Therefore, if you have purchased a short-term policy, you will have to renew the plan annually.
Adjustability You will have to rely on the coverage you have purchased for the plan’s tenure with a long-term bike insurance plan. Therefore, the adjustability for a short-term bike insurance plan is higher than a long-term bike insurance plan.


While the third-party bike insurance coverage will not change in your policy, you may wish to change the coverage for your vehicle. You can adjust the insurance for your 2-wheeler annually and benefit from the offers and discounts with a short-term plan.
Add-ons With long-term two wheeler insurance plans, you will have to wait three or five years to include the add-ons you wish to include in the plan. In short-term bike insurance plans, you can include the add-ons you need annually. This is because the renewal date for short-term plans is set annually.
Cost-effective A long-term two wheeler insurance plan is cost-effective since it avoids any increase in the annual premium that the IRDAI imposes. Along with this, most insurers provide offers or discounts on the premiums on long-term policies. The cost of short-term bike insurance plans is more likely to rise annually.
Own damage premium When you purchase long-term bike insurance with your insurer, you enjoy the benefits offered by your insurer as you build a long relationship with them. In addition, insurers provide certain discounts and offer to loyal customers. With short-term bike insurance, you may not get these perks.
NCB You can get up to 20% of the NCB discount on the first claim-free policy year with long-term bike insurance plans. The time frame for not raising claims is shorter in short-term bike insurance plans. Therefore, while you will still get a discount, it can be lower than long-term bike insurance plans.


While both types of bike insurance plans can have their features, a long-term bike insurance plan might be more suitable for you if you do not wish to renew your policy annually.

Benefits of Long-Term Bike Insurance Policies

Given below are some of the advantages of purchasing a long-term bike insurance plan:

  1. Stress-free method
  2. Premium discounts
  3. Higher discount through No-Claim Bonus (NCB)
  4. The policy stays active for a long tenure
  5. You do not have to deal with issues of an expired policy soon
  6. You get discounts on your own-damage premium
  7. The premium amount is fixed for three or five years
  8. The accumulated NCB stays intact in the event of a policy lapse

If you’re worried about purchasing a long-term policy and not having the flexibility to adjust it  annually, you can purchase a short-term plan initially. Then, once you have understood your insurance requirements after the first year, you can opt for a long-term plan with the coverage you need.


Both short-term insurance policies and long-term insurance policies have their drawbacks and benefits. While the long-term policy is cost-effective and stress-free, the short-term plan offers a higher level of flexibility when you renew the plan. Therefore, if you don’t want to worry about your policy renewal and want a cost-effective plan, you must opt for a long-term plan. If you wish to adjust your plan annually, you must opt for a short-term insurance plan.

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