Last Updated:October 24, 2025, 13:03 IST
GST cuts, repo rate relief and festival demand drove record Diwali auto sales.
News18
Motor Insurance: GST reforms, repo rate relief, positive sentiment and festival demand from Navratri to Diwali led to record sales in automobile vehicles. India’s leading automobile manufacturers have reported this as their best-ever Diwali season.
CS Vigneshwar, president of the Federation of Automobile Dealers Association (FADA), said the surge highlights strong consumer confidence, further boosted by the GST rate cuts announced on September 22.
With the rise of passenger vehicles (2-wheeler and 4-wheeler), the demand for motor insurance has also risen in recent times. One of the popular type of motor insurance plans is integrated 3+3 long-term policies in the private car segment.
What Is 3+3-year long-term motor insurance plans?
It is a bundled insurance plan for a car, where the customer purchases the mandatory a 3-year third party (TP) cover, along with a 3-year Own Damage (OD) cover.
For new cars, IRDAI has mandated a 3-year third-party (TP) policy. While the Own Damage (OD) cover is optional, it can be purchased either as a 1-year OD + 3-year TP bundled policy (1+3) or a comprehensive 3-year OD + 3-year TP package policy (3+3).
Buyers can opt for add-on covers (e.g., zero depreciation, engine protection, roadside assistance) for the full three-year duration, ensuring extended protection against various contingencies.
The reduction in GST on vehicles has significantly lowered the on-road price of new cars. This has made vehicle ownership more accessible and affordable for a wider range of buyers, Gaurav Arora – Chief Reinsurance, UW & Claims (Property & Casualty), ICICI Lombard.
However, the overall GST adjustments have led to lower vehicle prices for two-wheeler and private car buyers, says Bhatia.
“This reduction in upfront costs encourages customers to opt for longer-term, value-added policies with enhanced protection, thereby likely driving further growth in the adoption of long-term comprehensive policies,” he adds.
Why Do Long-Term Policies Better Than Annual Renewal Plans?
Long-term plans offer stability and security in comparison to annual renewals. Sunny Bhatia, Sr VP.- Retail, Turtlemint says they (long-term plans) offer premium stability, lower cumulative costs, and uninterrupted coverage.
“Customers avoid the risk of premium hikes due to aging vehicles or claims, and the extended tenure ensures peace of mind without yearly paperwork.
Additionally, it hedges against any regulatory changes that may occur during the policy period,” he adds.
Annual renewals increase the risk of unintentional gaps in coverage, especially due to delays or forgetfulness, argues Arora.
“Long-term policies also offer advantages such as cost efficiency and NCB protection—benefits that are not guaranteed with yearly renewals,” Arora adds.
Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
Varun Yadav
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More
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October 24, 2025, 13:02 IST
News business Buying A New Car? Why Long-Term Motor Insurance Beats Annual Renewal PlansDisclaimer: Comments reflect users’ views, not News18’s. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
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