Every new two-wheeler sold in India since 1 September 2018 has come with 5-year third-party bike insurance paid upfront at purchase. On 4 August 2026, the Supreme Court extended that mandatory period to six years for new two-wheelers. Bikes already bought with a five-year policy are not affected. The change applies to new purchases, and the Insurance Regulatory and Development Authority of India (IRDAI) was directed to issue the necessary instructions to insurers immediately.

Third-party (TP) insurance is the cover that pays for death, injury or property damage caused to other people in an accident involving your bike. It is compulsory under Section 146 of the Motor Vehicles Act, 1988. What the long-term rule changed is how long the first TP policy on a new bike must run, and how the premium is paid.

What Is the 5-Year Mandatory TP Rule for New Two-Wheelers

The mandatory long-term two-wheeler insurance rule required that every new motorcycle or scooter be sold with a single TP policy covering five years, with the full five-year premium collected at the time of purchase. It applied only to new vehicles. Bikes bought before September 2018, and all renewals, continued on one-year TP policies.

The rule did not require five years of own-damage (OD) cover. OD cover is the part of a policy that pays for damage to your own bike from an accident, theft, fire or natural events. Buyers could choose how to handle OD separately, which is covered in a later section.

Why It Was Introduced (2018 Supreme Court Order Background)

The rule came out of S. Rajaseekaran v. Union of India, a road safety case in which the Supreme Court was examining why accident victims so often went uncompensated. A common reason was simple. Many two-wheeler owners bought insurance with a new bike and never renewed it, so when an accident happened years later, there was no insurer to pay the victim.

In its order dated 20 July 2018, the Supreme Court directed that new cars carry three years of TP cover and new two-wheelers five years, starting 1 September 2018. The General Insurance Council, the industry body for general insurers, sought more time to implement it, and the court declined that request on 31 August 2018.

Timeline of the Long-Term TP Rule

Current Status, Is It Still Mandatory in 2026

Yes, long-term TP cover is still mandatory for new two-wheelers in 2026, but the required term has changed. In National Insurance Co. Ltd. v. Thungala Dhana Laxmi (2026 INSC 793), a bench of Justices Sanjay Karol and Prashant Kumar Mishra directed on 4 August 2026 that third-party insurance for six years for new two-wheelers, and four years for new cars, be required to be purchased. The court asked IRDAI to issue the necessary directions immediately and listed the matter for compliance on 18 August 2026.

The court noted that nearly 56 per cent of vehicles on Indian roads, 16.54 crore out of 30.48 crore, were uninsured. It also directed a four-layer policy structure at the point of sale, with a mandatory TP-only base and three optional layers for pillion or occupant liability, personal accident cover and OD cover. Its other directions include linking number-plate cameras to insurance records for automatic e-challans and a pilot project linking fuel supply to valid insurance.

What This Means If You Already Own a Bike

• Bought between September 2018 and August 2026. Your five-year TP policy stays valid for its full term. Nothing needs to be changed or topped up.
• Five-year TP about to expire. Renew with a normal one-year TP or package policy. The six-year rule applies only to new vehicles.

• Buying a new bike now. Check that the policy schedule shows the TP term required at the date of purchase. Official six-year premium rates had not been published at the time of this update, so the dealer's quote should show the term and amount clearly.

   

How the 5-Year Premium Is Calculated Upfront

The TP premium is not set by insurers. The Ministry of Road Transport and Highways (MoRTH) notifies it, in consultation with IRDAI, and it is identical at every insurer. The rates in force are in the Motor Vehicles (Third Party Insurance Base Premium and Liability) Rules, 2022, G.S.R. 394(E), applicable from 1 June 2022. They include a separate five-year single premium for new two-wheelers.

GST is charged on top of these amounts. For a typical 110 cc commuter bike, the five-year TP premium is ₹3,851, about ₹281 or 7.9 per cent more than paying ₹714 a year for five years at today's rate. In return, the TP cost is fixed at purchase. If annual TP rates are revised during those five years, as has been under discussion, the long-term policyholder does not pay the increase.

IRDAI's 2018 circular also required insurers to collect the premium for the entire term at the time of sale but recognise it year by year, which is why the whole amount appears in the on-road price. The premium for the new six-year term will depend on the directions IRDAI and MoRTH issue, so no official figure is shown here.

Pairing 5-Year TP with Annual or Long-Term Own Damage Cover

TP cover protects other people. It pays nothing towards repairing your own bike or replacing it if stolen. That is why most new-bike buyers add OD cover, and the choice of OD term is where the real decision sits.

The 2020 IRDAI decision is the reason one-year OD became the norm. IRDAI withdrew mandatory long-term package policies from 1 August 2020, citing affordability and the lack of flexibility for policyholders to switch. Some insurers, such as ICICI Lombard, now list multi-year package options for new two-wheelers again, so check whether your insurer offers one before deciding.

The bigger benefit of annual OD is choice. Since September 2019, standalone OD cover can be bought from any insurer as long as a valid TP policy exists. So a rider whose TP runs with one insurer until 2030 can still move OD cover each year to whoever offers the better IDV, add-ons and claim service. IDV, the Insured Declared Value, is the maximum amount the insurer pays if the bike is stolen or written off. At OD renewal, two-wheeler insurance plans listed on Insure24 can be compared on IDV and add-ons as well as price.

What Happens to NCB Under a 5-Year TP-Only Policy

No-claim bonus (NCB) is a discount on the OD premium for every claim-free policy year. It applies only to OD cover. The TP premium is fixed by law and never gets an NCB discount.

This has two practical results.

• A TP-only policy earns no NCB. A rider who holds only the long-term TP policy and skips OD cover builds no NCB during those years, because there is no OD premium for it to discount.
• Annual OD earns NCB normally. A rider with long-term TP and one-year OD earns NCB on the OD portion at each claim-free renewal, on the standard scale below.

NCB belongs to the owner, not the bike, so it can be carried to a new vehicle when the old one is sold. It is usually lost if the OD policy is not renewed within 90 days of expiry, so a long gap without OD cover can reset the discount to zero.

Can You Cancel or Modify a 5-Year TP Policy Mid-Term

A long-term TP policy is harder to cancel than an ordinary one, because it is a legal requirement for the vehicle. Under IRDAI's master circular on general insurance issued on 11 June 2024, statutory motor TP cover cannot be cancelled except in two situations, double insurance or total loss of the vehicle.

Where cancellation is allowed, the 2024 master circular provides for a refund of premium for the unexpired period, and for multi-year policies a refund of premium for future years whose cover has not started, subject to the policy terms and no claim having been made.

Details on the policy can still be updated mid-term through an endorsement, which is a formal change to the policy document. Common endorsements include a change of address, a hypothecation update after a bike loan is paid off, and the change of ownership after a sale.

Note: This article has been vetted by Siddarth Khandelwal, an Insurance expert at Insure24.

Frequently Asked Questions

Q. Is 5-year third-party insurance still mandatory for new bikes?

The long-term rule still applies, but after the Supreme Court's order of 4 August 2026, new two-wheelers must carry six years of TP cover instead of five. Bikes bought earlier keep their five-year policy until it expires.

Q. Why was long-term bike insurance introduced?

The Supreme Court introduced it in 2018 because many two-wheeler owners did not renew insurance after the first year, leaving accident victims without compensation. A multi-year TP policy at purchase keeps new bikes insured for longer.

Q. Can a 5-year bike TP policy be cancelled?

Only in cases of double insurance or total loss of the vehicle, under IRDAI's 2024 master circular. Selling the bike transfers the policy to the buyer rather than cancelling it.

Q. Does the six-year rule apply to bikes already on the road?

No. The Supreme Court directed the six-year term for new two-wheelers. Existing five-year policies continue for their full term, and older bikes renew annually.

Q. How much does 5-year third-party insurance cost for a 150 cc bike?

Under the 2022 rates, a new two-wheeler between 75 cc and 150 cc pays ₹3,851 for five years of TP cover, plus GST. A bike between 150 cc and 350 cc pays ₹7,365.

Q. Is own-damage cover mandatory with long-term TP?

No. Only TP cover is compulsory. OD cover is optional, but without it, repairs after an accident and loss from theft are paid by the owner.

Q. Can own-damage cover be bought from a different insurer?

Yes. Since September 2019, standalone OD cover can be bought from any insurer, provided a valid TP policy is in place.

Q. Does NCB apply to the long-term TP premium?

No. NCB is a discount on OD premium only. The TP premium is fixed by law and stays the same regardless of claims.

Q. What happens to the TP policy when the bike is sold?

It transfers with the bike to the new owner under Section 157 of the Motor Vehicles Act. The new owner should get the policy endorsed in their name within 14 days of the transfer.