Two Wheeler Insurance

By Vikas Chandra Das
21 July 2022, 11:46 AM

When people buy a bike, they seldom consider or acknowledge the value of purchasing a two-wheeler insurance policy. However, you must know that a variety of factors are considered while calculating your insurance premium. This is the reason why two people pay different premiums for their insurance. One such factor is the cubic capacity of your bike. And, if you have third-party bike insurance, it's premium rates are regulated by IRDAI which are generally increased by 10%-20% annually.

## What is the Cubic Capacity of a Bike?

The cubic capacity of a bike's engine is the unit of measurement. Cubic Capacity usually ranges from 50cc to 1500cc. The engine capacity of a bike is crucial as it determines the amount of power it generates. The larger the chamber on a two-wheeler, the more strong it is considered to be. The capacity of a bike is interpreted in the same way as the engine capacity of a four-wheeler vehicle is measured in litres.

## How does the Cubic Capacity of Your Bike Affect Policy Premium?

In the process of premium fixation, your bike's engine power is actively involved. Your bike insurance premium is determined by the cubic capacity of your engine. As compared to a 220 cc bike, a 75 cc bike would fetch lower premiums. As a result, it is recommended that you take good care of your bike's engine to ensure that it runs smoothly.

The cubic capacity (cc) of your bike's engine has a direct effect on your insurance rate, so higher cc bikes would cost more to insure. The IRDAI mostly takes into consideration the cc of your bike for calculating the third-party insurance premium. For example in FY 2019-20, the third-party premium insurance rates were INR 482 for bikes(with less than 75cc). And, INR 752 for bikes between 75cc and 1500cc. That's why, when determining premiums, insurance firms ask for your bike's engine chassis number and make, model, and variant.

Two friends Mr. Rajesh and Mr. Abhinav decided to purchase new bikes for themselves together. While Mr. Rajesh wanted the latest Suzuki Hayabusa model (1340 cc), Mr. Abhinav decided to go with a Bajaj Pulsar (124.45 cc). In order to keep their new two wheelers insured against uncertainties, they decided to purchase comprehensive two wheeler insurance plans for their bikes. Both of them decided to get insurance from HDFC General Insurance.

However, they saw that their premium amounts were different. Mr. Rajesh’s premium amount for his Hayabusa was more than Mr. Abhinav’s. So, Mr. Rajesh decided to consult the Customer Team of HDFC General Insurance regarding this. The support team informed him that it was due to the difference in the cubic capacities of their bikes. The Hayabusa features a bulkier engineer than a pulsar’s and therefore, warranted a higher premium amount.

Any insurance policy you purchase has a cost, which is referred to as the premium. Simply put, a premium is the rate you pay to your insurer in exchange for coverage and benefits under your contract. The insurer determines your premium after a variety of factors are taken into account.

Here are a few easy tips to save money on two-wheeler insurance premium:

1. Purchase Insurance Policies From A Single Company - Buying all of your insurance plans from the same company will help you save money on premiums. You can consolidate all of your insurance policies—motor, house, health, and so on with one bike insurance company and save money on your overall premium.
2. No Claim Bonus - It's crucial to keep in mind discounts like the No Claim Bonus, which will enable you to save more on your insurance policy. If no claims have been filed during the policy period, the NCB applies to a discount offered at the time of renewal. It is cumulative in nature, ensuring that it grows over time, and as a result, it is extremely beneficial in terms of long-term savings on your insurance policy.
3. Higher Deductibles Are A Better Option - By increasing the amount you pay as a deductible, you will significantly reduce your bike insurance premium. A deductible is the sum that an individual must pay in the case of a loss. Decide how much you can afford to pay out of your own pocket and then choose the acceptable deductible.
4. Anti-theft Devices - Installing anti-theft devices from reliable manufacturers on your vehicle is another way of saving money. These will persuade the insurance provider that you are a lower risk and the risk of fraud will be significantly reduced, and you will be given a lower premium.
5. Clean Driving Record - Insurance firms can charge you a premium depending on the perceived danger you face. If you have a clear driving record, you would be seen as posing a lower risk of filing a claim and, as a result, posing a lower risk of putting the insurance company in financial jeopardy. As a result, you'll pay a lower premium. It is one of the simplest ways to guarantee a low premium and save money on your insurance policy.
6. Comparison Of Insurance Policy Online - Finally, it is critical to compare insurance plans online to ensure that you have reviewed the advantages and disadvantages of all policies available to you. You should consider the various coverages and premiums available and choose the one that best suits your needs and expectations.

#### Conclusion

Any bike on the road is required to have third-party bike insurance. So, when buying a bike, besides considering the bike's features, you should also think about purchasing a bike insurance. Be certain to look around for the right insurance coverage for your needs and requirements. You could save up on your insurance premiums while maintaining enough coverage if you use the suggestions above and reduce the two-wheeler insurance premiums.

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