Just like your decision to buy a bike, getting a two-wheeler insurance policy is also influenced by a number of variables. The insurance provider takes into account a variety of parameters to calculate the cost of your bike insurance policy in order to assess risk. Hence, it is important for you to be aware of the factors that affect the premium in order to comprehend why your insurance policy costs the price it does. To receive the greatest bargain, you must also understand how insurance firms figure premiums.
Factors Influencing Two-wheeler Insurance Policy
1. The Type of Insurance Policy
Bike owners can choose between a third-party bike insurance plan or a comprehensive bike insurance plan when it comes to a two-wheeler insurance policy. The Insurance Regulatory and Development Authority of India (IRDAI) determines the third-party insurance premium level, and the insurer determines the comprehensive plan. Third-party bike insurance is less expensive than comprehensive insurance. However, if we talk about a comprehensive policy, it includes both own damage (OD) and third-party responsibility liability. A long-term insurance plan is also less expensive to purchase than an annual insurance plan.
2. Make and Model
A bike's model and the year of manufacturing are two apparent elements that affect the premium price. It will be lower if you buy a basic bike model than it will be if you own a premium or sports bike. In addition, the age of the bike is taken into account while determining the amount. Because of this, while buying two-wheeler insurance online or offline, you must provide the year that your bike was manufactured. Always remember that a new bike will cost you more, whereas an older or used bike will cost you less overall.
3. Maximum Engine Power
The size of your bike's engine is a significant factor that affects the cost of your two-wheeler insurance premium. It is believed that you would pay a smaller premium if your bike's engine is less than 75 CC (cubic capacity). The charge will automatically increase if your bike's engine capacity is greater than 350 CC, though.
Take a look at the slabs below for different cubic capacities:
|Engine Capacity (cc)||Third-party Insurance Price (in INR)|
|Less than 75cc||482|
|Exceeding 75cc but less than 150cc||752|
|Exceeding 150cc but less than 350cc||1,366|
4. If You Customise Your Bike
Bikers frequently love to customise their vehicles to improve both their look and performance. But are they aware that even one change raises the cost of the premium? Your insurance premium may increase if you change or embellish your two-wheel companion. You need to pay a higher premium for your bike for each additional or changed component.
In insurance policies, the term Insured Declared Value (IDV) refers to the maximum payout that your insurance has promised to make in the event of your bike being lost or stolen. The IDV is determined on the basis of the estimation of depreciation throughout each year. The value of your bike decreases annually, which has an impact on the IDV, which also is a key factor in determining your insurance rate.
6. No Claim Bonus (NCB)
No Claim Bonus (NCB) is a discount given to the policyholder by the insurance company in the form of a bonus for not filing any claims throughout the policy period. This discount is given as a reward for riding safely and avoiding filing damage bike insurance claims. For five years in a row with no claims, you can collect a reduction on the premium of up to 50%! Hence can expect a lower premium for your bike.
7. Coverage by Add-ons
Add-on coverage is additional insurance provided to supplement your standard, comprehensive two-wheeler insurance. The cost of an additional premium can be used to acquire these coverings. You may purchase a number of bike insurance add-on covers, such as those for consumables, zero depreciation, NCB protection, road assistance, and consumables to enhance the protection of your vehicle.Moreover, the addition of these covers will ultimately lead to premium hike.
8. Rider’s Past Records
Your insurance provider will also take into account additional elements when calculating your rate, such as your age, riding history, and prior accidents. For instance, young riders in the 20–25 age range who have less than a year of driving experience may be subject to a higher premium than middle-aged and experienced drivers.
9. Installation of Anti-theft Equipment
The cost of the insurance premium will be reduced by installing an anti-theft lock, GPS, or anti-theft equipment that has been approved by the Automotive Research Association of India (ARAI). As a result, the risk will be lower due to a decreased likelihood of theft, which will eventually result in a cheaper premium.
10. The Voluntary Deductables
Two different deductible types are offered by two-wheeler insurance policies. Mandatory deductibles are unchangeable and cannot be raised or lowered. In this scenario, you are responsible for a certain percentage of the repair costs out of your own money, with your insurance covering the rest of the cost.
Conversely, optional deductibles is the variable amount you may change while getting a two-wheeler insurance coverage. Your premium cost may be cheaper if you decide to select larger voluntary deductibles. But raising your optional deductibles means you'll have to pay more out of pocket if the bike is destroyed.
11. Fail in Policy Renewal
Your two-wheeler policy has to be renewed before it expires. If there is a gap in renewal, or you allow it to lapse, then you are responsible for any associated financial loss. Additionally, if your insurance isn't renewed for more than 90 days, you risk losing your no-claims bonus. In addition to this, a lapsed bike insurance policy will increase the premium cost of your fresh policy.
12. Your Location
The place of your residence or rather RTO registration of your vehicle also impacts the sum of your bike premium. People who live in metropolitan cities have to pay higher premiums as compared to individuals living in tier-2 or tier-3 cities. Reason being, due to congested areas and dense population, the chances of accidental damages are high. Also, insurers have categorised cities of India as Zone-A and Zone-B cities. Hence, their premiums vary accordingly.
As you have seen above, there are multiple factors that affect your bike insurance policy. Selecting the appropriate coverage for your two-wheeler is crucial if you want to lower your out-of-pocket costs in the event of an accident. Don't forget to research several policies before purchasing a bike insurance policy to find the best deal.
The easiest method to make sure you receive the greatest bargain and the most coverage without breaking the bank when it comes to premium payments is to compare the available plans and carefully read the small print for any hidden fees.
When purchasing a two-wheeler insurance policy, keep the aforementioned elements in mind to reduce your premium cost and obtain the highest level of protection.
Read more - 5 Benefits of Two Wheeler Insurance Policy