Factors that Determine Your Bike Insurance Premium

What Factors Influence Your Bike Insurance Premium?

With more and more people purchasing two-wheelers in India, the possibility of road accidents has also increased, making two-wheeler insurance even more important. Besides, the Motor Vehicle Act of 1988 mandates insurance cover for all two-wheelers. To make it easy for customers, many insurance companies now offer two-wheeler insurance online. One of the primary factors people consider while purchasing insurance is the premium that comes with it. Here are some factors that determine your bike insurance premium:

  • Bike type and cost

Insurance premium varies based on the type of bike. Insurance companies particularly consider the cubic capacity (cc) of the vehicle’s engine while determining the bike insurance premium. A higher cc means a higher insurance premium. So, premiums of insurance policies covering high-end bikes are higher.

  • Coverage type

There are two main types of bike insurance policies: Third-party insurance, mandated by Indian laws, that covers damage or injuries to any third party involved in an accident, and comprehensive insurance that covers both own and third-party damage or injuries. The premium of a comprehensive bike insurance policy is typically higher because of the coverage it offers. While you can select either policy type, opting for a comprehensive one is better because of added benefits and coverage.

  • Rider particulars

Factors such as the policyholder’s age, riding history, geographical location and the like also influence the bike insurance premium. Insurers are likely to offer a low premium to a 30-year-old man with a riding experience of 10 years or more, compared to a 20-year-old individual because the risk associated with the latter is higher.

  • Bike modifications

While modifying your bike may amp up its performance and/or aesthetics, most modifications do not go well with the insurers. In the case of some aesthetic modifications, the bike’s improved visual appeal may increase its chances of getting stolen, so your insurer may increase the premium.

Insurers often declare a policy void if it undergoes a performance modification because altering the bike’s speed or handling aspects changes its optimum engineering aspects, putting you at risk.

  • Anti-theft devices

Security modifications such as installing an anti-theft device can decrease your premium because they reduce the risk of theft, lowering the insurer’s risk. Just as insurers charge you a higher premium for anything that increases the risk, they compensate you for anything that lowers the risk too.

  • Add-on covers

Add-ons offer extra coverage when you take a comprehensive insurance policy. They include zero depreciation, roadside assistance, and the like. The more add-on covers you take, the higher your premium will be. The best way to keep your premium under control but have adequate coverage is to choose only those add-on features that are of use to you.

  • No claim bonus (NCB)

When you renew your bike insurance policy after having a claim-free policy year, you are entitled to get a discount—no claim bonus—on your insurance premium. The NCB is 20% for the first claim-free year and can touch up to 50% for the fifth claim-free year.

  • Gap in renewal

A gap in renewing your insurance policy can lead to financial loss if an accident takes place. Insurers usually give a grace period of 30 days to renew your insurance policy. However, if you still fail to renew it, you will have to buy a new policy, which may have a higher premium because you are not eligible for an NCB.

Given how a bike insurance policy can offer you financial protection if you are involved in an accident, ensure you have a valid policy. Purchase bike insurance online if you haven’t already.