What Factors Affect Your Two-Wheeler Insurance Premium?

While insuring your two-wheeler, several factors are involved in calculating your payable premium amount. Insurance companies consider these factors to evaluate risk and decide on your insurance premium. Knowing them will enable you to make wise decisions and reduce your insurance expenditure. 

In addition, you can also use the bike insurance premium calculator to calculate the monthly premium you have to pay for insurance coverage. 

Here’s more on the most important factors determining your two-wheeler insurance premium!

Top 10 Factors Affecting the Insurance Premium of Your Two-Wheeler Vehicle

Here are the 10 essential factors that influence the premium amount of your bike:

• Make and Model of the Bike

Another crucial factor in determining the premium of your bike is the make, model, and value of the vehicle. If the market value of your two-wheeler is high, you need to pay a higher premium. Expensive sports bikes or high-end models usually have higher premiums due to the potential cost of repairs and replacements. Vehicles with higher engine capacity also attract a higher premium.

• Type of Coverage

Your chosen policy type greatly influences your bike insurance premium. Insurance companies mainly offer two types of bike insurance policies: third-party and comprehensive insurance. Third-party two-wheeler insurance only provides coverage against third-party liabilities, i.e., the damages caused by your vehicle to another vehicle or person. 

However, the comprehensive policy offers extensive coverage for the bike owner and third parties. So, third-party insurance policies are affordable compared to comprehensive ones. When you buy a comprehensive insurance policy, you must pay a higher premium than a third-party bike insurance policy.

• Age of the Bike

Another crucial factor that affects the premium amount of your two-wheeler insurance is the age of your bike. The price of an old bike depreciates with time, reducing the IDV and premium. However, you may need to pay a higher premium if you purchase new models. 

This is because new models are more likely to be stolen, replacement and repair costs for spare parts are high, and so on. You can easily calculate the premium amount using the bike insurance calculator on your insurer’s website.

• Driving History and Experience of the Rider

A rider’s profile also affects the premium amount of two-wheeler insurance. Younger riders with less experience may need to pay a higher premium as insurance companies consider them risky customers. On the other hand, experienced riders who have a proven track record can buy insurance at lower premiums.

If a bike owner has a record of traffic violations, accidents, or insurance claims, they may need to pay a higher premium for their two-wheeler insurance. Insurance companies trust individuals with clean driving records as responsible riders, allowing them to pay a lower premium. 

• Location

Bike owners in metro cities or urban locations need to pay a higher premium for their two-wheeler insurance than those in rural areas. This is because the traffic in cities is higher than in towns and villages, leading to an increased risk of accidents. 

• Modifications

You may modify your two-wheeler to upgrade its looks and performance, which can increase the premium for bike insurance. This is because your insurance policy will cover the repair and replacement costs of the modified parts. An increase in the coverage amount means a higher premium.

• Add-On Covers

Add-ons are the additional coverage and benefits you can purchase separately with your comprehensive bike insurance policy. There are several add-ons like roadside assistance, zero-depreciation cover, consumable cover, etc. 

Adding these benefits will also increase your premium. Determining the premium amount beforehand using a two-wheeler insurance premium calculator can help you make informed decisions while buying add-ons.

• Insured Declared Value (IDV)

IDV or insured declared value is the maximum amount your insurer will pay when the bike is damaged beyond repair. It is determined by the bike’s age, make, model, condition, etc.. The higher the IDV, the higher the insurance premium one must pay.

• Anti-Theft Devices

Installing anti-theft devices in your two-wheeler can lower your insurance premium. These devices reduce the risk of your bike getting stolen, which ensures your vehicle’s safety. High security means lower coverage and, eventually, minimal premiums.

• No Claim Bonus (NCB)

NCB or no claim bonus is the discount offered to policyholders when they maintain a claim-free year. Policyholders can avail of this discount on their premium at the time of renewal. NCB can accumulate over the years, with the discount increasing to a maximum of 50% after five claim-free years.

These factors help assess your risk profile and make informed decisions to optimise your two-wheeler insurance premium. You can use the bike insurance premium calculator to determine the premium before purchasing a policy. Consider the coverage you need, maintain a clean driving record, install anti-theft devices, and utilise the No Claim Bonus to lower your insurance costs.