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Factors that Determine the Cost of Bike Insurance Policy

24 Sep 2021

Two Wheeler Insurance Article

The increasing number of two-wheelers on Indian roads has contributed to increased traffic on the streets, leading to a greater risk of accidents. To avert these risks, the Indian government has made it mandatory for all vehicle owners to buy insurance. As a bike owner, you must ensure you invest in an excellent bike insurance policy. But what factors decide bike insurance policy costs? Let us find out in this article.

Factors Affecting Two-Wheeler insurance Costs

  • Make and Model of the Bike

    A regular scooter or a geared two-wheeler would have a lower insurance premium than a high-end bike or a sports bike. The logic is simple; the higher the value of the various parts of a motorcycle, the higher is the insurance premium for such a bike.
  • Type of Coverage

    Bike insurance policies are primarily of two types – third-party insurance and comprehensive insurance. Third-party insurance covers damages only associated with a third-party involved in an accident. A comprehensive policy takes care of third-party and other incidents encompassing natural calamities and human actions like theft, burglaries etc. Since comprehensive policies offer more, the bike insurance policy costs of those policies are relatively higher.
  • Add-Ons

    Add-on covers are additional insurance features that you can add to your existing bike insurance policy costs. Examples include zero depreciation, engine protection, roadside assistance, etc. These add-ons give you more coverage than your standard insurance policy. The insurance for bike price increases with these add-ons.
  • Modifications

    While modifying the parts of your bike may enhance the looks of your bike, it results in a higher bike insurance policy cost to cover the costs of these parts. The more modifications you make to your vehicle, the more will your premium payout increase.
  • Anti-Theft Devices

    Installing anti-theft devices not only helps protect your bike from thefts but also reduces the risk for the insurance provider. The insurer rewards you for reducing their risk or liabilities by offering discounts on premiums and bike insurance renewal prices.
  • Geographical Location

    If you reside in metropolitan or urban cities, the cost of insurance will be higher than that of smaller towns or rural areas. Since the traffic density is higher in metros, it increases the bike's risk factors, which means you must pay higher insurance for bike price.
  • Insured Declared Value

    Your bike's value begins to depreciate as the bike gets older. Depreciation also affects the insured declared value of the motorcycle, which reduces with each passing year. You can, however, increase the IDV of the bike by paying a higher premium on the two-wheeler insurance cost at the time of renewal.
  • No-Claims Bonus

    No claim bonus or NCB is a discount (usually in percentage) offered by insurance companies to policyholders who do not file a claim in a given year. Your NCB discount increases with each subsequent claim-free year and is an excellent means to reduce two-wheeler insurance costs.

Cubic Capacity

Cubic capacity is the capacity of your bike to carry the weight of the passengers and luggage. The higher the cubic capacity, the higher would be the cost of premiums.

Final note:While the above factors may affect your bike insurance policy costs, it is worth noting that you can reduce your insurance premiums. For instance, you can install anti-theft devices, not file claims unless necessary and buy only the essential add-on riders. You can use a bike insurance premium calculator, an online tool, to calculate the insurance premium amount.

Disclaimer: For more details on risk factors, terms & conditions please read sales brochure carefully before concluding a sale. *The discount amount will vary subject to vehicle specification and place of registration.

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