The Motor Vehicles Act of 1988 makes it mandatory to have insurance for all two-wheelers registered in the country. Having an insurance cover for your bike or scooter is the best way to ensure any damages, injuries, or liabilities are taken care of.
Two types of bike insurance
plans are available for two-wheelers - third-party and comprehensive plans. A third-party policy is also known as a liability-only policy since it only covers against the liabilities due to the third person. On the other hand, a comprehensive policy extends its cover to include own-damages as well. Since third-party policies have limited coverage, they have the lowest insurance rates for bike when compared to its counterpart. However, your insurance purchase should not depend only on the price. While the price is an important factor, it shouldn’t dictate the coverage that you buy.
Two-wheeler insurance rate is determined based on which factors?
Two-wheeler insurance rate is also known as the premium of the policy. A premium is based on a multitude of factors. These include:
- Deductibles: Deductible of your policy is one of the key elements that determine the bike insurance rate. It is the out-of-pocket expense that you, the policyholder, are required to pay at the time of claim. There are two parts to it – compulsory deductible and voluntary deductible.
- Model and make of the vehicle: Another important factor based on which the two-wheeler insurance rate is determined is the model of your bike and its manufacturing year. Every bike or scooter has a different premium based on these factors. Thus, when buying a two-wheeler, consider not just its purchase price but an annual expenditure for insurance premiums.
- Coverage opted for: The amount of insurance cover directly impacts the two-wheeler insurance rate. Higher the cover, higher is its insurance premium. Thus, try to balance between the insurance cover and the premium of your policy.
- No-claim bonus: No-claim bonus or NCB is the concession in renewal premium offered by the insurance company for not making any claims during the previous policy tenure. This bonus starts at 20% and goes all the way up to 50% for every claim-free policy year. Note that the NCB benefit is available only on the own-damage component of a comprehensive policy.
- The cubic capacity of your vehicle: Your bike’s engine capacity has an impact on the two wheeler insurance rate. So, as you go higher up to the litre-class segment, it is going to increase your insurance premium.
Apart from the above, factors like security devices installed, condition of your two wheeler and more impact the bike insurance rate.
How can you reduce the bike insurance rate of your policy?
#1 Purchase only necessary add-ons:
While add-ons are essential to enhance the coverage of your bike, it is essential you purchase only the ones that are useful. Sometimes, buying unnecessary add-ons can not only impact the two wheeler insurance rate, but also provide no additional benefits.
#2 Select a suitable ride:
As discussed above, buying a higher capacity motorbike impacts your premium. Keep this in mind and select a bike that checks all the right boxes. For city commutes, buying a sports bike is not only expensive, but also higher on its maintenance cost.
#3 Avoid making unnecessary claims:
Making an insurance claim for a small amount impacts the no-claim bonus, which further impacts the two wheeler insurance rate at renewal. Avoiding unnecessary claims helps to preserve the no claim bonus thereby keeping your premiums well under your budget.
#4 Do not miss renewals:
Missed two wheeler insurance renewal
impacts the premiums too. Having a continued policy coverage ensures renewal benefits are periodically passed by the insurance company to you.
#5 Avoid unwarranted modifications:
Modified bikes require you to inform the registration certificate as well as your insurer. Some modifications that increase the insurer’s risk have an impact on your bike insurance rate. Thus, when making modification, make sure it does not impact the premium in the long run.
When trying to select a suitable insurance plan, do not opt for the one with the lowest insurance rates for bike. Take into consideration multiple factors as mentioned above and balance the coverage and its price.