8 Factors That Decide Your Two-Wheeler Insurance Premium

With more and more people now purchasing two-wheelers for their daily travels, Indian roads are only expected to get more crowded in the future. As the traffic will increase, so will the number of two-wheeler accidents. Especially, given the poor condition of Indian roads and the fact that many Indians often neglect traffic laws. 

This makes motor insurance a must-have for all two-wheeler owners. In case of an accident, the insurance will protect you from the financial liabilities arising from the accident. While 3rd party bike insurance is mandatory, you can also go ahead and purchase a comprehensive policy that covers 3rd party as well as own damages/injuries. 

But before you start browsing insurance policies online, you should first understand how the premium of bike insurance is calculated. Here are the factors an insurer takes into consideration before providing you with an insurance quote-

1. Type of Coverage

As mentioned above, there are two different types of motor insurance policies available in India- third party and comprehensive. Third-party insurance is mandatory by law, but it only covers damages/injuries of the third party involved in an accident. A comprehensive policy, on the other hand, covers third-party as well as own damages/injuries.

As comprehensive policies offer more coverage, their premiums are higher than two-wheeler third-party insurance premiums. While you can select any one of the two, you should prefer going with a comprehensive policy for the added coverage and benefits it offers. 

2. Bike Type and Price

Just like the price of each two-wheeler is different, so is their insurance premiums. The cubic capacity (cc) of the vehicle is one of the factors that insurance companies consider for calculating insurance premiums. Higher the engine capacity, the higher will be the insurance premium. 

There are many high-end bikes available in the Indian markets. As compared to any standard bike, the high-end bikes have higher premiums.

3. Bike Modifications

A lot of riders consider modifications to improve the looks and performance of their bikes. If you have done the same, your insurance premium will increase if you want to cover your modifications and accessories.

4. Particulars of the Rider

Factors like your age, riding history, gender, etc. are considered for calculating the two-wheeler insurance premium. For instance, if you are a 30-year-old male with a riding experience of more than a decade, you will be paying a lower premium as compared to someone who is 20-year-old.

In the latter case, the risk factor is higher for the insurance company, and therefore they charge a higher premium to cover the risk.   

5. Add-on Covers

Add-on covers are highly recommended for your bike. There are different types of add-on covers, such as zero depreciation, NCB protection, roadside assistance, and more.

This add-on covers slightly increase the premium to offer added coverage and benefits. So, if you have opted for these extra covers, it will result in higher premiums. 

6. Anti-Theft Devices

Security features like anti-theft devices reduce the chances of your two-wheeler theft. This helps in reducing the risk for the insurance provider. Just like how the insurers compensate for higher risk by charging a higher premium, the lower risk is rewarded with a lower premium.

So, if you do have such security devices installed on your bike, it can help in reducing your insurance premium. 

7. Voluntary Excess

There is compulsory excess, and then there is voluntary excess available in two-wheeler insurance. Compulsory excess requires you to pay a certain percentage of the repair cost from your own pocket while the insurer pays the rest. Compulsory excess is fixed and cannot be increased or decreased.

Similarly, there is also voluntary excess, which you can adjust at the time of purchasing bike insurance. You can go for a higher voluntary excess for lowering the insurance premium. But higher excess will require you to pay more money from your pocket if your bike is damaged. 

8. No Claim Bonus (NCB)

If you are renewing your bike insurance and have not filed any claim in the past year, you are entitled to receive a discount on the insurance premium. This is known as NCB or No Claim Bonus. 

It is 20% in the first claim-free year and can reach up to 50% in the fifth claim-free year. If you do have NCB, you can use it to reduce your bike insurance premium considerably.

Purchasing Bike Insurance Online

Many of the top insurers in India now let you purchase two-wheeler insurance online. Now that you know the factors that affect insurance premiums, you can effectively make two-wheeler insurance premium comparison online and select a policy that offers the best value for your money. 

Do read the policy documents before making any payments so that you are fully aware of the benefits, inclusions, and exclusions of the selected policy.