Two-wheeler insurance policies are a legal necessity in India, where every two-wheeler must have a valid insurance policy. As a result, every bike owner in the country purchases a two-wheeler insurance policy. Many of you question how the premium for the bike insurance policy is determined and whether you can lower the premium outlay when purchasing the coverage. The cost of two-wheeler insurance is determined by a variety of factors.
If you grasp these criteria, you will be able to understand the premium paid by the insurance provider and possibly reduce the premium amount. When you acquire online two-wheeler insurance policies, you can use two bike insurance premium calculators. These two-wheeler insurance premium calculators assist you in calculating your policy’s premium. However, if you want to know the aspects that influence premium calculation, here are 12 factors to consider –
- Type of Policy Selected
In the market, there are two sorts of 2 wheeler insurance policy coverage. The first is an obligatory third-party policy, and the second is a complete policy. Because of the limited coverage provided by these plans, third-party premiums are cheaper than comprehensive premiums.
- Engine Capacity Of The Bike
The third-party premium is determined by the engine capacity of your motorcycle. If the engine capacity is high, the premium will be high as well, and vice versa.
- Make, Model and Variant of the Bike
Bike insurance calculators calculate your rate based on the make, model, and version of your bike. The cost of the bike is determined by the manufacturer, and the cost of the premium is determined by the value of the insurance policy. The bigger the premium, the more expensive the bike, and vice versa.
- Age of The Bike
The premium is also affected by the age of the bike. A comprehensive policy’s Insured Declared Worth is the value of the bike after deducting age-based depreciation. If the bike is older, the depreciation will be greater, lowering both the IDV and the premium. As a result, premiums for newer bikes are greater than for older ones.
- Registration Location
The premium rate is also affected by the city in which the bike is registered. As a result, bike insurance estimates require the bike’s registration location. Metro cities and urban areas have slightly higher premiums.
- Add-ons Selected With The Plan
Bike insurance packages allow you to purchase extra coverage benefits known as add-on covers. You can choose as many add-ons as you want, but each one comes with a cost. If an add-on is chosen, the policy’s premium will rise as a result.
- No Claims Discount
You are eligible for a no-claim discount if you are renewing your bike insurance policy and have not made a claim in the previous policy year(s). NCB allows for a reduction in the renewal premium. It starts at 20% and can rise to 50% if no claims are filed for five years in a row. As a result, the appropriate no-claim discount lowers your bike’s insurance price.
- Other Discounts
Other reductions are available in bike insurance packages as well. These include savings for installing safety gear on your bike, selecting a voluntary deductible, becoming a member of a recognised automotive group, and so on. These discounts also help to reduce the cost of a two-wheeler insurance policy.
- Accessories Fitted
If the bike is modified in any manner, or if extra electrical or non-electrical accessories are installed, the value of these accessories must be incorporated into the two-wheeler insurance premium calculator. The addition of accessories raises the coverage premium because it raises the worth of the bike.
- Mode of Policy Purchase
If the bike is modified in any manner, or if extra electrical or non-electrical accessories are installed, the value of these accessories must be incorporated into the two-wheeler insurance premium calculator. The addition of accessories raises the coverage premium because it raises the worth of the bike.
- Anti-Theft Devices
Anti-theft gadgets, for example, lower the likelihood of your two-wheeler being stolen. This reduces the danger for the insurance company. Reduced risk is rewarded with a lower premium, similar to how insurers compensate for increased risk by charging a higher premium.
If you have such security gadgets placed on your bike, you may be able to lower your insurance cost.
- Declared Value (Insured) (IDV)
The Insured Declared Value represents the bike’s current market price. The IDV of a motorcycle is computed once a year because the motorcycle’s value reduces over time due to depreciation.
The IDV is considered into the premium calculation since the bike insurance providers are only responsible for paying compensation up to the value of the bike.
The Insured Declared Value is the current market value of the bike. The IDV of a motorcycle is calculated once a year because the value of the motorcycle decreases over time owing to depreciation. Because the bike insurance provider is merely liable for paying compensation up to the worth of the bike, the IDV is factored into the premium calculation.
