Knowledge Centre

Factors That Influence Two Wheeler Insurance Premium

Nowadays, buying two-wheelers has become more of a necessity than a luxury. Having a bike or any other two-wheeler offers you the flexibility of travel, convenience, and availability of transport all the time. To protect your vehicle from unforeseen circumstances you need to have two-wheeler insurance. As per Motor Vehicle Act each vehicle owner has to have at least a third party policy and it is a mandate.

However, it does not cover any damage to your vehicle and it can be covered by buying a comprehensive policy. Therefore, it is always recommended to a comprehensive policy for your prized possession.

When you have good two wheeler insurance, you do not have to worry about the sudden expenses incurred because of unexpected events such as theft, accident, flood, and other natural and manmade disasters. When we buy two-wheeler insurance, most of us keep an eye on the insurance premium while comparing policies. Do you know two people who have the same vehicle might be paying different insurance premium?

There are several factors which affect the cost of vehicle insurance. It is advised to know about these factors before buying vehicle insurance. Below are some factors that influence two wheeler insurance premium.

Type of insurance coverage

Type of coverage is one of the major factors which affect the insurance premium. For two-wheeler insurance, either you can go with third-party insurance or comprehensive insurance. Third-party insurance is very basic and is mandatory as per law. The policy only covers any third party liability in terms of death or bodily injury or third party’s property and does not cover any damage to your vehicle.

On the other hand, comprehensive insurance is little expensive but it covers third party liability as well as damage or total loss of the insured vehicle because of manmade or natural mishaps. If you go with comprehensive insurance you will have to pay an extra premium for extra coverage.

Factors affecting premium

Manufacturing year of the vehicle, fuel type, model, cubic capacity of the engine, current valuation, , place of registration, etc. also affect the premium amount.

Add-on covers

Add-ons offer extra coverage which can be availed with comprehensive two-wheeler insurance. Add-ons protect you from the incidents which are not covered by your regular policy. But these add-ons are not free as you have to pay extra premium to take the benefits of add-ons.

There is a variety of add-ons available including zero depreciation cover, emergency assistance cover, etc. When you opt for an add-on there is a substantial increase in the premium amount, so only choose necessary covers depending upon your personal requirement.

Modification

Modifying your two-wheeler may improve its appearance or performance.However, insuring each modified part can increase the premium of the policy significantly. It is advised to insure every modified part separately because if any of the modified parts get damaged it can cause huge financial losses.

No claim bonus

No claim bonus (NCB) is a discount offered by insurance companies to reward the policyholder for not making any claim under the expiring policy.. NCB is a significant discount and one can even get up to 50% NCB discount on bike insurance. This discount is offered on own damage renewal premium.

Gap in policy renewal

It is important to renew your two-wheeler policy before it gets expired. If there is a gap in renewal you have to bear the financial loss of any mishap. Further, you may also lose your no claim bonus in case of a gap of more than 90 days in policy renewal.

It is important to choose the right coverage for your two-wheeler so that you can reduce your out of pocket expenses in case of any mishap.  Before buying a bike insurance policy do not forget to compare various policies to get the best plan at the best price.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales. This blog has been written by

S. Gopalakrishnan | Motor Insurance Expert | 40+ years of experience in insurance industry

A veteran in insurance industry. S. Gopalakrishnan is a name to reckon with in the field of reinsurance, he has headed the Reinsurance department and has rich experience in other fields of motor insurance. He loves to share his opinion on latest topics in the insurance industry and how he can help people in safeguarding their assets using insurance products.

S. Gopalakrishnan recommends "HDFC ERGO for your vehicle insurance needs, it has always put customer’s interest at the forefront, with round the clock assistance to deal with emergency breakdown issues and hassle free claims process. You can be assured of complete and reliable guidance through the whole process".


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