Knowledge Centre

How Different Variables Impact Your Motor Cycle Insurance Premium?

You must be wondering, how various bike models from one brand fetches different premiums? Basically, there isn’t one simple factor that plays the premium deciding game; there are several other factors that affect motor cycle insurance premium calculation. Let’s take a quick look and figure out how different variables play a crucial role in fixing up the premium for your bike or scooter.

Make and Model: Your bike’s make-model plays an important role in deciding the premium. High end bikes fetch higher premium as compared to the basic models. If you are riding a high-end motor bike then it definitely requires a widened insurance coverage, therefore higher the insurance premium.
For example: Royal Enfield would fetch a higher premium as compared to a Hero Splendor.

Age: Motor cycle insurance premium highly depends upon the age of the vehicle. A new vehicle has higher IDV (Insured declared value: IDV refers to the maximum value that an insurance company pays to the owner in case of total damage.) as compared to that of an old bike. Depreciation applies on your bike as it ages, resulting in price reduction.For eg: A Bike bought in the year 2019 will have a higher premium as compared to the same make-model bought in the year 2015.

Engine Capacity: Your bike’s engine capacity is actively involved in the process of premium fixation. Depending upon your engine’s cubic capacity your bike insurance premium functions. A bike 75 CC bike will fetch lower premiums as compared to a 220 cc bike. That’s why we ask you to tell us your bike’s engine chassis number and make-model-variant while calculating premium.

Location: Though this doesn’t affect the premium drastically, but in some cases insurer does not issue an insurance policy if your bike is registered under a rejected RTO. Any particular RTO, where the claim cases are high or prone to accidents will pull out a higher premium as compared to places where riders ride responsibly. For eg: Premium for a Royal Enfield Himalayan at Leh would be higher than that in Mumbai.

No Claim BonusNo claim bonus is the reward in the form of premium discounts given by your insurer to you for making no claims; it’s more like an appreciation for your good riding skills. This No claim bonus is a game changer for fixing your premium. Since, it acts as a discount your bike insurance premium gets lowered if you have a good no claim bonus percentage of your previous year’s policy.For eg: Kishore bought his new bike in the year 2018 and didn’t make any claim, at the time of renewal he got a 20% discount on his renewal premium, isn’t it amazing?

Add on covers: If you believe by the saying “You are never enough covered”, then buying an add on cover is a must. Bike insurance plans offer various add on cover such as emergency assistance programme for delivering that extra protection. Buying add on covers will definitely increase your premium, however it’s worth buying. Your bike remains unaffected due to depreciation over years and you get complete cover in case of total loss.

Type of policy: Your motor cycle insurance premium highly depends upon the type of policy your choose to buy. If you opt for third party mandatory insurance, then your premium would be less. However, it doesn’t really serve the purpose of protecting your own bike it just secures you from third party losses. To get a total cover, you need to choose comprehensive insurance cover to get your own damage covered as well. The premium for comprehensive cover is much higher as compared to third party cover, all due to its wide scope of coverage.

ModificationsWe all love drooling over modified bikes. It’s the exciting look and design that makes it a show stealer. However, if you choose to insure your modified bike you may have to pay additional premium. It is a high risk asset as any damage caused to modified parts will incur higher parts and repair cost. It is advisable to insure modified parts separately.

Claim History: When you file a claim with your insurance company for an accidental damage, theft or third party losses the insurance company notes it in the records and there are chances that your premium may increase in the coming years, as the company looks at you as a probable risk for future. This may also affect your premium calculations.

Type of Bike: If you are using your two-wheeler for commercial purpose like food delivery or courier services it will attract higher premiums. However, if you insure your personal bike it will comparatively fetch lower premiums. Depending upon the purpose of your two wheeler, your premium is fixed.

How to secure your bike or scooter with HDFC ERGO?

HDFC ERGO offers two wheeler insurance in a snap. It offers instant claim services and secures your vehicle without any inspection. Get upto 70% discount for scooter insurance and enjoy benefits. HDFC ERGO is a brand trusted by millions, be assured.

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


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