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Ways to reduce your Two Wheeler Insurance Premium

This blog has been published on June 19, 2020, EST READ TIME: 5 minutes

What is two-wheeler insurance?

Two-wheeler insurance is an agreement between an insurance provider and an individual where the insurance provider commits to compensate any damages or losses incurred by the two-wheeler during an unfortunate accident. Two-wheeler insurance is an ideal solution for meeting the high expenses which can be incurred in case of damage to the vehicle during an accident.

The concept of two-wheeler insurance was introduced in India by the Motor Vehicles Act, 1988 and the two-wheeler insurance products in India are regulated by IRDAI (Insurance Regulatory Development Authority of India).

There are mainly two types of two-wheeler insurance policies in India.

  • Third-party liability insurance policy
    The third-party liability insurance policy is mandatory for two-wheelers in India. It helps in providing coverage against claims incurred due to damages caused to third party vehicle or bodily injuries caused to third party person because of an accident.

  • Comprehensive two-wheeler insurance policy
    The comprehensive two-wheeler insurance policy covers the expenses incurred due to the damages caused to the insured vehicle in an accident, theft or other natural calamities as well.

Importance of two-wheeler insurance

  • Two-wheeler insurance will help in providing financial coverage against damages or losses caused to the insured vehicle due to natural calamities like flood, storm, hurricane, or due to manmade calamities like riots, theft, burglary, or other malicious activities.

  • Two-wheeler insurance provides financial cover against damage to third party vehicles or injuries to third party persons.

  • Two-wheeler insurance policies offer personal accident coverage which extends up to Rs. 1 lakh in case of any damages caused to the insured vehicle due to an accident.

  • Third-party liability insurance cover is mandatory in India and so, carrying a valid insurance policy while riding two-wheelers will protect you legally against any fines or penalties.

  • You will be able to avail various benefits and discounts like No Claim Bonus, Cumulative Bonus, etc.

Ways to reduce two-wheeler insurance premium

You can be eligible to avail the benefits of two-wheeler insurance only when the insurance premium has been paid for a certain period. However, there are certain tips or steps with which the two-wheeler insurance premium can be reduced.

  • Multi-year insurance policy
    If you are selecting a multi-year policy such as for 3 years, then you might be able to avail certain concessions or percentage of discount and would also be able to overcome hassles associated with policy renewal.

  • Avoid making minor claims
    You should try avoiding petty claims throughout the year; failing which you can lose the benefits of NCB (No Claim Bonus). By an NCB, the premium reduces by around 50% depending upon the number of claim-free years.

  • Selection of vehicle
    Your vehicle determines your insurance premium. If you have a sports bike or an advanced bike, then the premium would be high as the maintenance cost, engine displacement, and power will all be high. So, you must select your vehicle wisely according to your requirements.

  • Selection of add-ons
    With every add-on cover that you are selecting, your insurance premium would be increasing. You must select those add-on covers which are necessary rather than selecting anything randomly.

  • Anti-theft device
    If you are installing an anti-theft device in your two-wheeler, then the probabilities of your vehicle being stolen reduce. The insurance provider would reduce your premium by considering this factor.

  • Selection of a higher deductible
    When there is a loss or damage to a two-wheeler, the entire cost is not paid off by the insurance provider. A percentage of the expense is paid off by you as well and this percentage is known as the deductible. If you choose a higher deductible, you will have to pay a low premium for the insurance policy.

  • Comparison
    This is the best way to purchase a good two-wheeler insurance policy. You should compare various insurance policies online by using insurance aggregators and select the ones which provide adequate coverage at a nominal premium.

Conclusion

Hence, it will always be economical if you are paying fewer premiums for your two-wheeler insurance. However, you should never compromise on the cover for fewer premiums. Always choose your insurance policy wisely.

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.

Mr.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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