10 Factors Affecting Two Wheeler Insurance Premium

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Several factors determine the premium of your bike insurance policy. Check out the list of top 10 factors that affect your two-wheeler insurance premium:

  • Coverage: The level of coverage of your policy largely affects your premium amount. You will pay a lesser amount for third party liability plan as compared to a comprehensive plan that will provide wider coverage and hence, will attract a higher premium.
  • Insured Declared Value: The Insured Declared Value (IDV) is estimated by finding the market value of your vehicle. If the market value is lesser, so will be the IDV fixed by your insurer. As a result, you will end up paying a lower amount of premium.
  • Age of the Vehicle: The age of your bike is inversely proportional to its market value or IDV due to depreciation. Therefore, the higher the age of your vehicle, lesser will be the premium amount that you will be required to pay.
  • Make & Model of the Bike: Basic models attract a lower level of coverage leading to lower premiums. On the other hand, a high-end bike will require a wider range of coverage, thereby, attracting a higher amount of premium.
  • Installed Security Device: If you have installed security devices to enhance the safety of your vehicle, your insurer will offer you a lesser premium amount.
  • No Claim Bonus: No Claim Bonus or NCB enables you to receive a discount on your premium at the time of renewal if you have not made any claims. Thus, NCB reduces the premium that you are required to pay.
  • Geographic Location: The place where you will be riding your bike affects your premium as certain places, such as metropolitan cities, have higher risk exposure. The premium amount will increase as the level of risk exposure rises.
  • Age of the Insured: The age of the insured also determines the premium rate. Younger riders are believed to have higher risk exposure as compared to middle-aged riders. Hence, more the age of the insured, lesser will be the premium amount that you’ll have to pay.
  • Deductible: If you opt for the voluntary deductible, your insurer will offer you a discount on your premium reducing the overall amount to be paid.
  • Engine Cubic Capacity (CC): Engine CC is directly proportional to your premium rates. This means higher engine CC will make you pay a higher amount of premium.

How to Save on Bike Insurance Premium?

There are several ways through which you can save on your two-wheeler insurance premium without compromising on your policy coverage. Check them out below:

  • Claim your NCB: No Claim Bonus is rewarded for every claim-free year. You can utilise your NCB to avail discounts on your premium without reducing your coverage level.
  • Know Your Vehicle’s Age: It is important to be aware of the year of manufacture of your bike. This is because older motorcycles attract lower premium rates due to having a lower Insured Declared Value (IDV).
  • Install Safety Devices: You should consider safety devices that can enhance the safety of your bike. This is because your insurer will take cognizance of your installation and will offer a discount on your premium.
  • Choose the CC of Your Bike Wisely: Choosing the engine cubic capacity or CC of your vehicle is important because higher CC attracts a higher premium. Thus, you need to choose the engine CC wisely.
  • Opt for a Higher Voluntary Deductible: Deductibles decrease the insurer’s liability towards the claim amount as you pay a certain share of the amount from your own pocket. Therefore, if you opt for a high voluntary deductible, your insurer will acknowledge it by offering lower premium rates.

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