Top Factors That Decide Your Two-Wheeler Insurance Premium

What Could Hike Your Two-Wheeler Insurance Premium?

The two-wheeler industry in India has grown rapidly. In the absence of public transport during the pandemic, a greater number of people are now purchasing two-wheelers. Indian roads are expected to get flooded with these vehicles in future. According to a recent  report, domestic two-wheeler sales are likely to grow by 6-8% over the next five years as the economy comes out of the covid-19 induced downturn.

As the traffic will increase, so will the number of two-wheeler accidents. Especially, given the poor condition of Indian roads and the fact that many Indians often ignore traffic laws and safety measures. More than a third (37%) of those killed in road accidents in 2019 were two-wheeler riders, noted a Ministry of Road Transport and Highways’ report published in October, 2020.

Hence given the situation, motor insurance is a must-have for all two-wheeler owners. In case of an accident, the insurance policy will protect you from the financial liabilities arising from the accident. However, before you start browsing insurance policies online, you should first understand how the premium is calculated.

The following paragraphs will explain factors affecting two-wheeler insurance premium quote:

1. Type of coverage

In India there are two different types of motor insurance policies available - third party and comprehensive. Third-party insurance is mandatory by law, but it only covers damages/injuries to the third party involved in an accident. A comprehensive policy, on the other hand, covers third-party liabilities as well as own damages/injuries.

Since comprehensive two-wheeler insurance offer more coverage, their premiums are higher than third-party insurance premiums. While you can select any one of the two, you should preferably opt for a comprehensive policy for the added coverage and benefits it offers.

2. Add-on covers

Add-on covers are usually recommended for two-wheelers. There are different types of add-ons available with two-wheeler insurance plans, such as zero depreciation, roadside assistance, high-end electrical and non-electrical accessories. All of these come at an extra premium.

4. No Claim Bonus (NCB)

No Claim Bonus is a discount that is offered to you for every claim-free year.  If you are renewing your bike insurance and have not filed any claim in the past year, you are entitled to a discount on the insurance premium. In this way the insurance company rewards you for being a responsible rider.

NCB is usually 20% in the first claim-free year and can reach up to 50% in the fifth claim-free year, depending on the provisions of the policy document. If you have accumulated NCB, you can use it to reduce your two-wheeler insurance premium considerably at renewal.

5. Anti-theft devices

Anti-theft device is a security feature which reduces the chance of your two-wheeler theft. This in turn helps in reducing the risk for the insurance provider. Just like how the insurers compensate for higher risk by charging a higher premium, the lower risk is rewarded with a lower premium. So, if you do not have such security devices installed on your two-wheeler, it can hike your premiums. 

5. Anti-theft devices

Anti-theft device is a security feature which reduces the chance of your two-wheeler theft. This in turn helps in reducing the risk for the insurance provider. Just like how the insurers compensate for higher risk by charging a higher premium, the lower risk is rewarded with a lower premium. So, if you do not have such security devices installed on your two-wheeler, it can hike your premiums. 

6. Voluntary excess

Two-wheeler insurance companies offer two features - Compulsory excess and Voluntary excess. Compulsory excess requires you to pay a certain percentage of the repair cost from your own pocket while the insurer pays the rest. Compulsory excess is fixed and cannot be increased or decreased.

However, there is voluntary excess, which you can adjust at the time of purchasing the policy. You can go for a higher voluntary excess for lowering the insurance premium. But higher excess will require you to pay more money from your pocket if your two-wheeler is damaged.

7. Make and model

The amount of premium also depends on the model of your two-wheeler and its manufacturer. The more high-end the model, the higher is the insurance premium you need to pay. That means if you are the owner of a Harley Davidson or Ninja you would pay higher premiums.

8. Engine capacity

Do you know the cubic capacity of your two-wheeler’s engine? If you do, you are one step closer to knowing what your insurance premium should be. Higher the engine capacity, higher will be the premium charged.

9. Geographic location

The geographic location of the person using the two-wheeler also contributes towards determining its premium amount. If you stay in an urban location with higher density of traffic, this results in higher incidences of accidents. Well, that again means a higher premium for you!

To sum it up

Two-wheeler insurance is now easily available online in India. ICICI Lombard has a simple process of buying as well as renewal of two-wheeler insurance policy online. It provides 24x7 claim assistance so that your claims are settled fast. Once you are aware of the factors that affect insurance premiums, you can easily decide on which policy to opt for.

However, before making any payment, it is always advisable to read the policy documents carefully so that you are fully aware of the benefits, inclusions and exclusions of the selected policy.