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| March 29, 2024

5 Ways Your Bike Impacts The Insurance Premium

When purchasing a bike, most people go into the specifications, explore different makers, compare on-road prices, and then meticulously narrow down their search to a few viable options. However, amidst the thrill of purchasing the perfect bike, one crucial aspect often gets overlooked, which is the motor insurance.

As per the Motor Vehicles Act, getting at least a third-party bike insurance policy is mandatory in India. This means that you cannot register or ride your bike in any part of the country if you do not have a valid two-wheeler insurance policy. The rule was passed to ensure that every individual and the two-wheeler are insured against any unfortunate accident under the two-wheeler insurance policy.

When searching for some of India's best bike insurance companies, most providers offer three different types of policies: third-party liability policy, standalone own damage policy, and comprehensive two-wheeler insurance policy. No matter the type of two-wheeler insurance policy you choose, there is no fixed premium for a particular vehicle model. To give the best sum for the bike, an insurance company considers a range of factors to analyze the risks associated with providing coverage for your bike. Ahead are five factors that affect the premium of your two-wheeler insurance policy.

Suggested Read: How To Buy Two-wheeler Insurance Online?

Manufacturer of the Bike

Given how the two-wheeler insurance policy is bought to cover the bike's value, the manufacturer of the bike is one of the important factors that affect the bike's insurance premium. Since the bike's market value is on the higher side, its Insured Declared Value (IDV) will be higher, resulting in a higher insurance sum and a higher premium compared to less expensive bikes. Hence, the manufacturer of the bike has a direct bearing on the two-wheeler insurance sum insured.

Bike Model

Similar to the manufacturer of the bike, the make and model of the bike can heavily influence the insurance rates. Expensive sports bikes, such as Harley Davidson, tend to have higher premiums due to higher potential costs of repairs. On the contrary, less expensive bikes, such as TVS Star City, may have lower premium rates due to lower repair costs. Before giving the insurance cover, an insurer will have a look at the bike's current market value and then calculate the insurance cover and premium accordingly. Some of the best bike insurance companies offer online two-wheeler premium calculators, which lets you calculate the premium by adding your bike's make and model.

Bike Engine

The size of your bike's engine, measured in cubic capacity (cc), is one of the most important factors in determining the insurance amount to be paid. The more the bike's cubic capacity, the higher the premium you will end up paying. Bikes with bigger engines have higher potential repair costs than lighter ones. The Insurance Regulatory and Development Authority of India (IRDAI) declares the premium for third-party bike insurance policies based on the engine's capacity. Hence, it is always advisable to keep your bike's engine healthy at all times.

Age of the Bike

The age of the bike is an equally important factor that affects the two-wheeler insurance premium. It is important to note that bikes are depreciating assets in nature. When an insurance company offers a policy quotation, the age of the bike is factored in to estimate total depreciation. The more age of the bike, the higher the two-wheeler insurance premium will be and vice versa. Hence, the age of the bike also has a direct impact on insurance coverage and premiums.

Insured Declared Value

Apart from the manufacturer, make and model, and age of the bike, the market value of the bike is determined by a range of multiple factors. For the best insurance coverage for your bike, the insurer looks at the current market value of the bike and offers it to the policyholders as a sum insured. Insured Declared Value or IDV is the maximum compensation an insurer will pay to the policyholder in case of bike theft or a total loss/constructive loss. While calculating the claim amount, the insurance company will also factor in deductibles and depreciation.

In conclusion, a two-wheeler insurance policy provides extensive coverage for your bike in exchange for a little investment. At Muthoot Finance, you are assured of the best insurance coverage for your bike that does not cause much damage to your pocket as well. Muthoot Finance's simple and hassle-free process for buying and renewing two-wheeler insurance makes it a notch higher than the competition. Buy an insurance policy for your bike from the list of vehicle insurance policies that suit you best and give the best coverage to your vehicle.

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