At your each to the vehicle dealer to book a new bike, you might have heard innumerous times of the requirement of a two-wheeler insurance besides the registration formalities. The Motor Vehicles Act of 1988 makes it a prerequisite to ride one legally. But what is it that is mainly considered by people at large when buying? Premium, right? Then follows other factors like policy features, claim process and more. So, the thought of what impacts the premium must have surely crossed your mind. And for all those curious souls looking for an answer to it, you have come to the right place. This article elaborates how the premium of your two wheeler insurance is impacted based on the different factors, some of which are within your control, while a few others aren’t.
Before that, let’s look at what is exactly meant by premium –
The premium of a two-wheeler insurance policy is the price you pay to acquire insurance coverage for your vehicle.
These are some of the different elements that in combination impact your bike insurance premiums –
- Type of policy
The type of insurance policy is foremost decision you must make, and it is instrumental in deciding your premium. Bike insurance plans are available in two types – third party bike insurance and a comprehensive insurance policy. Among these two types, you can buy either one, but a third-party cover is the bare minimum. Under this insurance cover, any legal liabilities arising due to an accident or collision injuring a third person or damaging their property is covered. The regulator, IRDAI, mandates policyholders to have at such third-party cover and hence, the premiums are regulated by them. This ensures everyone buying a bike can buy such insurance cover. On the contrary, for more safety-conscious buyers, a comprehensive cover works the best. This policy combines the benefits of a third-party policy and includes own-damage cover with it. Thus, comprehensive plans provide a 360-degree coverage. For these comprehensive plans, the premiums for own-damage component are determined by the insurance company whereas the third-party rates are regulated by IRDAI. You can visit the official website of IRDAI for further details.
- Insured Declared Value
Next factor that is instrument is determining the premium is the insured declared value or IDV. It is the maximum amount that the insurance company pays in the event of total loss, theft or damages beyond repair. Since the IDV defines the risk that the insurance company has to undertake, it is directly proportional to the premium charged for your insurance policy.
- Add-on covers
Add-on are an extension of the comprehensive policy. They are optional yet additional policy features that can be bought helping you customise and fine-tune the policy coverage. Since these add-ons can be bought over and above the standard comprehensive plan, they increase the premium. Further, there are many different add-ons offered by insurance companies. Thus, selecting only the ones that are truly necessary helps keep the premiums in check.
- Registration location
The registering transport office of your vehicle also determines the premium rates charged. Insurance companies base the premiums in two zones—Zone A comprising of eight metro regions of Kolkata, Chennai, New Delhi, Mumbai, Bengaluru, Hyderabad, Pune and Ahmedabad and Zone B covering rest of India. So, based on the location of registration, the premium varies. * Standard T&C Apply.
While these are some essential factors that determine the premium at bike insurance renewal and purchase, the purpose of the vehicle also influences the premium. A commercial vehicle faces a higher risk of accidents and thus will be steeper in price compared to a privately registered vehicle. So, keep in mind these factors and then decide to tweak the factors that can be controlled like add-ons, deductibles, IDV and more. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.