Factors determining your bicycle insurance premium
With more and more people buying two-wheelers in India, the possibility of road accidents has also increased, which makes two-wheeler insurance even more important. In addition, the Motor Vehicle Act of 1988 mandates insurance coverage for all two-wheelers. To make it easier for customers, many insurance companies now offer two-wheeler insurance online. One of the main factors that people take into account when purchasing insurance is the premium that comes with it. Here are some factors that determine your bicycle insurance premium:
# Type of bike and cost
The insurance premium varies depending on the type of bike. Insurance companies take particular account of the engine capacity (cc) of the vehicle when determining the bicycle insurance premium. A higher cc means a higher insurance premium. Thus, the premiums for insurance policies covering high-end bicycles are higher.
# Type of cover
There are two main types of bicycle insurance policies: liability insurance, mandated by Indian law, which covers damage or injury caused to any third party involved in an accident, and comprehensive insurance which covers both damage or injury specific to third parties. The premium for a comprehensive bicycle insurance policy is usually higher because of the coverage it provides. While you can select either type of policy, going for a comprehensive policy is preferable due to the added benefits and coverage.
# Pilot data
Factors such as the policyholder’s age, driving history, location, etc. also influence the bicycle insurance premium. Insurers are likely to offer a low premium to a 30-year-old man with 10 years or more driving experience, compared to a 20-year-old individual because the risk associated with the latter is higher.
# Bike modifications
While modifying your bike may improve its performance and / or looks, most modifications don’t go well with insurers. In the case of some cosmetic changes, the improved visual appeal of the bike may increase its chances of being stolen, so your insurer may increase the premium.
Insurers will often declare a void policy if it experiences a change in performance, as changing the bike’s speed or handling aspects alters its optimum technical aspects, putting you at risk.
# Anti-theft devices
Security modifications such as installing an anti-theft device can lower your premium because they reduce the risk of theft, lowering the insurer’s risk. Just as insurers charge you a higher premium for anything that increases risk, they also compensate you for anything that reduces risk.
# Additional coverages
Add-ons provide additional coverage when you purchase a full insurance policy. They include zero amortization, roadside assistance, etc. The more additional coverages you take, the higher your premium will be. The best way to keep your premium under control while having adequate coverage is to choose only the additional features that are useful to you.
# No-Claim Bonus (NCB)
When you renew your bike insurance after one year of insurance without a claim, you are entitled to a reduction – no claim premium – on your insurance premium. The NCB is 20% for the first year without a claim and can reach 50% for the fifth year without a claim.
# Gap in renewal
Failure to renew your insurance policy can result in financial loss in the event of an accident. Insurers generally allow a 30-day grace period to renew your insurance policy. However, if you are still unable to renew it, you will need to purchase a new policy, which may have a higher premium because you are not eligible for a NCB.
Considering how a bicycle insurance policy can provide you with financial protection in the event of an accident, make sure you have a valid policy. Buy online bike insurance if you haven’t already.