Privately owned vehicles are the most convenient way to travel in the age of increasing traffic snarls where dependence on public transport can only result in delays. Among the available modes, two-wheelers are popular for its price as well as the convenience they offer to navigate traffic jams and hence, chosen by many. It is one of the preferred modes of transportation, not just in the cities, but also in small towns.
However, all two-wheelers need to mandatorily purchase a bike insurance policy complying the Motor Vehicles Act. But selecting one among the myriad alternatives is never easy. You need to ensure the policy meets your requirements and at the same time keeping the policy budget in check. This article states some of the critical components that impact your premium which you need to check when buying a two-wheeler policy.
- Type of policy
The most critical determinant of bike insurance premiums is the type of insurance coverage. Two-wheeler insurance is available in two types—third-party or comprehensive insurance coverage. Between the two, you can buy either, but a third-party coverage is the bare minimum. Such third-party policy provides for any legal liabilities that arise due to an accident or collision injuring a third person or damaging their property. Since it is the minimum insurance coverage that is required, the regulator, IRDAI, regulates its premiums. This way, all two-wheeler owners can afford such basic insurance coverage keeping the bike insurance price at minimum. You can visit the official website of IRDAI for further details.
Contrary to third-party plans, safety-conscious buyers opt for a comprehensive plan combining the benefits of third-party policy and own-damage cover. Hence, comprehensive plans offer a 360-degree coverage. The premium for such policy is determined by both, the regulator for third-party cover and the insurer for own-damage portion.
- Insured Declared Value
Insured Declared Value or IDV is the next critical factor that impacts the premium of your policy. IDV is that amount which is the insurance company compensates in the event of a total loss or damage to your vehicle. It is also the amount which is paid at times when the bike is damaged beyond repair. Since such IDV defines the risk undertaken by the insurance company, it directly impacts the premium. * Standard T&C Apply
- Add-on covers
Extension to comprehensive plans are add-ons covers. These additional coverages help to enhance as well as customise the policy scope. They are optional coverage that you can opt over and above the base policy. Since they are discretionary and not compulsory, they increase they premium if you opt for any, thereby impacting the insurance prices.
- Registration location
The RTO where your vehicle is registered also determines the premium to be levied. Insurance premiums are classified in two zones—Zone A which includes eight metro regions of Kolkata, Chennai, New Delhi, Mumbai, Bengaluru, Hyderabad, Pune and Ahmedabad while Zone B covers the rest of India. Thus, based on the registering location of the bike, the premium varies.
These are some crucial factors that impact the premium at two wheeler insurance renewal and purchase. Apart from the above, the purpose of the vehicle also influences the premium. For instance, a bike registered for commercial purposes faces a higher risk of accidents and thus has steeper insurance premiums compared to privately registered vehicles. 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.
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