Have you ever wondered why different bikes attract different insurance premiums? Well, this article exists to answer this question. We have already covered the various parameters that impact bike insurance premium in previous articles.
For starters, there are set standards and specifications for motorbikes which differentiate the amount of premium that they attract. A two wheeler insurance premium calculator depends on these factors to find the net value of a bike’s premium.
Some of these parameters are as discussed below:
Bike’s age: The age of your bike determines the insurance premium you would need to pay. This is because new bikes have a higher insured declared value (IDV), which is the total sum insured an insurer pays the policyholder upon total damage or loss. However, older bikes have a lower IDV due to their depreciated value. Therefore, premiums on older bikes are relatively lower than new bikes.
Engine cubic capacity (cc): The cubic capacity also influences the premium amount. An engine with higher cc means that the bike has more power. Therefore, the premium attracted by a higher cc vehicle is relatively higher as compared to lower cc motorbikes.
Model: The model of the bike is a critical factor in determining its premium. This is because high-end bikes are more valuable compared to the basic models and correspondingly have a higher IDV. The bike insurance cover for a high-end bike, thus, attracts higher premiums as compared to smaller-sized models.
Location: Bikes that are ridden around areas that are considered to be high risk (known as Zone A cities) and prone to accidents attract higher premiums as compared to areas where accidents are not frequently reported (Zone B cities such as rural areas).
Additional covers (Add-ons): Add-on covers offer extended protection and are customized to suit the needs of the buyer. They provide extra benefits but increase the premium cost so utilize them wisely.
Type of insurance policy purchased: Different insurance policies attract different premium based on the cover they offer. Third party insurance for bike and comprehensive policies vary in their premium rates because one only covers damage sustained by the third-party and the other has a more extensive cover. Nonetheless, a comprehensive cover offers protection from own damage and, therefore, attracts a higher premium on insurance.
Applicability of no-claim bonus: No-claim bonus (NCB) is given as a concession on premium during two wheeler insurance renewal if you do not make any claims during the previous policy term. These concessions reduce the cost of the premium.
Purpose of the bike: Bikes used for commercial purposes such as courier services and deliveries attract different premium rates as compared to personally owned bikes since they are covered under commercial vehicle insurance.
These are among the key factors which influence two wheeler insurance premium. Determine your premium with online calculators offered on websites of insurance providers. Choose the best coverage clubbed with the cheapest two wheeler insurance plans. Make sure your requirements are met at the best possible rates.