For most bike owners, the insurance premium is the deciding factor in the selection of a pertinent insurance plan. Therefore, it is essential to know the factors that have a direct bearing on the cost of your two-wheeler insurance policy. Read this post to know five such decisive factors.
Insuring, your two-wheeler not only safeguards you against unforeseen misadventures but also shields you from legal liabilities. With numerous companies offering various insurance products, choosing an appropriate insurance policy can be an arduous task. Often, the fundamental factor that governs selection, is the economic suitability offered by a policy.
The price of aninsurance policy is arrived at after considering certain important factors. A knowledge of these factors can help you in picking up the most fitting option. Here’s a list of 5 pivotal factors that affect the pricing of two-wheeler insurance.
- Engine Capacity: The specifications of the engine, like power, torque, etc., are measured in terms of cubic capacity. A higher cubic capacity correlates to a higher power and bigger engine size. Generally, two-wheelers with higher cubic capacity are more powerful, susceptible to damages and highly-priced as compared to those with low cubic capacity engines. Therefore, the insurance premium for such vehicles would be higher.
- Your Location: The RBI has classified Indian cities into six different categories based on the population. These categories are labelled from Tier 1 to Tier 6. The two-wheeler insurance priceis generally higher in Tier 1 and metropolitan cities as compared to other categories because of the overcrowded streets, which make your bike more vulnerable to damages.
- The IDV of Your Bike: The insurance premium of your bike depends on the Insured Declared Value or IDV of your bike.A new two-wheeler attracts a much higher rate of premium because of its high IDV. This is because of its high market value and low depreciation. As the vehicle ages, the rate of depreciation increases, thereby bringing down the IDV, and thus, the market value of your car. Hence, an older bike usually attracts a comparatively less rate of premium.
- Type of Policy: A two-wheeler insurance policy, just like any other motor insurance, comes in two variants. These are:
- Third-party insurance policy
- Comprehensive insurance policy.
While the former covers damages caused only to third parties, the latter covers other damages that can be caused to your bike in addition to covering third party liabilities. Thus, Two Wheeler insurance pricein case of a comprehensive plan is generally higher than third party insurance plan. However, it comes with wider coverage.
- The Number of Add-ons:Enhancing your bike insurance policy by taking add-ons means giving yourself a larger sense of security. These add-ons are in the form of accessories cover, passenger cover etc. The number of add-ons has a direct relation to the insurance premium. The more the number of add-ons, the more will be the premium and vice versa.
The number of two-wheeler insurance products available is witnessing a steep rise because of the dynamic nature of the insurance market. A conscience comparison based on the above factors can help you in selecting a preferable two-wheeler insurance policy in terms of price.
