Investing in a bike insurance policy is not a luxury but a necessity. It protects you against both financial and legal risks. It is mandatory to have an insurance policy covering your vehicle in India. The Motor Vehicles Act of 1988 mandates every two-wheeler owner to hav insurance for bike (Source: Indian Kanoon). It is illegal to ride a bike without a valid insurance policy. Also, you cannot register or use your bike if you do not have insurance coverage for it.
Therefore, remember, if you are planning to buy a bike, you must buy at least third party bike insurance alongside. And, the cost of your bike insurance policy will be largely determined by your bike. Let’s learn how.
Different types of bike insurance
There are different types of insurance for a bike to choose from:
- Third party bike insurance
- Standalone own damage policy
- Comprehensive two-wheeler insurance policy
Third-party insurance covers third-party liabilities in case of an accident involving the insured bike. It covers the cost of treatment for any injuries sustained by a third-party person(s) and/or the damage caused to the third-party property. In addition, it is mandatory to have third party bike insurance to ride your bike on public roads. However, it does not cover own damage and you would still have to pay for the repair of your bike in case of a mishap.
Meanwhile, a standalone own damage policy and a comprehensive policy cover third party liabilities as well as own damage.
Insurance for bike is based on several factors and, your bike tops the list. Various aspects and features of your bike along with the choice of insurance coverage determine your insurance coverage cost.
5 ways your bike affects your insurance coverage
An insurance provider offers a policy to you after evaluating the risks involved. These five bike-related factors have a direct effect on insurance for bike:
1. Manufacturer of your bike
The manufacturer or brand of your bike can significantly impact the cost of your bike insurance policy. High-end bikes or luxury bikes such as Harley Davidson, BMW, and Indian Springfield are very expensive, and so are the motor insurance policies that cover them.
The brand, looks, and features of such bikes make them appealing for riders and high-risk for insurance providers. Therefore, the premium amount for such bikes is usually higher than that for economy bikes such as TVS, Bajaj, and Hero Honda.
2. Model of your bike
Your bike’s model affects insurance costs significantly. Even identical bike models may have different insurance premium costs. For example, TVS Motors’ TVS Apache RR and TVS Apache RTR are different models of the same bike type. However, they have different pricing ranges. It means their insurance premium amounts will be different too.
3. The engine capacity of your bike
The engine is considered the heart of the bike. The more you look after it, the better your bike will perform. When you buy insurance for bike, one of the main factors used to calculate the premium is the engine’s cubic capacity (cc). Bikes with higher cubic capacity are more expensive to insure.
4. When was the bike purchased
The value of two-wheelers declines with time. As a bike becomes older, several issues such as engine damage, and general wear and tear appear. This leads to reduced bike value, which in turn lowers your bike insurance premium cost. A new bike would be costlier to insure.
5. IDV of your bike
IDV or Insured Declared Value is the estimated current market value of the bike. Remember, a higher IDV will increase your insurance cost and a lower IDV will result in a lesser payout for total loss claims. Consequently, whenever you renew your coverage make sure to choose the appropriate IDV.
Apart from these primary factors, the modification you make to your bike will also have an effect on the insurance for bike.
- For performance
Performance upgrading tools in two-wheelers usually include fuel-efficient parts and systems. As we all know, higher speeds increase the likelihood of accidents. It means a higher chance of raising a claim. You are free to choose whether or not to make the modification. However, given the risk, an increase in bike insurance cost is all but certain.
- For looks
By giving your dream vehicle a new style or changing its colour completely, you try to enhance its appearance. However, when a product’s aesthetic value rises, the chance of theft rises as well. This immediately impacts the price of two-wheeler insurance, thus, the insurance company charges you more for insurance. The market value of your bike increases along with its aesthetic appeal, resulting in a commensurate difference in premiums.
- For security
These types of modifications protect your vehicle and bring down your insurance prices. Security modifications make it less likely for your bike to get stolen. If you have an anti-theft device installed, you will be seen as low-risk and will be offered a lower premium cost.
To encourage this practice, the insurance provider offers two-wheeler insurance at a discounted rate. Security modifications, therefore, enable you to save money on insurance while also keeping your bike safe.
Bike insurance protects you against legal as well as financial liabilities that can arise due to unfortunate circumstances when on the road. Whether you choose to go for third party bike insurance or a comprehensive plan, having bike insurance is a necessity and you must not ignore it.
So, before you kickstart the process and purchase insurance for bike, consider the above-mentioned factors. They significantly affect your two-wheeler insurance premium cost. So, choose wisely.
Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.