Bike insurance is an important investment that provides financial protection in case of an accident or theft. However, the premium amount for bike insurance can vary significantly depending on certain factors. Here are the top 5 factors that insurance companies consider while determining your two wheeler insurance premium:
1. Engine Capacity
The engine capacity or CC of your bike is one of the major determining factors of your bike insurance premium. Generally, bikes with higher engine capacities are considered riskier by insurers as they can attain higher speeds. Therefore, bikes with larger engines like 350cc and above will have higher premiums compared to smaller engine bikes below 150cc. The premium increases substantially with every 50cc increase in engine capacity. So opting for a bike with a lower engine capacity can save you money on insurance costs.
2. Age of the Bike
Newer bikes are usually more expensive than older models. Similarly, insurance premiums are higher for newer bikes and gradually decrease as the bike ages. This is because newer bikes are considered to be in a better condition and have fewer chances of developing technical faults compared to older bikes. The premium rates usually remain high for around 3-5 years after which they start declining each year. So if you own an older bike, it can reduce your insurance costs.
3. Claim History
Your own claim history greatly influences your insurance premium. If you have claimed insurance in the past, especially for a comprehensive claim, your future premiums are likely to increase substantially. This is because previous claims indicate higher risks and chances of future claims as well. Opting for high voluntary deductibles can help keep your no-claim bonus intact in case of a small claim and control the impact on premiums. Maintaining a clean claim history is the best way to get lower renewal premiums.
4. Location
The city or area where your bike is registered plays an important role in determining premium rates. Metros and larger cities usually have higher insurance costs compared to smaller towns due to higher traffic, road, and theft risks. Areas with good road infrastructure and lower accident rates will attract lower premiums. Similarly, covered parking at home can provide a discount versus street parking. Opting for a garage in a less risky area allows benefitting from relatively cheaper insurance.
5. Add-on Covers
While the basic third-party liability cover is mandatory, adding optional covers like zero-depreciation, engine protection, and accessories covers can increase your premium amount. These add-on covers provide enhanced protection but at the cost of a higher premium outgo. Carefully assessing your needs against budget can help opt only for necessary add-on covers to control unnecessary premium inflation.
Conclusion
The engine capacity, age, and location of your bike along with your own claim history are the major factors influencing your motor Insurance premium. Maintaining a small engine bike, insuring older vehicles, choosing less risky areas, and keeping a clean claim record can collectively save you big money on insurance renewal costs in the long run. Carefully evaluating all options will help you avail the best coverage at an affordable premium.