What are the factors affecting Two Wheeler Insurance Premium?

Two wheelers are an easy and faster mode of transportation and is also an affordable vehicle as compared to cars, but are risker and more prone to accidents. If you have a two-wheeler, you should get an insurance policy for your vehicle to ensure future financial security from the damages arising due to a road accident. Buying a third party insurance plan for two-wheeler is also mandatory under the Motor Vehicles Act.

Two Wheeler Insurance

There are two variants of insurance policy for two-wheelers which includes third party insurance policy and comprehensive insurance policy. Third party insurance policy provides limited coverage and the premiums of the party insurance policies are fixed by IDRA whereas comprehensive insurance policy provides wider coverage and the premiums for the comprehensive insurance policy is fixed by the insurance company taking into account various factors related to the two-wheeler.

Factors Affecting Two-Wheeler Insurance Premiums

The premium cost of the two wheeler comprehensive insurance plan is calculated by the insurance companies considering various factors and depending up to the risk of the claim by the holder of the policy. The higher the risk of a claim, the higher premium will be charged by the insurance company. The factors that affect the premium cost of the two-wheeler comprehensive insurance plan are as follows:

Type of Insurance Plan

There are two variants of insurance policies offered by insurance companies which include third party insurance policy and comprehensive insurance policy. The third party insurance is mandatory under law and covers only third party damages. The comprehensive insurance policy provides wider coverage and all-round protection and therefore have a higher premium cost as compared to the third party insurance policy.

Type of Two- wheeler

Different Two wheelers have different specifications. The cost of insuring is therefore different. The engine cubic capacity of the two-wheeler is an important factor which affects the premium for the insurance plan. The premium cost will be higher for higher engine cubic capacity and vice versa. Also, the age of the two-wheeler, model, place of the registration, class of the vehicle, fuel type and miles covered by the vehicle also affect the cost of premium of the two-wheeler.

Market Value of the Two- wheeler

Market Value or current price of the two- wheeler also affects the premium of the insurance plan. The brand and functionality of the two wheeler determine the market value of the vehicle. For instance, Royal Enfield has higher market value and hence higher premium cost is to be paid for its insurance. Likewise, for Honda Activa, the market value for the vehicle is low, with low premium cost. In case the two-wheeler is old, then the premium cost will be based on the resale value of the vehicle and its condition

Risk Evaluation

Another important factor for determining the premium of the two-wheeler insurance is the risk evaluation which is based on the driver’s record. The age, gender, driving experience and driving record also affect the two-wheeler insurance premium. The insurance company calculate the risk factor which is associated with such drivers and according to charge the premium. For instance, a young or a new driver will be charged a higher premium than a middle aged or an experienced driver.

Add-On Riders/ Covers

There are many add-on covers available with two-wheeler insurance policy such as personal accident cover, zero deprecation cover and many more. If you buy add-on riders/covers with your comprehensive two-wheeler insurance plan, then you will have to pay additional premiums for such covers or riders. The add on covers increases the coverage of the insurance policy but only required ones should be brought by you. The more numbers of add-on covers, the higher premium cost.

Modifications

Many individuals add accessories to their individuals to improve their performance and aesthetic. These modifications, however, are usually not provided coverage under the two-wheeler insurance policy. To ensure coverage to such modifications the holder of the policy is required to buy an add-on cover with the base insurance plan by paying an additional premium because adding of the modifications increase the cost of the insurance policy.

The Gap in the Renewal of the Policy

Any gap or delay in the renewal of the two-wheeler insurance by the holder of the policy within the specific time can result in the lapse of the no-claim bonus and yearly discounts and no claim bonus offered under the plan. Renewal of the policy on time or before the due date reduces the premium of the plan at the time of renewal by a relevant per cent which ranges from 10% to 50% depending upon the claim free policy years of the plan.  Therefore, it is advised to renew the insurance plan in time or opt to buy a long-term two wheeler insurance plan

Anti-theft Devices

In case of theft or loss of the two-wheeler, the insurance company will check if the policyholder had taken the safety measures in order to prevent the theft of the two-wheeler. The claim for the insurance plan will be settled by the insurer only after it is satisfied with a fair claim. Hence, you can install an anti-theft device on your two-wheeler which will reduce the premium cost.

Memberships

Some Two-wheeler insurance companies offer a discount to its customers if they are a member of certain organizations such as the Automobile Association of India.

Conclusion

If you are planning to buy an insurance plan for your two-wheeler to secure yourself from all the future liability arising due to road accident comprehensive two-wheeler plan is ideal for you. Before buying an insurance plan for your two-wheeler it is necessary to compare various two-wheeler insurance plans offered by different insurance companies to help yourself choosing a right insurance plan with required necessary and wider coverage at affordable rates of premium.