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Factors That Decide Bike Insurance Premium

Written by Sumit Arora
Updated On Aug 06, 20212 min read

Read this article to find out about the top factors that act as determinants for the cost of your bike insurance premium.

Bike management is a costly endeavour. Insuring your bike with the best bike insurance plan protects you from a variety of financial responsibilities that may occur as a result of an unfortunate incident such as a road accident, natural catastrophe, man-made disaster, theft, or third-party liabilities. By paying a premium, a bike insurance plan can be acquired. The cost of a bike insurance policy is referred to as a premium. The cost of your bike insurance coverage is influenced by a number of things. We'll go through each of these elements in depth in this article.

Factors That Decide Bike Insurance Premium

Factors That Are Determinants of Your Bike Insurance Premium

Based on your personal information and corporate claim history, bike insurance providers or companies use various criteria and algorithms to decide the premium cost. Knowing what factors influence your premium prices can assist you in making an informed selection when obtaining insurance. These are the factors that influence premiums - 

  • The Bike’s Model

The brand, type, and cubic capacity of your bike's engine, among other factors, will have a direct impact on your bike insurance rate. This is due to the fact that your insurance rate is determined by the value of your car, which is referred to as Insured Declared Value (IDV). Aside from the IDV, the bike's size and engine capacity are other important factors in determining the cost of insurance. The lesser the premium, the bigger the bike.

  • The Age of Your Bike

The vehicle's age is mostly considered for calculating depreciation and insured declared value (IDV). Depreciation is the decrease in the value of any commodity or asset over time due to natural wear and tear. The IDV stands for the bike's current market worth. An older bike will have greater depreciation and less IDV, implying that the insurance rate will be lower than a new bike.

  • Location of Registration

The location is a significant element in determining the insurance rate. If the bike is utilised mostly in an urban context, the premium prices are higher because accidents are more common in cities. Riding a bike in a tier 3 city or a semi-rural location, on the other hand, is regarded as less dangerous. As a result, the premium for riding your bike in certain locations will be lower.

  • Insurance Type And Add-Ons

In India, having a basic third-party bike insurance policy for your bike is required by law. It protects the policyholder from third-party liabilities but does not give any protection to the policyholder. A comprehensive bike insurance coverage will cover both your own and third-party obligations. With the help of add-ons, these policies can be improved. Third-party insurance is less expensive than comprehensive coverage, but the policyholder is underinsured. Adding add-ons raises the premium price. The cost of the premium rises as the coverage increases.

  • Your Bike's Modifications

Thanks to cutting-edge technology, customising your bike to your preferences has never been easier. Modifications of various kinds will have varying effects on your premium cost. Upgrades that improve security will lower the premium, while modifications that improve the bike's appearance and performance will raise the price. Make sure you notify your insurer of these changes to avoid having your insurance claim dismissed.

Also Read:- 3 Easy Ways To Check Bike Insurance Expiry Date Online   

Take Away

When purchasing or renewing bike insurance, the premium is quite important. Make sure you choose insurance with a reasonable premium and enough coverage. Insurance is not a requirement, but rather a strategy for coping with financial risks. To avoid unwanted extra fees, make sure you obtain your bike insurance from a reputable insurance provider or firm.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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Written by Sumit Arora
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 Sumit is an insurance industry veteran with more than 20 years in the industry. Sumit is a frequent columnist and speaker at major insurer conventions and is a heard name in insurance circles In his free time, Sumit likes to spend time with his family and go on trips

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