Things to consider before buying two-wheeler insurance

Published on : 07:54 AM Jan 28, 2022

The bike has become part and parcel of everyday life as it is the best mode of transport and affordable. While youth prefer motorcycles and elderly scooters, what is important is whether you have insured your bike or not. If not go and purchase an insurance policy as it will protect your vehicle from adverse effects of damage incurred due to thefts, accidents and natural calamities.

Hyderabad: Two-wheelers provide excellent mileage and are long-lasting. Besides the low maintenance costs, an average motorbike is not too expensive. However, if you want to reduce the strain on your budget, you can always avail yourself of affordable two-wheeler loans.

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If you own a two-wheeler it is mandatory to buy an insurance policy as it will help you protect your vehicle from the adverse effects of damages incurred due to unforeseen incidents such as thefts, accidents and natural calamities. Investing in the insurance policy will ensure safety for your bike. Let us know what precautions to be taken while buying an insurance policy.

Vehicle Insurance: The price of a bike varies depending on the features, manufacturer and model. Insurance coverage is based on the price of the two-wheeler. So, the insurance premium is directly linked to the price of the vehicle. The premium for a Rs 75,000 bike is lower than a Rs 1 lakh bike. At the same time, the premium varies based on cubic capacity (cc). The 75cc bike has a lower premium compared to the 350cc bike. The Insurance Regulatory Authority defines slab rates based on CC. With the advent of electric vehicles now, the premium for third party electric two-wheelers is also being determined on a kilowatt basis. Advertisement

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Notably, the value of your bike will decrease over time. The depreciation rate is higher for the old bikes while it is five per cent for new bikes (six months old) and there will be a reduction of up to 50 per cent for bikes if they are more than five years old.

What type of coverage is required?

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There are two types of coverage in two-wheeler insurance. One is a Third Party (TP) cover and the other is a Comprehensive (broad) cover. By the way, every bike on the road must have a Third Party cover. This will compensate for the financial loss caused to your third party by your vehicle. However, the Third Party cover does not have protection for the vehicle. The Comprehensive policy covers coverage of natural disasters such as earthquakes, floods and road slippage. Not only that, they will be covered for damages caused by accidents and thefts. However, its premium is higher than the Third Party cover. Even if the price is high, it is better to take a Comprehensive cover.

Insurance Declared Value (IDV)

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Insurance Declared Value (IDV) is very important as the IDV is the maximum value given by the insurance company even if your vehicle is completely damaged or stolen. It is calculated during each renewal by subtracting the depreciation from the bike price.

No Claim Bonus (NCB)

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No Claim Bonus (NCB) is given by your insurance company. According to the predetermined slabs, a discount is available. It ranges from 20 per cent to a maximum of 50 per cent and NCB will reduce your motor insurance premium.

Add-on covers

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In addition, add-on covers provide extra protection for your vehicle. You can plan your own coverage. Each add-on is planned to meet a specific need. These include roadside assistance, zero depression, medical cover and engine protection. It is best to choose the add-on that best suits your needs.

If you keep all these in mind the premium calculations will be easier to know at the time of insurance renewal or when taking out a new insurance policy, according to

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Gurdeep Singh Batra, Head-Retail Underwriting, Bajaj Allianz General Insurance.

Also read: Know how to claim third party two wheeler insurance

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