How To Calculate Premiums For New And Pre-Owned Two-Wheelers?

Jayden Runolfsson | November 27, 2020 | 103 | Finance

Two-wheelers are one of the most preferred forms of transport around the country. Narrow lanes or open highways, bikes can go any distance as you want. As they are the preferred mode of transportation, it is essential for you to take adequate care. Regular maintenance is one of the ways. But apart from that, having insurance coverage also helps.

Bike insurance is available in two types – third-party and comprehensive. While both plans have significantly different scope, their premiums differ as well. Not only the type of policy, but also the type of bike impacts the premium amount, i.e. new or pre-owned bike. Let us look at how the premiums are calculated for different types of bikes –

#1 Engine capacity of the two-wheeler

As the price of your bike differs depending on the quality and technical features, the insurance premiums too differ. The cubic capacity of the bike is the main component that determines the premium. When you purchase bike insurance online or offline, its engine capacity will decide the premium. Thus, the higher the engine capacity, the higher will be the premium.

#2 Model and make

The model and make of your bike are one of the key factors that determine the premium calculation. Whether it is a pre-owned bike or new bike, it is considered when your insurer fixes the premium amount.

#3 Value of the bike

Your bike’s value is determined based on the functionality it offers. Further, the brand that you select is instrumental in deciding the value. Say, for example, you opt for a bike of a luxury brand, it will be more expensive than a brand that produces for the masses. Similarly, an increase in the value will have a direct impact on the premium amount.

#4 Modifications on your bike

Modification can be either aesthetic or the ones that increase the performance. It is necessary to insure these modifications too. If you fail to inform your insurance company about these modifications, it can lead to rejection of your claim Thus, make sure to inform your insurance company of any modification that you make. Since modifications are additional components, they impact your two wheeler insurance price

#5 Add-ons

Add-ons are additional coverage options that you can purchase over and above your comprehensive insurance policy. It is essential you assess your requirements and then purchase them. Not all add-ons can be useful and end up increasing the premium of your policy.

#6 Concessions

Many first-time insurance buyers are unaware of the concessions that are available in purchasing insurance policies. One such concession is the no-claim bonus. As the name suggests, it is a concession for every claim-free policy tenure. The percentage of no-claim bonus starts at 20{ffbd777502aac056f7e4bef15c603cac3699188bceadee3c19a9c384e2652d39} and goes all the way up to 50{ffbd777502aac056f7e4bef15c603cac3699188bceadee3c19a9c384e2652d39} for consecutive years without a claim.

#7 Memberships

Premiums for your two-wheeler insurance policy are adjusted if you are a member of a certain organisation like the Automobile Association of India. This concession is not offered by all insurance companies.

The above-mentioned factors are considered when calculating premiums for either a new or pre-owned bike. While there are myriad options to choose from, a two wheeler insurance premium calculator can help you zero down the available options while keeping the premiums in check. Avail the best policy with suitable coverage for optimal benefits.

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