Factors To Consider When Calculating Bike Insurance Premium

Today, most insurers have digitised their services, allowing you to buy bike insurance online on their official website. They also let you calculate bike insurance premiums on their website to ensure you make an informed decision.

Although these calculations are done in real-time and extremely quickly, a lot of factors come into play when deciding your bike insurance premiums. Let us discuss what factors your insurance provider considers while calculating your bike insurance policy premiums.

What are Premiums Under Insurance for 2-Wheelers?

A bike insurance premium is an amount that the insured party pays against the coverage they get from their bike insurance provider. Various considerations and calculations are involved in calculating this amount.

You can also get quick estimates using an online two-wheeler insurance premium calculator.

Factors To Consider When Calculating Bike Insurance Premiums

1.      Bike Make and Model

The logic is simple: the more expensive the bike, the more expensive your premium and vice versa. That is because expensive bikes have high replacement and repair costs.

2.      Cubic Capacity 

A new bike insurance calculator also considers your bike’s cubic capacity when calculating your two-wheeler insurance premium. The cubic capacity is the volume of the engine cylinder your bike has, which affects its speed, power and fuel efficiency.

The higher the cc, the more powerful your engine. Insurance companies create insurance brackets for engines, and the premium rates are bifurcated based on the risk. So, engines with higher CC will be charged comparatively higher premium rates.

3.      How Old is Your Bike?

Your bike age has a significant impact on the premium you pay. The following are the aspects that affect the age of bikes-

●        Depreciation

Your bike is a depreciating asset. Your insurance provider will consider this factor while calculating your premium. Usually, the calculation of depreciation starts less than six months after you purchase your bike.

If any additional accessories are added to the vehicle for enhancement, the depreciation for those is also considered. So, as your bike gets older, its current market value reduces, so the older the bike, the less premium charged.

●        Replacement and Repairs

The insurance company also considers replacement and repair costs when calculating your bike’s age. Sometimes, people love to maintain their old bikes, which may involve replacing parts that are not easily available.

The cost of replacement might be higher if those parts are no longer widely available. So, such calculations are considered while calculating the premium.

●        How Well is Your Bike Maintained?

The condition of your bike also determines its age. For instance, if you ensure regular maintenance of your bike and have decent mileage, you will be charged a low premium. But if you are a harsh driver and do not take care of maintenance and have more mileage, you will be charged a high premium.

4.      Insured Declared Value

The IDV of your bike insurance is the amount your insurance provider shall pay in case of a total loss, therefore impacting the premium. The IDV is calculated based on the present market value of your bike minus depreciation. This calculation also involves any modification done and its depreciation.

So, if the motorcycle’s current market value is calculated to be high, then the premium charged will also be high and vice versa.

It is important to ensure that the IDV calculation is just right; if it is high, then you would have to pay a high premium. If you calculate it low, then in case of theft, the amount compensated will also be low, which can be a loss for you.

Steps to Calculate Bike Insurance Premium Using Calculator?

1. Go to the official website of any bike insurance provider you choose.
2. Then, use the search bar or options available under the topmost menu to find the bike insurance option.
3. Then, you need to choose whether you are buying bike insurance for a new bike or an existing one.
4. If you are taking an existing one, then provide the registration details directly. If it’s new, your provider will usually ask you for the bike details first.
5. Once you input all the details for whatever options you choose, you will get your quotes, which you can compare then and there. These quotes are the premium calculations based on the details you have provided about yourself and your bike.
6. You need to compare, add and delete add-ons and required coverage and match the budgeted amount you have for your bike insurance policy.
7. Once you have made an informed decision about your bike insurance, you need to make the insurance payment using a relevant mode of payment.
8. After payment, you will receive an e-copy of your bike insurance policy at the email address you provided.

Conclusion

Other than these listed factors, the insurance for 2-wheeler premiums is also affected by factors like location, no claim bonus, deductibles, add-on covers you take, etc. So, even if the IDV is not under your control, you can still lower your premium by maintaining and installing anti-theft devices on your bike.

Today, you can also make your online bike insurance payments via your insurance provider’s website. Most online providers like Tata AIG also offer a 2-wheeler insurance premium calculator on their website that allows you to estimate potential premium rates for the policies you’ve selected.