How to Calculate Two-Wheeler Insurance Premium?
18 May 2018
Bike insurance is a must for all owners of a two-wheeler. Buyers can pay a monthly sum and get cover for vehicle damages and repair costs. The cover acts as a buffer against unnecessary expenses incurred during regular servicing as well as damages due to accidents.
Many insurance vendors offer two-wheeler insurance online. You will also find several online websites that compare offers on bike insurance. It is important that you compare the rates of different policies before buying one. Online websites also contain a feature known as the premium calculator.
You can calculate the premium of your two-wheeler insurance by providing the required details. Many factors affect the premium you pay for a bike insurance. Here, we discuss the parameters required to calculate monthly premiums and how they affect its rate.
1.Insured Declared Value:
An Insured Declared Value or IDV is the net amount you receive from the insurance company. This is also the sum insured agreed between your insurance providers and you. In case of theft, damage or burglary, the insurance company reimburses you with an amount equal to the IDV.
2.Cubic capacity of the engine:
You need to know the cubic capacity of the engine to calculate premium on your bike insurance. If you have a two-wheeler whose engine’s cubic capacity is greater than regular models, you will have to pay a higher premium. For instance, bikes with engine capacity of 75 cc or lower have a premium of INR 569. On the other, if you own a two-wheeler, whose engine’s cubic capacity exceeds 350 cc, you have to pay a premium of INR 1,019.
If you live in a metropolitan city like Mumbai, Delhi, or Bangalore, the premium of your two-wheeler insurance will be high, this is because the volume of traffic is high in metropolitan cities. This also means that the frequency of damage to the bike is also higher. On the contrary, if you are a resident of 2-tier cities like Pune, Ahmedabad or Lucknow, you pay a lower premium. Location is an important parameter for premium calculation.
4.Manufacturing year of the two-wheeler:
Older bikes have low IDV and hence attract lower premiums. For example, if the bike is only 6 months old, the IDV is estimated to be 95% of the ex-showroom price. Since a new two-wheeler has higher IDV, you will have to pay a higher premium.
If your bike is 4-5 years old, the IDV is calculated to be only 50% of the ex-showroom price. Hence, you pay a lower premium.
You can easily buy or renew your two-wheeler insurance online by providing the parameters mentioned above.