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How is the two-wheeler insurance premium calculated

​Insurers consider several factors when calculating the insurance premium for a two-wheeler. These factors include the model of the bike, its age and condition, the place it is registered and more. Hence, the insurance premiums of two bikes may vary despite opting for similar policies from the same insurance company.

An insurance calculator helps in determining your two-wheeler insurance premium in a matter of minutes. Keep reading to know about the various factors that affect your scooter insurance premium amount. Also, learn how it is calculated by insurance companies.

Third-party scooter insurance premium: How is it computed?

In India, there are two types of two-wheeler insurance options—third-party insurance and comprehensive insurance.

A bike owner must purchase third-party insurance. The IRDAI (Insurance Regulatory and Development Authority of India) decides the premium of third-party two-wheeler insurance policies.

To calculate the scooter insurance premium, the IRDAI considers the cubic capacity of your bike engine. For example, for the financial year 2019-20, the annual third-party insurance premium is fixed at Rs 482 for scooters with an engine capacity below 75cc. On the other hand, the premium for two-wheelers with cubic capacity within the 75cc and 150cc range is Rs 752. Also, the IRDAI hikes the premium by about 10% to 20% every year.

Comprehensive bike insurance premium: How is it calculated?

Comprehensive scooter insurance is more complicated to calculate compared to third-party insurance. Thus, many people use an online insurance calculator to calculate the premium of comprehensive two-wheeler insurance. Moreover, many other factors are considered when calculating the premium of such policies. That is because these plans provide coverage for personal damages as well. Let's know more about these aspects.

Factors affecting comprehensive bike insurance premium

Several factors come into play when calculating the comprehensive scooter insurance premium. Some of them are:

1)    Bike model

The insurance premium of expensive two-wheelers is higher than those of standard bikes.

2)    Year of manufacture of your bike

The Insured Declared Value (IDV) of your bike reduces with age. It means the older your bike gets, the lower will be the IDV, thus, reducing your two-wheeler insurance premium.

3)    Engine capacity

The insurance premium of bikes with greater engine capacity is higher than two-wheelers with lower engine capacity.

4)    Owner profile

In some cases, insurers consider factors such as years of riding experience, gender, and age of the owner to calculate the scooter insurance premium.

5)    Voluntary deductibles

When purchasing or renewing two-wheeler insurance, many insurers offer the option of deductibles. If you opt for higher deductibles, you may have to pay less insurance premium. However, in such situations, you may end up spending more on bike damage repairs than otherwise.

6)    No Claim Bonus (NCB)

The benefits of the No Claim Bonus (NCB) can be availed by bike owners who do not file any claims during the policy period. The NCB starts from 20% in the first claim-free year and can go up to 50% in the fifth claim-free year. Two-wheeler insurance premiums are calculated after factoring in the NCB.

7)    Add-ons

Depending on the add-ons you opt for, your bike insurance premium goes up. Among add-ons, you can choose the accessory cover, passenger coverage, and medical cover.

8)    Safety gear

If your bike is fitted with Automotive Research Association of India (ARAI) approved safety gear, your insurance premium reduces.

Online two-wheeler insurance premium calculator: Why use it?

An online scooter insurance calculator helps to calculate the exact premium of an insurance policy that you are looking to purchase. It helps to compare multiple policies from the same insurer or different insurers and determine the premium amount under different policies.

Also, it comes in handy while customising your policy as per your needs. It means you can adjust the variables such as add-ons, NCB, and voluntary deductibles, and check premium options.

Overall, a premium calculator helps you to choose an insurance policy as per your budget and requirements.

How to use an online two-wheeler insurance premium calculator

When using a scooter insurance premium calculator, you should start by entering the mandatory details. These include voluntary deductibles, NCB, IDV, and the bike model. Thereafter, you can know the exact premium amount. For calculation accuracy, make sure you enter the details correctly before submission. Always compare the premiums of different policies and opt for the one that offers the best value for your money. A two-wheeler insurance premium calculator is an easy way to get the best insurance quotes.