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  • Factors That Influence the Cost of Bike Insurance Policy

    Factors That Influence the Cost of Bike Insurance Policy

    The number of two-wheelers on Indian roadways has increased street traffic, raising the chances of an accident. To reduce these risks, the Indian government has made it essential for every automobile owner to get insurance. As a bike owner, you must invest in goodbike insurance coverage to not just stay protected but also comply with the law (Motor Vehicles Act) and not face any monetary penalties.

    In this article, our main focus will be the aspects/factors that influence the cost of your two-wheeler insurance policy. But before that, let’s first discuss why getting a bike insurance policy is crucial. Keep reading!

    Why is Bike Insurance Important?

    Accidents are unpredictable while you are driving a vehicle. Accidents happen unexpectedly when driving. Because of this unpredictability, having insurance for yourself and anybody else who may be affected by the vehicle you drive is critical. Regarding bike insurance coverage, it protects you in two ways — against legal liabilities and financial losses caused by bike-related accidents.

    Now, two main types of bike insurance policies are available in India – third-party liability and comprehensive bike insurance. Out of these, the liability plan is mandatory. The comprehensive plan provides extensive coverage, including mandatory coverage. As a result, regardless of the plan you choose, you will receive the mandatory cover.

    What are the Factors That Affect the Two-Wheeler Insurance Costs? 

    1. The Make and Model of Two-Wheeler

    Your bike’s brand and model significantly impact the premium value of your insurance. A sports or expensive bike will have a higher insurance premium than a standard scooter or geared two-wheeler. This is because replacement and repair components are readily accessible for standard bike models. However, repairs for luxury or sports bikes would be expensive, hence expensive premiums.

    2. Type of Coverage

    Bike insurance policies are primarily of two types – third-party insurance and comprehensive insurance. Third-party insurance covers damages only associated with a third party involved in an accident.

    A comprehensive policy will include third-party and other incidents, including natural calamities, theft, fire explosions, malicious acts, burglaries, terrorist attacks, etc. Since comprehensive policies offer more, the bike insurance policy costs of those policies are relatively on the higher side.

    3. Insured Declared Value

    Your two-wheeler’s value depreciates as your vehicle ages. Depreciation also affects the insured declared value or IDV of the motorcycle, which reduces yearly. You can, however, boost the bike’s IDV by paying a greater price for two-wheeler insurance at the time of renewal.

    4. Age of Bike and Riding History

    The older your bike is, the less expensive the premium. Newer models have a larger probability of being stolen. Also, replacement components for later versions are significantly more expensive. Furthermore, modern bikes have a higher market value than older ones, which raises the IDV. Given all of this, the premiums for new two-wheelers have increased.

    Furthermore, how you maintain and use your bike affects the premiums. For example, your rates will increase if you spend more time on the road.

    5. Engine Capacity or Cubic Capacity (cc)

    The engine capacity of your bike or two-wheeler indicates the volume of the cylinders in the engine. The larger the engine, the higher its cc and power will be, and the higher the cost of maintenance. This ultimately leads to a higher premium charge for bikes with a higher cc and reduced costs for bikes with a lower cc.

    6. Add-on Covers

    These are additional features to add to your existing bike insurance policy (comprehensive bike insurance policy) costs. Examples include zero depreciation, roadside assistance, engine protection, etc. These add-ons give you more coverage than your standard insurance policy. The insurance for your bike price increases with these add-ons.

    7. No-claim Bonus

    NCB is a discount (in %) offered by insurance companies to their policyholders who do not file a claim in a given year. Your NCB discount increases with each subsequent claim-free year and is an excellent means to reduce two-wheeler insurance costs. Under NCB, one can avail of a 50% discount on bike insurance premiums.

    8. Anti-theft Devices

    It is important to install anti-theft devices, as they help protect your bike from theft and lower any risk for the insurance provider. The insurer will reward you for reducing their risk or liabilities by offering discounts on premiums and bike insurance renewal prices.

    9. Modification in Bike

    Although modifying your bike’s components might improve its appearance, the cost of your bike insurance coverage will increase to cover the expenses of these parts. Your premium payout will rise in proportion to the alterations you make to your car.

    10. Gap in the Renewal Process

    In an unforeseen tragedy, a lapse or gap in bike insurance renewal will result in financial loss. Thus, set a reminder to complete the bike insurance renewal procedure. Typically, your insurer will allow a 30-day grace period to renew the coverage. If you miss the renewal date, you must purchase new insurance coverage. This new policy’s rate may be higher because you are no longer eligible for the NCB.

    How to Calculate Premium Using Bike Insurance Calculator?

    The bike insurance calculator helps owners estimate and calculate the premium amount and the coverage their two-wheeler requires. It helps them make an informed choice about bike insurance.  
    Thus, taking note of the factors that influence the cost (of bike insurance) and entering them into a bike insurance calculator is the most effective approach to modifying the cost of a bike insurance policy. Using the online calculator for different plans will show you the approximate cost of the policy and provide you with a pricing list for bike insurance. You can then use the bike insurance price list to finalise the policy.

    Final Words

    You can lower your insurance premiums even if the factors above could impact the cost of your bike insurance policy. For example, you can purchase only the necessary add-ons, install anti-theft devices, and refrain from filing claims until necessary. Moreover, an online application called a two-wheeler insurance premium calculator or bike insurance premium calculator may be used to determine the insurance premium amount.

  • How to Minimize the Chances of Claim Rejection

    How to Minimize the Chances of Claim Rejection

    There are many scenarios where the policyholder’s nominees have had their claims rejected by insurers. While it may have been a shock to them, there are always well-defined reasons behind the same at the insurance company’s end. Here are some insights on the key reasons behind such rejections and the steps you can take as a policyholder to minimize them and ensure that your beneficiaries receive the financial assistance you wish for them.

    Reasons for claim rejection and how to avoid them in the first place

    Before purchasing your policy, you must thoroughly compare various insurance plans in the market. You must also have calculated your total premium payment and expected returns using the various online life insurance calculators. However, many people do not put the same emphasis on filling up their insurance forms and also skip reading their policy documents.

    Suppose Krishnan Sharma has a life insurance policy with a sum assured of Rs. 50 lakh. In this case, due to his untimely demise, his family files a claim for receiving this amount. However, the claim is rejected since his name in the policy document is Krishnen Sharma (misspelt). Many such cases happen on account of these minor discrepancies.

    Here are some of the most common reasons behind the rejection of claims and how you can avoid them outright.

    • Lack of awareness – Many policyholders do not read through the list of inclusions and exclusions. They remain unaware, and as a result, their nominee(s) end(s) up filing claims for events that are not covered by the policy. It equates to a serious breach of the terms and conditions of the insurance policy agreement. Additionally, several things, like waiting periods, should be kept in mind if your policy has a critical illness rider. You should carefully read the policy document while getting the plan.
       
    • Not revealing authentic information – Many people do not fully disclose vital information like their income, educational qualifications, age, occupation type, any existing insurance policies, pre-existing health/medical issues, etc. Coverage is given based on the details you provide in the insurance proposal document. Any gaps may lead to claims being rejected by the insurance company once it finds the actual facts. Be totally honest while applying for your insurance policy. Do not conceal anything since you do not want a future scenario where the claim is denied on these grounds.
       
    • Proposal form disparities – There may be several gaps in the proposal form if agents or third parties fill them. This may lead to serious issues for declarations since the policy is underwritten with the wrong information. Whenever any claim is filed, the insurance company will verify the details, and naturally, the claim is very likely to be rejected if there are any loopholes. The best solution in this regard is to fill up and check the proposal form by yourself instead of depending on any third party. Always provide authentic documents while buying your policy. Whenever you receive the document with the application form photocopy, check if there are any errors. If there are any discrepancies, immediately contact your advisor or insurance company to rectify the same. In case you are buying the policy online, make sure to double-check everything before submitting it.

    These are some common reasons why insurance companies end up rejecting consumer claims. While it is their duty to honour their commitments, they also have to uphold standards of transparency. This means that only genuine insurance claims can be honoured. That is where the policyholder also plays a part in the proceedings.

    A key metric you can look at before purchasing your insurance policy is the company’s claim settlement ratio. It is the number of claims settled by an insurer in a fiscal year against the total number of claims received in that year. It is typically represented by a percentage. You need to look for a higher claim settlement ratio, as it will signify a higher chance of settling your nominees’ claims.

    Some critical details that you should know about

    As per the Insurance Act, 1938 any life insurance policy claim (those held for at least two years) may be rejected if the insurance company proves that the policyholder had suppressed any material information or gave inaccurate and wrongful details while buying or renewing their policy.

    The industry rules are that insurance companies should settle and honour claims within thirty days of receiving all the documents. If any added verification is needed, the insurance company should finish all these procedures within six months from the claim’s written intimation. If the insurer does not settle any claim within these six months, it will have to pay interest on the amount payable to the customer.

    Conclusion

    Here are some key takeaways that you should remember while purchasing or renewing your insurance plans:

    • Always buy insurance directly from a reputed insurance company or advisor/agent. Do not forget to check the claim settlement ratio of the insurer.
    • Make sure that you fill-up the insurance proposal form yourself and double-check it before submission
    • Provide all genuine documents as required
    • Do not conceal or suppress any facts since it may lead to claim rejection
    • Make sure you double-check the application form photocopy you get with the policy document afterwards. If you find any errors, then notify your insurance company immediately to fix the same.

    These things will keep your nominees safe from claim rejections in the future. Therefore, investing a little time and effort into the process while purchasing an insurance plan is vital.