Lack of knowledge may cost you a high two-wheeler insurance premium. However, by adding some knowledge you can reduce the premium for your insurance policy and save some money.
According to the Motor Vehicle Act third party insurance is legally mandatory in India. If you want to cover for the bike from any damage or loss then you have to take a comprehensive insurance policy. It will cover both its own damage section of bike and third-party damage also.
Following are some tips to reduce the premium:
1- Multiple Quotations and Discount Options
First of all, you take your RC and Previous insurance if available and ask quotations from five to six companies at least. You can ask two types of quotations – one with the same benefits from all the five to six companies and another with some different benefits.
You will find a lot of difference in their pricing of your two-wheeler quotations. Now give some time and check all of the options. Select the quotation in which you see the lowest premium with the benefits you need.
After the selection of the final quotation, you may ask your agent to provide some extra discount. Possible that your agent may take some extra discount on behalf of your good track record and NCB.
Maybe your bike is a favorable (Low loss ratio) model for the company so, you may get some extra discount. Quotation from multiple companies, Compare, check for high discount can help to reduce your two-wheeler insurance premium.
2- No Claim Bonus (NCB)
If the policyholder does not file any claim for complete policy term then the company gives No Claim Bonus on renewal. It shows that you are a safe driving person and you have driven your bike without any damage or loss for the policy year. You can accumulate up to 50% of No Claim Bonus.
So, as much as No Claim Bonus you accumulate you get the same discount. If you don’t want to pay a high premium for your two-wheeler insurance policy then always try to drive your bike safe and accumulate NCB as much as possible.
3- Purchase Multi Years Policy to Reduce Two-Wheeler Insurance Premium
This is one of the best ways to reduce your two-wheeler insurance premium. Many companies offer a multi-years policy for two-wheeler. You can purchase 2 years or 3 years of the policy. you may get some extra discount on the purchase of a multi-year policy.
You can check the premium for a one-year term and two years or three years term. If you find that you are getting a good discount and your budget is also ok then you can buy it. It will help to save some money.
4- Needful Add-On to Reduce Two-Wheeler Insurance Premium
There are several add-ons available for bike insurance. Add-on like Zero Depreciation, Return to Invoice, consumable Cover, Engine Cover, Roadside Assistance, and many others.
Please select add on cover as per your need only. If you will buy all the cover then it may be a high premium.
To optimize the premium, analyze vehicle vintage, make and model, etc and then do the selection of add on. You have a new bike or old bike also may be the criteria to choose add on cover.
5- Selection of Right IDV
This factor is a very special one for you because ultimately it is your vehicle’s current value. IDV (Insured’s Declared Value) is the current value of your vehicle which is decided after depreciation.
You can reduce your premium by reducing IDV but too low IDV is not good. What should you do? Too high IDV? Or Too low IDV? Don’t go for any one of these either too high or too low.
In one case you will pay a high premium and in another case you will pay a low premium. You analyze the details of your bike, check the resale value in the market. Ideally you should keep IDV which is best suitable for your bike.
6- Owner Driver Cover
Suppose you have two bikes in your name. One is used by you and another used by a family member.
In this case you can opt for the owner-driver cover for the bike used by you. You can avoid this cover for the vehicle which is used by your family member. However, it depends on your analysis, risk, and decision making.
7- Do Not Lapse Policy if You Want to Reduce Your Two-Wheeler Insurance Premium
Time to time insurance companies send the renewal reminders to their policyholder. However, some customers missed it and doesn’t renew on time. When they purchase the policy after a long period of lapsed policy then it cost them a high premium. Why it is?
If you do not renew the policy on time and crossed it 90 days of the expiry date of the policy then you lose all accumulated no claim bonus.
In this case you pay a high premium for a new policy because you do not have and NCB discount. You also get a high premium because some company give less tariff discount who has zero NCB.
You can understand with below chart:
|Policyholder A||Policyholder B|
|Renewed policy till five years without any claim||Continue renewed policy till five years without any claim|
|NCB = 50%||Accumulated NCB = 50%|
|6th Year renewal due||6th year renewal due|
|Renewed on time||Policy Lapsed, Date crossed 90 days, Lost NCB|
|NCB 50% and high tariff discount||Purchase new policy with 0 NCB and low tariff discount|
|Low Premium||High Premium|
This is the importance of renewal of policy on time.
8- Online Discount Options
You check insurance options online also. Possibilities you may get some cheaper policy online. Some companies offer you an extra discount on purchasing online.
It reduces their marketing expenses that’s why companies offer this discount.
9- Anti-Theft Device and Automobile Association Membership
You may get an additional discount if you have installed an anti-theft device in the bike. Possible you get an extra discount if you have the membership of the Automobile Association of India.
So, I hope all the above points are helpful for you to reduce your car insurance premium. Please don’t focus on premium only. You should also have a check on features, benefits, company, claim settlement ratio, and services.
The most important point, read all the exclusions, Terms, and Conditions of your two-wheeler insurance policy when you buy it.