4 Important Things To Do After Buying A New Bike
- Author :
- TATA AIG Team
- Published on :
Two-wheelers are depreciating assets. They go through wear and tear and tend to lose value over time. Old bikes have nostalgic value and as long as it is running fine, many people don’t opt for a new one. In India, two wheeler insurance is a mandatory requirement. Hence, regardless of the age of the bike, you need to buy Insurance for Two Wheeler to be able to ride it on the roads.
However, when you try to buy a bike insurance policy for your old bike, you will find that it costs lower as compared to a policy for a new bike. In this article, we will talk about the bike insurance price for an old vehicle and the reasons why it decreases as the bike ages.
Is It Necessary to Buy Bike Insurance for an Old Bike?
Yes. In India, you cannot ride a bike without a valid two wheeler insurance policy. The Motor Vehicles Act 1988 has made it mandatory for all bikes to have a minimum of third-party liability bike insurance in the country. These policies offer coverage for damage to the property or life of a third party due to an accident involving your bike. However, they don’t cover damages to the insured bike.
If you want the policy to cover your bike too, then you can opt for a Standalone Own-Damage policy or a Comprehensive bike insurance policy. These policies offer coverage for damage to your bike due to an accident, collision, man-made disaster, or natural calamity. It also reimburses the Insured Declared Value of the bike if it is damaged beyond repair (total loss) or stolen.
Therefore, regardless of the age of your bike, buying a bike insurance policy is necessary in India.
How Do Insurers Determine Motorcycle Insurance Price?
The premium for a third-party two-wheeler insurance policy is determined by the Insurance Regulatory and Development Authority of India (IRDAI). It is based on the engine capacity of the two-wheeler. The current rates are as follows:However, if you are opting for a comprehensive or standalone own-damage bike insurance policy, then the insurer considers a range of factors including:
|Engine Cubic Capacity of the Bike||Third Party Two-Wheeler Insurance Premium|
|Not more than 75cc||₹538|
|More than 75cc but not more than 150cc||₹714|
|More than 150cc but not more than 350cc||₹1,366|
|More than 350cc||₹2,804|
However, if you are opting for a comprehensive or standalone own-damage bike insurance policy, then the insurer considers a range of factors including:
- The make and model of the bike;
- Its age (year of manufacture);
- Your geographical location;
- The Insured Declared Value (IDV) or the current market value of the bike;
- Riders or add-on covers;
- No Claim Bonus; and many more.
While different insurance companies might give different weightage to each point, the core factors are similar. At Tata AIG, we offer an online bike insurance calculator that can help you get an estimate of the motorcycle insurance price before making the purchase. We also offer online two wheeler insurance policies to help bike owners buy insurance without having to make rounds to the insurer’s office.
Why Does Bike Insurance Cost Reduce as the Vehicle Gets Older?
The Insured Declared Value (IDV) of the bike is the current market value of the vehicle. Since a bike is a depreciating asset, it loses value with time. This is primarily due to the wear and tear of its parts and components. The loss in value of the bike due to this wear and tear is called depreciation. As the bike gets older, the wear and tear increases resulting in an increase in depreciation. Hence, its market value or IDV decreases.
When an insurance company provides a bike insurance policy, it determines the sum insured based on the IDV of the two-wheeler. When your bike is stolen or damaged beyond repair, the insurer terms it as a total loss. In such cases, you receive the sum insured as compensation minus the depreciation and deductibles. If your bike is old, then the depreciation would impact its IDV. Hence, older bikes have lower IDVs. This means a lower sum insured, and you can get a Bike Insurance Low Price offer.
Things to Keep in Mind Before Buying Insurance for Your Old Bike
Here are some factors to consider before you purchase a bike insurance policy for an old vehicle:
Research the market and read up about different insurers and the quality of services offered by them. There are many insurance providers offering a range of bike insurance plans. Make sure that you compare providers and plans carefully before choosing.
Bike insurance policies have a lot of terms and conditions. Make sure that you go through the policy wordings carefully. Pay special attention to the inclusions and exclusions of the policy to understand the scope and extent of coverage you can get.
Understand the motorcycle insurance price based on the type of coverage you need. While a third-party liability-only policy has a fixed premium rate, if you opt for a standalone own-damage cover or a comprehensive bike insurance policy, then the premium can vary based on various factors. Use the online bike insurance calculator to estimate the premium and choose deductibles and add-on covers to customize the plan as per your requirements.
The first thing that you need to remember is that your bike needs an insurance plan regardless of its age. You can opt for a third-party liability-only policy to meet the legal requirements or a comprehensive/own-damage bike insurance policy to cover damages to your bike too. While the insurance premium is low for older bikes, the IDV is low too. Hence, make sure that you get the right coverage for your prized possession.
Frequently Asked Questions
When does motorcycle insurance go down?
As the motorcycle ages, its market value decreases and so does the IDV. Hence, the motorcycle insurance price goes down with its age.
I am looking to buy insurance for an old bike. Can I buy two wheeler insurance after 15 years?
Yes, you can purchase two wheeler insurance after 15 years. Make sure that you go through the policy documents and understand the inclusions and exclusions before signing the dotted line.