There are many ‘firsts’ in our lives and these are always special and their emotional value does not seem to diminish with time. Take for example – your first job, paycheck, friend, bike, etc. However, the physical value of things become lower with time.
Let’s talk about your bike that may be getting older. Whatever the emotional connect but the fact remains that as your bike goes through the miles with you, it’s value in terms of money depreciates. Even if it is well maintained, as your bike gets older, repairs can get more complicated and expensive. Hence it is important to keep your bike insured even when it is older.
Insurance is not only important for financial security but also for legal protection. So, it is crucial that you understand all the factors involved. Now, if you are wondering why does bike insurance go down as your two-wheeler gets older? And what are the factors that may impact the insurance premium for older bikes? Let us explain in detail
But first, let us talk about the advantages of keeping your bike insured even if it is older:
To purchase a bike insurance policy for your old bike is important in order to keep you safeguarded against expenses arising from:
- Vehicle theft
- Frequent breakdowns and wear & tear
- Damages caused due to an accident
- Damages caused due to fire, man-made or natural calamities
- Liability due to injury, damage to property or unfortunate death to any third-party caused by your vehicle
- Accident that may result in death or bodily injuries while riding your bike through the mandatory Personal Accident cover (PA)
Factors that impact the insurance premium for older bikes
- The engine capacity of the two-wheeler
- Insured Declared Value (IDV)
- Type of insurance coverage
- Year of manufacture
- Any accumulated No Claim Bonus (NCB)
All these are the primary factors that impact the insurance premium for older two-wheelers. It varies from insurer to insurer to calculate these factors differently.
What causes the bike insurance cost to go down as your bike gets older?
As your bike gets older, its market value diminishes due to the regular wear and tear of the parts. This diminishing of value due to the process of regular wear and tear is known as Depreciation. So, higher the depreciation, the lower your bike’s value.
When you insure your bike you need to fix the Insured Declared Value (IDV), which is one of the key factors affecting your bike insurance premium and is directly proportionate to it. Due to depreciation, the market value of your bike will be lower hence you will have to go in for a low IDV which ultimately means you will have to pay a lower premium. On the flip side though, having a lower IDV means that your bike’s overall coverage will also be low.
Pro tip: Your bike insurance premium may further decrease if you claim the benefit of a No-Claim bonus (NCB) for a claim free year.
What we have found out today is that as your bike gets older, it requires extensive coverage to maintain a good working condition. However, due to depreciation the market value of your bike decreases and so does your insurance premium. To make sure you can get a comprehensive cover for your bike, make sure to choose, compare and buy through the Bajaj Finserv App.
Anywhere, Anytime insurance with the Bajaj Finserv App
The Bajaj Finserv App is a high utility App that takes care of all your financial needs including insurance. On the app, you can explore bike insurance plans from our trusted partners. Here you can view product features, compare prices and purchase a plan that is best suited to your needs. All this in a matter of minutes on our 100% digital platform and from the comfort of your home. It truly is becoming the new way to buy insurance.