What Is Basic Own Damage Premium in Bike Insurance?
New Delhi : A basic own-damage insurance policy provides financial assistance while repairing damages to your own bike if you meet with any mishap while driving. However, it is mandatory to calculate the premium before purchasing an online bike insurance plan to keep away from additional financial burden every month.
Steps to Calculate Own Damage Premium
You can calculate own damage premium of your vehicle using the formula below:
Own damage premium = IDV X (Premium Rate) + (Add-Ons) – (Discount & benefits)
However, after calculating the value, if you find the premium to be beyond your monthly budget, then you can opt for several measures to reduce it significantly.
Ways to Reduce Own Damage Premium
You can use the ways below to reduce own damage premiums significantly:
- Customize your vehicle’s IDV –
You can customise your vehicle’s IDV as per your choice so that the premiums are significantly lowered and become affordable for you.
- Increase voluntary deductibles –
Voluntary deductibles refer to the extra amount that you agree to pay while making a claim. So, if you increase the same, you will have to pay a lower premium for your policy.
- Remember to transfer your NCB –
You must remember to transfer your NCB while purchasing or renewing your own damage insurance policy to get a significant discount on premiums.
Additionally, you must be aware of certain factors that prominently affect the premiums of own damage policies.
Factors Affecting Own Damage Policy Premiums
Below are certain factors that significantly affect own damage premiums:
- Vehicle’s age –
It has been observed that the premiums of new bikes are substantially higher than that of older bikes.
- Make and model of your bike –
If your bike has advanced features, then the own damage premiums will be significantly higher than a bike with less advanced features.
- City of bike registration –
The premium of bike insurance is higher in some cities than others.
- Installation of safety equipment –
If you install safety equipments in your vehicle, the monthly premiums will be significantly less compared to a vehicle without additional safety equipments.
- Voluntary deductibles –
A vehicle owner opts for the voluntary deductible amount at the time of policy purchase, which can significantly affect the premiums.
- Owners with AIAA membership –
If you have an AIAA membership, then your bike insurance policy premium will be comparatively lessDer than a bike owner who does not have an AIAA membership.
- Increased add-ons –
The premium of your own damage policy will increase if you opt for several add-ons. Hence, you must opt for them only if they are necessary to serve your need.
- Bike’s speed –
If the top speed of your bike is higher than others, then the own damage premium for your bike, too, will be higher than others.
Now you must have a clear idea about basic own damage insurance premiums, their calculation, and how you can reduce them. This will assist you to decide the online bike insurance policy to purchase so that the premiums payable do not disrupt your monthly budget.