Overview on Buying an Insurance Policy for Your Old Motorbike

Riding a motorbike is not only fun in India instead it is considered one of the best means to commute. Though you can get out of traffic easily with your two-wheeler, sometimes it can be dangerous as well. So, the government has mandated to have at least third-party two-wheeler insurance before riding your bike on the roads. If you have recently purchased a two-wheeler, you do not have to worry then as you can get its insurance plan separately as the bike dealer himself will offer an insurance plan for your bike. But, what should you do when you have to buy insurance for your old two-wheeler?

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In this article, we will provide you a brief overview of purchasing an insurance policy for your old two-wheeler.

What is Old Bike Insurance?

We all know that old motorbikes are not safe to ride unless we take their good care. When you have a two-wheeler that is more than 10 years old, you should consider it old. Even though in two-wheelers, the depreciation starts soon after you purchase it. Purchasing insurance for a two-wheeler that is old and the depreciation value are referred to as old two-wheeler insurance. You can buy two-wheeler insurance online, which can be comprehensive or third-party.

Why Is It Necessary to Insure an Old Two-Wheeler?

You should purchase an insurance policy for your bike for protecting it against the risks of:

  • Damage of the bike because of fire and any other event that is beyond control.
  • Liability can arise because of any damage to a third-party property due to some accident that involves your two-wheeler.
  • Theft
  • Liability can arise because of any bodily injury to a third-party due to an accident that involves your motorbike.

Points to Keep in Mind About Old Motorbike Insurance:

Here are a few points that you must keep in mind while buying an insurance policy for your old motorcycle:

  • There is no grace period: There is no grace period for two-wheeler insurance policies. This means that if your bike insurance policy is expiring on 10 March 2021 and you pay the renewal premium on 11 March 2021, this policy is considered as lapsed and you can renew it only after going for a physical inspection of your bike. To keep the insurance policy ongoing, you should renew it on regular basis, which can be annually or once in three years as per you’re the period of your policy. However, if you meet with an accident with your bike when the insurance policy is not in force, you may lose a huge amount in bike damage, paying compensation in case of damage of third-party due to collision, or personal injury.
  • Depreciating Insured’s Declared Value of Bike: The older your motorbike is, the lesser its Insured’s Declared Value (IDV) is. IDV is the maximum sum assured that the insurance provider fixes as per the bike's current market value and it pays this amount in case of complete loss or theft of your motorbike. The IDV is calculated by subtracting the depreciation value from the selling price of the bike maker. If you have fitted something in your bike that was not provided by its manufacturer, its depreciation and price is calculated and then added to the IDV of your bike separately. So, if you have recently purchased a bike, then its IDV would be almost the same as its purchase price as it is a new vehicle currently. However, with time, the factor of depreciation is added and the sum assured goes down. The depreciation is estimated according to the below-mentioned table:

Vehicle’s Age

Depreciation

Less than six months

5%

Between six months and one year

15%

Between one to two years

20%

Between two to three years

30%

Between three to four years

40%

Between four to five years

50%

After five years, the IDV of the vehicle is calculated as per the mutual agreement between the bike owner that is you and the insurer, and is not as per the depreciation value. In such a case, the insurer appoints a surveyor for evaluating your bike's condition and determine its cost.

  • Lower Premium: You can think that with the age of your two-wheeler its insurance goes up. This is not true because, with the downfall in IDV, the value of the insurance of your vehicle also goes down. However, this does not say that you should show a lower IDV of your bike for paying a lesser premium. This is because in the case of lower IDV you will not be able to claim more than IDV in case of an accident even if the real cost of your two-wheeler is more than that. Therefore, you must mention the correct age of your bike and adjust its IDV accordingly.
  • Options for Add-Ons: By paying a slightly higher premium, you can add some rider benefits in your bike insurance policy wherein you can get the coverage for registration amount and road tax. In this way, you can add total coverage for your two-wheeler that is up to 15 years old. For different add-ons available for your bike, you can check with your insurance provider. You can reduce your two-wheeler’s insurance premium without lowering the coverage of your policy by making smaller claims and avoiding any modifications to it.

Factors Deciding the Premium of Your Old Bike

The premium of any two-wheeler is calculated as per its IDV, accessories fitted on it, past claim experience, etc. However, for an old two-wheeler, the insurance premium is based on the following factors:

  • The capacity of the engine of the two-wheeler
  • Bike’s Insured Declared Value
  • The age of the two-wheeler
  • Two-wheeler’s No Claim Bonus.

The Bottom Line!

A bike insurance policy gives you a sense of security despite the age of the vehicle or it is old or new. It makes sure that have complete peace of mind from various damages that occur because of unfortunate events like theft or an accident. You should get the insurance of your bike for enjoying every ride by knowing the fact that you are fully covered.

Written By: PolicyBazaar - Updated: 20 July 2021
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