While Goods and Service Tax (GST) has been implemented with the purpose of One Nation, One Tax’, it is hard to deny the fact that it has increased the prices of some items and services as well. Insurance policies are one of them. The GST on your two-wheeler insurance policy has been increased from 15% to 18%. It means, now you would have to pay more premium to get two-wheeler insurance cover.
Unfortunately, in a country like India, where around 75% bikes are running without insurance, this hike may dissuade more people from buying it. Even those who have bike insurance, they may think of either removing the coverage completely or shrink their two-wheeler insurance cover.
But there is no reason to fuss over premium hike and think of scrapping it, as it plays an important role by covering you and your vehicle against losses or damages which are common to happen when you are on Indian roads. Further, it secures you against third-party liability as well. Moreover, you would have to cough up Rs 2,000 if you are caught riding your bike without insurance.
So, instead of panicking, here are some useful ways through which you can keep your two-wheeler insurance premium rates under check even after GST hike without trimming your two-wheeler insurance coverage=
- Increase deductible= You can cut your two-wheeler insurance premium rates by increasing your deductible limit. In the insurance world, the deductible is the amount that you would have to pay from your pocket at the time of claim before the insurer kicks in. Let’s say; you have a deductible of Rs 5,000. It means, if there is a claim of Rs 10,000, you would have to pay Rs 5,000 before the insurer settles the remaining amount.
It means, by increasing your deductible, you are giving your consent to share the burden of claim with the insurer, who would be interested in rewarding you with low insurance premium rates for your ‘gesture’.
Note, with a deductible; you agree to share the claim burden with the insurer, so make sure you choose that deductible amount which you can afford. There is no point in having a two-wheeler insurance if you would have to pay a substantial claim amount from your pocket.
- Go with long-term two-wheeler insurance policy= In order to insulate yourself from the yearly premium revisions, it is worthwhile to go with a long-term two-wheeler insurance policy which freezes your premium for two or three years in one go. It means, by paying a premium for once, you can get the coverage for a good number of years in one go.
Further, as Insurance Regulatory and Development Authority of India (IRDAI) usually revises premium rates every year, you can shield yourself from this hike by opting for a long-term two-wheeler insurance policy.
Moreover, by saying yes to long term two-wheeler insurance policies, you can keep yourself away from the hassles of paperwork and administrative procedures.
- Stay away from filing fender-bender claims= Even though, the purpose of bike insurance is to help you at the time of loss/damage, it is strongly advised to stay away from approaching the insurer for every small claim. Irrespective of how big or small your claim amount is, your every visit to the insurer would turn your No Claim Bonus (NCB) to zero.
As NCB is like a reward paid to you by your two-wheeler insurance company for not filing a claim in a policy tenure, which can help you fetch low premium rates in subsequent years, approach the insurer only when the claim amount is big enough to trouble you financially.
Here is how much NCB you can earn (and lose too!) by not filing a claim=
Source: The Economic Times
- Install anti-theft mechanisms= Installing safety features in your motorcycle would not only keep your vehicle safe from thieves, but it would also help you in getting easy premium rates. Two-wheeler insurance companies in India love those policyholders who take every step to protect their vehicles from thieves and therefore, they reward such people with exciting discounts.
You can further get discounts if you are associated with professional bodies, like Automobile Association of India and Western India Automobile Association, etc.
- Transfer your NCB= If you are buying a new motorcycle by selling the old one, don’t forget to transfer your NCB from your old bike. As NCB is linked to a policyholder and not his/her vehicle, it is feasible to transfer the NCB to your new vehicle and get easy premium rates. Even if you are not interested in immediately buying a two-wheeler after the sale of your old one, you can always reserve your NCB for the maximum three
- Furnish correct details= It’s a no brainer that a two -wheeler insurance company carefully check your insurance policy form and take utmost care in processing your age, profession, the mileage you maintain, etc.
While scrutinising your profile, if it matches with a person who makes optimum use of the vehicle and is less prone to accidents or damages, the two-wheeler insurance company would be happy to extend you discounts.
Note, this is a decision which is at the disposal of a two-wheeler insurance company and therefore, you should stay away from hiding any material fact from the insurer as parameters like age, occupation, etc.; can fetch you discounts!
- Renew policy before the due date = You might still be in a GST shock, however, it’s time to come out of that shock and renew your two-wheeler insurance policy before time. In case you delay in renewing your policy, it will lapse, and you would have to start on your two-wheeler insurance policy all over— it means paying extra to get your vehicle inspected again. Also, a lapsed two-wheeler insurance policy means, your NCB will become zero.
Just like demonetisation move, the GST has been implemented with good intentions. So, instead of fretting over the premium hike, keep your two-wheeler insured even if it means, shelling out some extra premium. Remember, the benefits offered by a two-wheeler insurance policy are far above the premium that you would require paying!