Is Bike Modification Impact Two Wheeler Insurance Premium?

Two-wheeler insurance is mandatory by law in India. It provides financial coverage in case of accidents, theft, or damage to the vehicle. The cost of two-wheeler insurance depends on various factors such as the make and model of the bike, age of the bike, the geographical location of the owner, and the insured declared value (IDV) of the bike.

There are two types of two-wheeler insurance policies available in India - third-party liability insurance and comprehensive insurance. A third-party liability insurance policy provides coverage only for damages or losses caused to a third party. On the other hand, comprehensive insurance covers damages to the bike as well as third-party liabilities.

Let's take a closer look at how bike modification impacts two-wheeler insurance premiums.

How Does Bike Modification Impact Two-Wheeler Insurance Premium?

Bike modification is the process of changing the original parts of the bike to enhance its performance or appearance. Bike modification can include adding accessories such as alloy wheels, LED lights, or installing a new exhaust system.

Any modifications to the bike can impact the cost of the two-wheeler insurance premium. Here's how:

• Insured Declared Value (IDV) –

IDV is the maximum amount that the insurance company will pay in case of theft or total loss of the bike. The IDV is calculated based on the manufacturer's listed selling price of the bike and the depreciation value. Any modifications to the bike that increase its value will also increase the IDV, and subsequently, the insurance premium.

• Risk –

 Any modifications to the bike that affect its performance or safety can increase the risk of accidents. This can lead to a higher insurance premium as the insurance company will perceive the modified bike as a higher risk.

• Parts –

 If the modified parts are expensive or not readily available, it can lead to higher insurance premiums. Insurance companies consider the availability and cost of the parts before calculating the premium.

• Usage –

If the modified bike is used for racing or other high-risk activities, the insurance premium can be higher.

• Legal Requirements –

Any modifications that are not legally permitted can result in the insurance policy being null and void. This means that in case of an accident or loss, the insurance company will not provide any coverage.

Factors that Affect Two Wheeler Insurance Premium

Apart from bike modification, there are various other factors that affect two-wheeler insurance premiums. Here are some of the main factors:

1. Age of the bike –

Older bikes may have a lower IDV and hence a lower premium.

2. Geographical location –

If you live in an area that is prone to accidents or theft, the insurance premium will be higher.

3. Make and model of the bike –

 Expensive bikes with higher engine capacity have a higher premium.

4. Add-ons –

Additional coverage such as personal accident cover, pillion rider cover, and zero depreciation cover can increase the premium.

5. No Claim Bonus (NCB) –

 If you have not made any claims in the previous policy year, you can avail of a discount on the premium.

FAQs

1. Does every bike modification impact the insurance premium?

Answer: No, only modifications that affect the performance, safety, or value of the bike impact the insurance premium.

2. Do I need to inform the insurance company if I modify my bike?

Answer: Yes, it is essential to inform the insurance company of any modifications made to the bike. Failure to do so can lead to the insurance policy being null and void in case of an accident or loss.

3. Can I get insurance for a modified bike? 

Yes, you can get insurance for a modified bike, but the premium may be higher due to the increased risk associated with modifications.

4. Will my insurance cover damages to the modified parts?

Answer: It depends on the insurance policy. Some policies may cover damages to the modified parts, while others may not. It is important to read the policy documents carefully before buying insurance.

5. What happens if I make a claim for a modified bike?

 Answer: If you make a claim for a modified bike, the insurance company will assess the damages and the cause of the loss. If the cause of the loss is due to a modification, the claim may be rejected.

6. Can I remove the modifications to reduce the insurance premium? 

Answer: Yes, you can remove the modifications to reduce the insurance premium. However, it is important to inform the insurance company of the changes made to the bike.

Conclusion

Bike modification can significantly impact the cost of two-wheeler insurance premiums. Any modifications that affect the performance, safety, or value of the bike can increase the premium. It is important to inform the insurance company of any modifications made to the bike and to read the policy documents carefully before buying insurance.

Apart from bike modification, various other factors such as the age of the bike, geographical location, make, and model of the bike, add-ons, and No Claim Bonus (NCB) also affect two-wheeler insurance premiums.

In conclusion, it is essential to evaluate the impact of bike modification on insurance premiums before making any modifications to the bike. This will help you make an informed decision and ensure that you have adequate insurance coverage in case of any accidents or loss.