Are you fond of bikes? If yes, getting a new one can be like a dream come true moment for you. The feeling of becoming a bike owner from a potential bike buyer goes beyond words.
But what happens when it suffers physical damage? You might have to choose one out of the two options: going for a bike repair or filing an insurance claim.
Often, bike owners find themselves on the counter hooks while choosing in this regard. There is no direct answer to it. You have to consider the condition of the bike to make an informed decision.
If the physical damage to it is minimal, it is a good idea to consider a bike repair. But you might want to file a bike insurance claim if the injury is serious and you believe it can cost much money.
Filing a claim: what should you consider?
At the outset, filing a claim looks like a lucrative option, but it is not above its consequences. One of the potential downsides of it is its potential to cause damage to the claim history.
As long as you do not file a claim, you remain in the good books of your insurance provider. But as soon as you file a claim, it affects your claim history. Also, you are likely to feel its impact at the time of renewing the premium.
Any insurance involves risk, and a beneficiary needs to pay a higher premium if their bike insurance policy provider thinks it to be high enough for it. Again, this does not mean you cannot file your claim. But before you do it, make sure you do your math right.
You need to pay the “deductible” on your own. Your bike insurance provider will only pay you the amount corresponding to the difference between the actual cost and the “deductible” component. If you consider this simple calculation, you might not find filing a claim for a small amount to be profitable. Thus, it doesn’t make sense to file small claims.
What happens if you bear the charges for repairing your bike alone? Bike insurance policy providers offer a no-claim bonus (NCB) if you do not file a claim for a year. The discount from it keeps accumulating as long as you do not exercise the latter option.
Even as you file for a single claim, the value of NCB diminishes to zero, which can impact your insurance premium.
Thus, you can conclude that claiming to repair your bike makes sense only when the damage is serious enough to gain an insurance policy significantly. Otherwise, it is in the best insurance of a bike owner to avoid it.
Avoid small claims to reduce bike insurance premiums.
From the above, it becomes clear why you should not consider filing a claim despite the option of bike insurance at your disposal. Experts do not recommend it for minor damages to a two-wheeler as it can impact their client’s claim history.
But it defeats the purpose of paying the monthly premium from the standpoint of a bike owner. For them, though, it is imperative to view a bike insurance policy for their two-wheeler, a backup option for costly damages that is not to be used for minor scratches or repairs.
So, what can you do to assuage the problem? Most experts say bike insurance is mandatory, as not getting it can lead to legal consequences. However, by adopting a smart approach, you can minimize the financial burden of paying a costly premium.
A comprehensive bike insurance policy consists of multiple inclusions. From repairs due to accidental damage to natural/human-made calamity or theft, it provides coverage for various expenses, without which things can go haywire for your finances.
If you have zero depreciation, filing an insurance claim might look profitable as you can claim the maximum benefit. But in practical terms, the truth is just diagonally opposite to it. You would learn about it when you consider the element of no claim bonus (NCB), which plays a vital role in claim-related decisions.
According to insurance experts, NCB is the most powerful tool for bike owners to get a maximum discount on their insurance policies. Speaking of it, it is cumulative by nature. In technical terms, it is inversely proportional to its value. That is to say, the less you use it, the better. With minimum use, it keeps accumulating over time.
Currently, insurance providers in India go by the record of yearly claims of customers.
If you do not file claims too often in a year, it will pay you dividends in the subsequent year. They roll out the benefit to you through a reduction in the monthly insurance premium.
As far as the value is concerned, it keeps rising steadily upon no insurance claim in a year. From a 20% reduction in premium amount after one claim-free year, you can expect it to drop further by 50% if you can keep your record of NCB intact for five consecutive years.
So, with little patience, you can get the full value of not using your share of compensation for damages to your two-wheeler, even if you do not file a claim. It leads to an exponential benefit in the subsequent months.
A lower premium in the subsequent months is a better deal than one-time financial assistance for mending your bike.
Most bike insurance policyholders fail to differentiate between the value of reduced bike insurance and a reduction in premium. The former refers to a short-term gain, whereas the latter leads to long-term savings in the future.
You can find it out easily by doing your math.
It will help lower the financial liability on you from the bike insurance policy concerning its monthly premium.
While this move may require you to pay out of your pocket for multiple minor repairs, it will ensure you do not keep paying a higher premium. It will benefit your finances and help you maintain a clean driving record in your insurance service provider’s database.
At present, owning a bike and having an insurance policy are like the two sides of a coin. And no one understands it better than someone who owns a motorcycle. More than what you pay at the initial stage of buying an insurance policy, paying the monthly premium can be an even bigger headache. Having a good track record of no bonus claim in your provider’s record books is the only way to reduce the liability of paying the premium on bike insurance. Not filing a claim for minor damages now and then is the surefire way to attain this goal.