Are you fond of bikes? If yes, then getting a new one can be like a dream-come-true moment for you. The feeling of becoming a bike owner from a potential buyer of a bike 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.
More often than not, bike owners find themselves on the counter hooks while making a choice 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 minimum, it is a good idea to consider a bike repair. But you might want to file a bike insurance claim if the damage is serious and you believe it can cost a hefty amount of 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 of causing 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 starts impacting your claim history. Also, you are likely to feel its impact at the time renewing the premium.
No insurance provider wants to have a customer who is likely to file multiple claims. Most providers, in general, consider such customers as risky assets.
Any insurance involves risk, and a beneficiary needs to pay a higher premium if the provider of their bike insurance policy thinks it to be high enough for it. Again, this is not to say that you cannot go ahead with filing 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 that corresponds 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 on your own? 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 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 making a claim for the repairing your bike makes sense only when the damage is serious enough to amount to a significant gain from the insurance policy. Otherwise, it is in the best insurance of a bike owner to avoid it.
Avoid small claims to reduce bike insurance premium
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 the claim history of their client.
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 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? Going by what most experts say, bike insurance is mandatory as not getting it can lead to legal consequences. However, by adopting a smart approach, you can think about minimizing the financial burden of paying a costly premium every month on you.
A comprehensive bike insurance policy consists of multiple inclusions. From repairs due to accidental damage to natural/man-made calamity or theft, it provides coverage for multiple expenses without which things can go haywire for you in terms of your finances.
If you have zero depreciation, filing an insurance claim might look like a profitable deal to you as you can claim the maximum benefit. But in practical terms, the truth is just diagonally opposite to it. And you would come to know 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 the owners of bikes to get a maximum discount with regard to its insurance policy. Speaking of it, it is cumulative by nature. In technical terms, it is inversely proportional to its value. That is to say, the lesser you use it, the better. With minimum use, it keeps accumulating over time.
At present, 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 in the form of a reduction in the monthly insurance premium.
As far as the value is concerned, it keeps rising up 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 as you do not file for a claim. It leads to an exponential benefit in the subsequent months.
A lower premium in the subsequent months is a better deal than a one-time financial assistance for mending your bike
Most bike insurance policy holders fail to differentiate between the value of reduced bike insurance and 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 with regard to its monthly premium.
While this move may necessitate you to pay out of your pocket for multiple minor repairs, it will ensure that you do not keep paying a higher premium. At the end of the day, it will not only benefit your finances but also help you in maintaining a clean driving record in the database of your insurance service provider.
At present, owning a bike and having an insurance policy is like the two sides of a coin. And no one understands it better than someone who actually owns a bike. More than what you pay at the initial stage of buying an insurance policy, paying the monthly premium can be an even bigger headache for you. Having a good track record of no bonus claim in the record books of your provider is the only way in which you can reduce the liability of paying the premium on bike insurance. Not filing a claim for minor damages every now and then is the sure-fire way to attain this goal.