When Should You Get a Comprehensive Motorcycle Insurance?
Reading Time: 7 mins.
Whether your bike is for your everyday commute, a weekend leisure playmate, or an essential means for your business, an insurance cover is needed to protect it from the many possible hazards on the road.
Before we delve into reasons why you need to take a comprehensive bike insurance policy, let’s briefly discuss the types of motorcycle insurance plans offered by the insurance providers.
Third Party Policy
Well, if you are from Singapore, the country will require that you hold at least a liability coverage for your bike. A liability coverage, together with the Third-Party policy Only (TPO) Insurance, are the least forms of insurance policies, covering the third party for death, injuries, and property damage caused by your bike.
What your third party only motorcycle insurance won’t cover is any damage on your bike due to accidents or ‘carelessness’.
Third-Party Fire and Theft
Thoughts about the many risks ownership of a motorcycle presents, bring a desire to hold more insurance covers.
A popular choice bike owners go for is the extra premium Third Party Fire and Theft (TPFT) insurance policy. This covers everything included in your Third-Party Only Insurance policy, as well as your bike’s market value in case it is stolen or damaged by a fire. Premiums are definitely higher compared with the Third-Party policy Only cover.
Comprehensive Bike Insurance Policy
Then there is the fully comprehensive motorcycle insurance policy. It’s described as the policy that gives bike owners peace of mind when it comes to bike security.
The comprehensive insurance policy covers on both the TPO and TPFT policies, plus any other damage on your owned motorcycle.
Since it’s the policy that offers a full coverage, most banks and credit corporations recommend this type of policy if you are borrowing to finance a motorcycle purchase.
Factors Affecting the Prices of the Insurance Policy.
Bike owners pay different premiums based on varying features of their motorcycles. Your motorbike insurance premiums will fluctuate due to these aspects:
The insurance policy premiums are perceptibly costlier for younger motorcycle owners. It’s probably because insurance companies view you as more inexperienced. Younger riders also tend to be reckless and the risk of crashing a bike is higher.
Type of Bike
Premiums for sport bikes are higher priced compared to street bikes. Since sport bikes are purposely built for speed, they are considered more powerful and any rider/owner will probably ride it fast.
Riding fast translates to higher risk of accidents, injury or death (for the rider or third party) at worst. This in turn results in higher insurance costs. Also, the more expensive the bike, the more it will cost to repair, hence premiums are high.
Bike Year of Registration
It only makes sense that older motorcycles, compared to newer ones, present a higher probability of failure, especially if they are poorly maintained and not well taken care of. They are also more likely to cause fatalities or injuries. Thus, insurance companies will naturally increase the premiums to offset the high risk of loss.
Type of Usage
Bikes for commercial use will be charged higher annual premiums compared to personal bikes. That’s why insurance companies will inquire about the exact use for your bike before approving a policy for your bike registration.
No Claim Discount (NCD) and Previous Claims
If you have a history of many claims, then your insurance policy premiums are likely to be higher.
As an insight, No-Claim Discount refers to an entitlement given if a policy holder has not made any claim under their policy for more than a year under the existing insurer. You can think of it as a credit given for being an excellent rider for that year.
In Singapore, you get a 20% maximum NCD or NCD20 after 3 years of consecutive safe riding without any claims. DirectAsia offers NCD30 for its members.
What Risk Events Does a Comprehensive Motorcycle Insurance Cover?
A comprehensive motorcycle insurance policy is not mandatory but comes in handy as a risk mitigation tool. It will however be necessary to your lender if you have leased the bike or hold a loan entitled to your motorbike.
A comprehensive insurance covers on accidents with vehicles, and other objects, and more including:
- Fires and explosions
- Natural disasters
- Collision with animals
- Falling objects
When Is a Fully Comprehensive Motorbike Insurance Necessary?
As a bike owner, you depend on that two-wheeler for a lot. That’s why a comprehensive insurance is very important. Unlike other insurance policies, the comprehensive bike insurance additionally covers for your bike’s repair costs in the case of damage from external effects and accidents irrespective of whether other vehicles or motorbikes are involved or not.
Below are instances when a comprehensive insurance is essential:
When financing your bike from a dealer
Not everyone has enough capital to pay the wholesome amount at a go for a new bike, especially for the expensive and powerful ones. This necessitates the need for an eternal financier. We are talking about securing a bank loan or loans from credit facilities.
Most of these institutions will not issue a loan if there is no monetary security for their investment. Therefore, you can opt for a comprehensive insurance cover as a protection for the bank’s investment in case the loan is defaulted.
When you know that the cost of damage could be very high compared to the cost of comprehensive coverage.
If you are driving an expensive motorcycle and/or a new one, you know that any heavy damage to your motorcycle due to an accident could cost you dearly and going for a comprehensive coverage is a better option. If you are a new driver who lacks driving experience, then also going for a comprehensive coverage is recommended.
If you are someone who spends more time on the road, then comprehensive coverage is the best option as the chances of accidents and damage to the two-wheeler are more.
How do I Select the Best Motorbike Policy?
DirectAsia Insurance provides specialized insurance guidance and a No-Claim Discount of 30% (NCD30) while still listening to your requests so that you are offered all you need for comprehensive coverage. We personalize the needs for your car or bike, providing decent premiums tailored to your specific requests as compared to other providers.
Our policies are written in clear and simple language easily understandable by all, including non-natives. This way, you can skip the confusing jargon that comes with insurance policies.
Besides, we have a 90% customer satisfaction rate so be assured for the best service from this award-winning global insurance provider.