Motorcycle Insurance Guide: Choosing the Best Two-wheeler Insurance
The Ultimate Guide to Motorcycle Insurance
It is a great feeling to own a motorcycle and cruise through the busy roads (trust us, we understand) but you cannot only think about the brand or the power of the motorcycle you want to buy. Along with it must come motorcycle insurance from a reputable insurer. An investment that will help you to cover expenses should the unforeseen ever happen.
You must be thinking now, “Argh! The added hassle!”
Fret not for here is your ultimate motorcycle insurance guide. All you need to know to get started. There are quite a few options out there and to break the bubble at the very beginning, focusing on price only is not the right way to pick the right insurance. So, let’s unravel the story here. First up, we begin with the various types of motorcycle insurances.
Types of motorcycle insurance
Motorcycle insurance isn't a one-size-fits-all. Depending on your needs and budget, there are different levels of coverage that offer varying degrees of protection. From medical expenses to sharing your motorcycle with other riders, understanding what type of coverage you need helps you choose the right policy for your ride. Firstly, there are 3 types of motorcycle plans:
- Third-party only (TPO) motorcycle insurance
- Third-party, fire and theft (TPFT) motorcycle insurance
- Comprehensive motorcycle insurance
What are these about? Let’s elaborate.
Third-Party Only (TPO)
This is the most basic coverage offered by all insurers where all third-party claims are covered by the company. For example, imagine a driver loses grip on the road and causes injury to another person on another motorcycle. The insurer will then pay the bills of the injured person and his/her damaged property but the driver’s own injuries or dents will not be covered.
Such motorcycle third-party insurance carries a basic premium amount as the number of coverages are fairly limited.
Third-Party, Fire & Theft (TPFT)
As the name suggests, you get all the benefits of the TPO motorcycle insurance along with coverage for fire damage and theft of your vehicle. Someone tries to steal your motorcycle and messes up the ignition key chamber. The insurer will cover it. The store beside which you parked catches fire and your motorcycle gets damaged. The insurer will again cover the repair expenses.
On top of that, if you choose the optional benefit - 'new for old' - DirectAsia offers to replace your stolen vehicle with a brand new one of the same or similar make and model. Take note that this only applies if you lose your motorbike in Singapore or if it's beyond repair within the insurable period of your TPFT coverage.
TPFT is a compromise between TPO and Comprehensive coverage and is naturally priced somewhere in between the cheapest and the costliest.
Comprehensive coverage
This is the motorcycle insurance that covers almost everything. In other words, you get the features of TPFT along with coverage for you and your motorcycle. Continuing with the above example, both the medical bills of the driver and the injured person involved in an accident will be covered along with the damages suffered by both the vehicles. This includes vandalism and natural disasters.
The number of features and coverages naturally raises the premiums payable but the insurance benefits in the long-term make the price worth it.
There you go! We have just discussed your choices. However, before discussing the recommended motorcycle insurance coverage for you, we will have to touch upon a couple of vital parameters concerning motorcycle insurances.
1. The motorcycle insurance excess
An “excess” in motorcycle insurance is the amount that you are required to pay while making a damage claim before the insurance coverage can kick in. There are two general types:
- A standard excess
- Young/inexperienced rider excess
Insurers typically charge an excess to either help you to customise your premium plans or avert the risk that comes with inexperience.
Generally, the rates for standard excess vary depending on the insurance premium plan you choose and the excess is only payable at the time of the claim. Taking up higher excess would also result in a lower premium.
2. Motorcycle usage
Motorcycle insurance plans also vary depending on the type of use that the vehicle will see. There are plans for personal or private use, private plus commuting use and private plus business use. Insurers maintain these variations as depending on the type of usage, your vehicle will age faster or slower which, in turn, will determine how prone your motorcycle will be to accidents.
With the knowledge of excesses and types of usage, we are now ready to tackle the big question – how can you pick the right insurance? This, after all, is the core element of every helpful motorcycle insurance guide.
3. Optional Benefits
We understand that there isn't a one-size-fits-all plan that suits the needs of every rider. While basic motorcycle insurance covers the essentials, you can boost your protection with optional benefits that provide greater peace of mind. Here are some common optional benefits you can consider adding to your policy:
No-Claim Discount (NCD) Protection: Being a safe rider with good claims record, you get to enjoy a No-claim Discount that lowers your premium each year.
Personal Accident: Motorcyclist are more exposed to injuries so adding a Personal Accident cover would be a smart move to make.
24 Hour Breakdown Assistance: You no longer need to fret when your motorcycle breaks down in the middle of your journey. Roadside assistance just like the name suggests, it offers on-the-spot repairs and towing services.
Any Rider: We work to protect any unnamed authorized rider you choose to share your motorcycle with as long as they meet our criteria.
New for Old: You don't have to worry if your motorcycle is stolen in Singapore or suffers a total loss in an accident during your policy period. Your motorcycle will be replaced with the same/similar make and model.
These vital parameters of motorcycle insurance can enhance your coverage and offer great flexibility but how much you pay for your policy also depends on several factors. Let's take a look at what affects your insurance premiums.
What affects insurance premiums?
Age of the rider
In the world of automotive insurance, age is related to experience during risk calculations. Hence, motorcycle insurance for new riders who have just received their licenses and are also young will come with the highest premiums.
Type of vehicle
Sports bikes will have higher premium costs than standard street bikes. Obviously, you will not ride a sports bike at moderate speeds which increases the risk of an accident.
Age of the vehicle
Older vehicles wear out with time. Maintenance also becomes a factor on grounds of the functioning efficiency of motorcycle parts. So, insurers look at the registration date of your vehicle and hand you an expensive plan if the motorcycle is quite aged.
Number of claims you have made
Say you already had made 2 claims in the first year on the insurance. This shows the insurer that you are likely to lose grip on your motorcycle frequently and they will equate this to high risk. Again, you receive an expensive plan.
The excess you pay
Higher excess payments take away considerable chunks of the risks that the insurer has to bear. The more excess you choose to pay, the lower your motorcycle insurance will cost you.
With a better idea of what affects your premium, the next step is how to find the right balance between coverage and cost that suits you best.
No-Claim Discount (NCD)/ Certificate of Merit
In the insurance world, there is something called the no-claim discount or NCD. If you do not make any claims for a solid number of years, you add points to your NCD account and get an appropriate discount on your next motorcycle insurance.
For instance, if you have driven safely for 3 consecutive years and have not been in any accidents that compelled you to make an insurance claim, you become eligible for an NCD20 in Singapore or a 20% discount on the cost of your next insurance. The hack – drive safely to reduce your insurance cost.
How to find the right insurance for yourself?
We recommend the following points step by step.
- Decide the insurance plan you want
This will depend on the type of driver you are. If you are unsure about your motorcycle driving skills or typically take the road that sees heavy traffic, the comprehensive or full coverage motorcycle insurance might be right for you.
On the other hand, if you cannot swing the high price of the comprehensive coverage, consider TPO only if you have a safe spot to park your vehicle while you go in to buy coffee. As a balance for both cost and features, TPFT is viable only if you also have personal insurance covering your medical expenses.
- Inspect the excesses and usage
The best motorcycle insurance for young riders is the one that has options on excesses. And some insurers offer varied choices.
Additionally, you should think about what you will use your motorcycle for. Some coverages do not apply to vehicles being used for food delivery or other such business use.
- Read the fine print
You should not pick a motorcycle coverage just by seeing “damages to your motorcycle covered”. Ask yourself what type of damages are covered and to what extent. Read the papers accordingly and then decide your plan.
For instance, most insurers will cover damages to your motorcycle resulting from an accident in a comprehensive plan. Some will also bear the legal expenses if any. This is where reading the fine print can become the difference between picking the best insurance and settling for a mediocre one at the same rate.
- Price of the insurance
Well, the price has to come in somewhere. The average annual premium for TPO in Singapore is around S$232. For TPFT, the figure rises to S$303. Comprehensive costs the highest and the rate stands at S$499.
However, the above figures are only the average. The cost to you may vary depending on the plan you select and a few other factors. Having ticked the above three boxes, try landing on price last as the best coverage will generally be the pricier one.
Buying your motorcycle insurance
Understanding how motorcycle insurance premiums are calculated helps you make smarter choices. Don't settle for the first plan you see - always compare motorcycle insurance quotes to find a plan that fits both your needs and budget. With the right coverage, you can safeguard both your motorcycle and finances. Get a quote today and enjoy a peace of mind while on the road.
