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Motorcycle Insurance Guide: Choosing the Best Two-wheeler Insurance
Thu, 10/08/2020 - 12:12
The Ultimate Guide to Motorcycle Insurance
Reading Time: 7 Min Read
Did you know that in 2019 alone, Singapore added around 140 thousand scooters and motorcycles on its road? We bet you did. You have certainly seen the number of two-wheelers plying in your area and felt like you should own one of your own as well. However, did you also know that nearly 50% of all road accidents in the past few years involved a motorcyclist or a pillion rider, out of which 25% were severely fatal? Now, this might seem like news to you.
Well, welcome to reality. 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
Once you visit any motorcycle insurer in Singapore, they will generally invite you with a booklet (and maybe a smile) mentioning the following 3 types of insurance available for your motorcycle.
- Third-party only motorcycle insurance
- Third-party, fire and theft
- Comprehensive motorcycle insurance
What are these about? Let’s elaborate.
Third-Party Only or TPO insurance
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 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 or TPFT insurance
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.
TPFT is a compromise between TPO and Comprehensive coverage and is naturally priced somewhere in between the cheapest and the costliest.
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.
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.
The motorbike 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 vary from S$500 to S$700 standard excess depending on the insurance premium plan you choose and the excess is only payable at the time of the claim. Till then, you can choose to pay low premiums if all these are seeming unfair to you (it’s not actually).
Motorcycle and bike 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.
How to find the right insurance for yourself?
We recommend the following points step by step.
1. 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.
2. 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.
3. 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.
4.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.
We can leave here but what is the value of a motorcycle insurance guide without a few handy price hacks? For that, we will first discuss the factors that affect your insurance premiums and then let you know a secret to reduce insurance costs over time.
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.
2.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.
3.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.
4.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.
5.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.
How to reduce insurance cost?
Time for the hack we promised! To reduce your typical motorcycle insurance cost, you can always buy a new standard street motorcycle. This will take care of parameters 2 and 3 mentioned above. But not everyone can afford a new motorcycle and not everyone wants a standard street motorcycle. This leaves us with 1,4 and 5. Well, your age is quite out of your hands and the excess argument is straight-forward. Which brings us to point 4.
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.
Renewing your motorcycle insurance
Let’s conclude with the two-wheeler insurance renewal process. Today, renewing your insurance has become as hassle-free as it can get. If you are choosing to continue with your insurer, contact them via their telephone number or email or head over to their website yourself to make the online premium payment.
However, if you are considering a switch, contact the new insurer again to explore your transfer options and follow all the above tips stated here to pick the best plan and the best brand for yourself. Look at the excess. See if your NCD is transferrable. Settle with the one who has the best motorcycle insurance personal accident cover.
One such name in the market is DirectAsia Insurance. We boast a customer satisfaction rate of 90% where all our plans are crafted to suit your specific needs. You are eligible for NCD30 (the highest in town) in DirectAsia if you have maintained NCD20 for two or more years. You also get customised options on excesses, new and old motorcycles, one of the best TPO, TPFT and comprehensive plans and the freedom to repair your vehicle at the workshop of your choice.
So, get your motorcycle insured with DirectAsia today. Get a quote here.