Modifying your Bike? Here’s How It Will Impact Insurance Premium

If you are a biker who wants your beloved bike to shine in the spotlight, chances are you might be interested in modifying your two-wheeler. Different people have different motivations to modify their bikes. Some might do it for aesthetic appeal, some to enhance performance and some for safety purposes.

Bike InsurenceNowadays, enthusiastic bikers have better access to equally passionate bike technicians as compared to the previous decades. Skilled technicians can be found at a local garage as well as a fancy bike shop. They are dedicated towards transforming your two-wheeler into a showstopper. However, before you hit the top gear and ride straight to one of these bike-modification centres, try to understand how modifications affect the two-wheeler’s insurance premium calculation. Read ahead to know more about the relationship between bike modifications and insurance premium of a Comprehensive bike insurance policy.

Type of Policy

If you just have the basic Third-party bike insurance policy, there will be no impact of bike modifications on its premium. This is because a Third-party policy does not cover ‘own damage’. However, if you own a Comprehensive bike insurance policy, its insurance premium will be affected by bike modifications, as such a policy covers ‘own damage’.

Insured Declared Value (IDV) and Premium

Generally, when the IDV of your bike is on the higher side, the two-wheeler’s insurance premium is expensive. In most cases, bike modifications increase the IDV of the bike. As a result, there is a rise in its insurance premium.

Type of Modifications and Premium

● Aesthetic-based Modifications

These kinds of modifications are meant to enhance the bike’s look. Adding fibre parts, showcasing graphics on the two-wheeler, playing around with the bike’s lights, etc. are examples of aesthetic-based modifications.

Aesthetic modifications tend to increase the bike’s value to a certain extent. They also make the bike attractive and prone to theft. Additional bike parts suggest that more things can be damaged in case of a bike accident. All these factors prompt the insurance company to charge a higher bike insurance premium.

● Performance-based Modifications

Modifications that enhance the bike’s output are termed as performance-based modifications. For example, changes made in the bike’s mechanics to increase its speed will fall under this category.

Bike insurance companies might perceive such modifications as hazardous. For example, riding a two-wheeler at a high speed can increase the chances of a bike accident. Therefore, the insurance company might charge more premium to cover a bike that has been legally modified to increase its performance.

● Security-based Modifications

Not all bike modifications increase the bike’s premium. Security-based modifications can help you to save money on bike insurance premium. Such types of modifications are designed to diffuse the chances of bike theft. Fortifying the bike’s security with alarms, locks, and other such devices can help you to reduce your bike insurance premium.

Insurance companies offer a discount for installing anti-theft devices as they see it as a measure against theft. No bike-theft means no bike-theft claim! Therefore, it is a win-win situation for the insurer as well as the policyholder. Make sure that you install only those devices that are certified by the Automotive Research Association of India to avail a discount on bike insurance premium.

Inform the Insurer

Insurance companies do not usually inspect the bike before insuring it unless there has been a huge gap between policy expiry and renewal. They charge the insurance premium based on the bike’s make, model, and variant, along with other factors and the IDV.

Modifications can change the appearance of a bike making it look different from its original model. Such changes also affect the bike’s IDV. Therefore, the insurer needs to know the modifications to assess the risk in a batter manner. Once the risk is known, the insurance company will be in a better position to charge an appropriate premium to insure the bike.

If you do not inform your insurance company about the modifications made to your bike, and you raise a claim, the insurance company might reject the claim as they were unaware of the changes made to the insured asset. Therefore, inform the insurance company as soon as you modify your bike. For more details, you can get in touch with your insurance company and make an informed decision.

Views expressed in this article are the personal opinion of Animesh Das, Head of Product Strategy – ACKO General Insurance.

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