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Cheaper Motorcycle Insurance. How to Reduce your Premium
There are many reasons people choose to ride motorcycles: They’re fun and exciting; there’s a sense of community when you ride a motorcycle; and they are (relatively) affordable in the Singapore context.
Decisions you make can make motorcycling cheaper still, so if you want to save money, particularly on motorcycle insurance costs, read on…
Choice of bike affects your motorcycle insurance premium
Unlike cars, which tend to do a reasonable job of most motoring situations, the motorbike world offers a range of different styles and specialties, from laid-back cruisers, to racetrack-refugee sports bikes, to tough and tall trail bikes, to comfortable touring machines, or street bikes, or commuters.
The choice is amazing.
Before you buy, it’s worth considering how that choice will affect your bike insurance premiums. Here’s how:
- Cost. It should be obvious, but the more expensive the motorcycle you buy, generally the more expensive it will be to insure.
- Use. While it may be tempting to want to emulate your favourite MotoGP star with a fancy sports bike, many insurers will see you as a greater risk, particularly if you’re a younger or less experienced rider.
- Rarity. It may make you feel special to have one of the only units of a particular bike model. But that rarity will likely also make parts rare, meaning potentially having to wait while parts are imported, and adding to cost.
- Age. Second-hand motorcycles save you money from the get-go, but be aware that running costs can increase over time, and parts can get harder to find. The latest data shows that the average motorcycle age peaks at four to five years old and declines from there.
- Modifications. Insurers tend not to like modifications for a number of reasons, but largely because they can make repairs more difficult and costly.
What to do to save on motorcycle insurance:
- Choose a popular, common model. Look on the bright side: these bikes are popular for a reason! You’ll also have fewer troubles finding parts, and those parts are likely to be cheaper. And that translates to cheaper motorbike insurance.
- If you do buy second-hand, aim for the newest, lowest-mileage, best-maintained unit you can afford. Newer models – especially popular models – are more likely to be well-supported for parts by the importing agents.
- Avoid buying a bike that has been modified – those modifications will have cost more than the standard showroom parts, and will likely increase the cost of your insurance policy.
- Particularly if you’re an inexperienced rider, you’ll probably want to avoid fully-faired sports bikes – those fairings aren’t cheap to replace and are easily damaged in a fall. Insurers are likely to charge more than for similar unfaired models because of this alone, plus they’re likely to suspect you fancy yourself a racer and are more of a risk to insure.
More ways to save on your motorbike insurance
While you’re shopping around, have you considered shopping for a spouse? Insurance companies tend to see married riders as more responsible, and that could reduce your insurance costs.
If you can pay cash for your motorcycle rather than financing it, you are set to save on your bike insurance too.
Finance companies are taking a risk loaning you money for a machine that could be worth nothing tomorrow, so they will insist on full comprehensive insurance, in order to protect that investment.
If you’ve paid cash, then the risk is all yours, but that does open the option of other levels of coverage (i.e. Third Party Plans, which are always cheaper than the Comprehensive coverage that financing companies insist on).
Insurance coverage levels affect premium price
One of the most obvious places to save on motorcycle insurance is the level of coverage you choose (assuming you have the choice). If you do have the choice, you will need to weigh the risks you will assume compared with those the insurance company covers.
- Comprehensive. The highest level of insurance obviously comes at the highest price. If your bike is financed, you’re probably locked-in to a comprehensive insurance plan.
Comprehensive motorcycle insurance generally includes the following: Cover for injury or death to someone else; damage to other people’s property; legal costs; damage to your motorcycle if someone else crashes into it; damage to your motorcycle if you accidentally crash into something else; damage by fire; loss or damage due to theft; damage caused by fallen trees, floods, storms, or any other natural disaster; and damage caused by vandals.
- Third Party Fire and Theft coverage is a cheaper alternative to comprehensive, though obviously offers reduced coverage.
A Third Party Fire and Theft policy generally includes the following: Cover for injury or death to someone else; damage to other people’s property; legal costs; damage to your bike by fire; loss or damage due to theft.
- Third Party Only insurance is the minimum required by law.
Third Party Only motorcycle insurance covers injury or death to someone else; damage to other people’s property; and legal costs.
Note that Third Party Only covers you for damage to a third party’s property – not your own motorcycle. If your motorcycle is written-off, can you afford to replace it? Would you need to replace it? These are a few of the questions you’ll need to consider.
Safe riders make a saving on motorbike insurance
We all love a discount, but were you aware that safe riding can also save money?
If you don’t make any claims against your insurance, the insurance company will give you a discount, known as a No Claim Bonus, or No Claim Discount, on a sliding scale.
If you make no claims for a year, that will generally earn you a 10% discount for your next motorcycle insurance renewal. If you make no claims for two years in a row, then the discount usually goes up to 15%. And if you’re claim-free for three consecutive years, that discount increases to 20%.
And the best news is that the discount applies to you, as opposed to the motorcycle. So if you replace your motorcycle after three years of no claims, that 20% discount applies to the policy on the new motorcycle’s insurance policy.
Other ways to cut the cost of your motorbike insurance
There are a few other ways you can reduce your motorcycle insurance bill:
- If you only ride in Singapore, Singapore-only coverage will reduce your premium. Budget Direct Insurance is one of the few insurers that provide this money-saving option.
- You can choose to have a higher policy excess (standard is S$500 before prevailing GST), which will also reduce the premium.
- You can even save by choosing to go paperless for your policy details. Budget Direct Insurance offers savings of S$20 (before prevailing GST) if you opt to go paperless!
There are a load of choices facing motorcyclists. By making sensible, informed, decisions those motorcyclists stand to save on their bike insurance premiums too.