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What factors affect cost of motorcycle insurance?



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Insurance is surely the only service consumers regularly pay for while hoping never to need. The premiums we pay for motorcycle insurance are calculated based on the levels of coverage required and the risks to the insurance company of providing such coverage.

Understanding what affects your insurance premiums can help when it comes to choosing the right coverage for you.

There are many factors that affect the cost of motorcycle insurance and it pays to understand what is included in your motorcycle insurance plan to avoid over-paying.

While a minimum amount of coverage is mandated for all motorists in Singapore (the minimum requirement is to cover at least third party liability for death and bodily injury arising from the use of the vehicle), some policies offer more protection than that mandated third party liability minimum, for a price.

And while some factors taken into consideration when calculating insurance premiums can’t be changed (such as rider age), others, such as extent of coverage and type of motorcycle insured are choices riders can make to minimise their insurance costs.

Be sure to know what extras you’re paying for and whether or not you truly need them, otherwise you’ll be paying for coverage you don’t need.

To help you work out if you’re paying a fair priced premium, here are the average costs and benefits of motorcycle insurance policies in Singapore.

How does age affect my motorcycle insurance premiums?

By far the biggest factor affecting insurance premiums are rider age. If you’re a rider in your 20s you can expect to pay 75% more for your motorcycle insurance than a middle-aged rider would.

It may seem unfair, but the reason for this is risk. Accident data shows that young motorcycle riders have more accidents than older riders, so insurance companies mitigate that risk by charging higher premiums for younger bikers.

Average-Cost-of-motorcycle-Insurance-in-Singapore-by-Age-group
Source: ValueChampion

In this example, consumer researchers ValueChampion, show costs of a comprehensive insurance plan for a male rider of a Honda CBF150 without a no claim discount (NCD). Premiums fall dramatically when riders reach their 30s and are marginally cheaper for riders in their 40s, but climb again marginally as riders reach their 50s.

The good news is that if you don’t make claims, then no-claims discounts can apply too, further lowering your premiums.

How does motorcycle type affect insurance premiums?

Another factor that affects your premiums is the type of motorcycle being insured. More expensive machines will obviously attract higher premiums – if an insurer has to pay to replace a stolen motorcycle, for instance, their risk increases with the value of the bike.

Average-Cost-of-motorcycle-Insurance-in-Singapore-by-Engine-Power
Source: ValueChampion

ValueChampion found that for the same rider on different bikes, the capacity of the bike made a difference to the average premiums – this is reflective of the fact that smaller-capacity motorcycles tend to be cheaper, and also that they tend to be at less risk of accidents and cheaper to repair.

A 35-year-old rider on a Honda NC750XA will pay 60% more for comprehensive insurance than he would on a Honda CBF150, for instance.

Riders of expensive sports bikes, or other more exotic and expensive brands can expect to pay more again.

Comprehensive versus third party motorcycle insurance

Generally speaking, insurers offer three levels of coverage: Comprehensive; Third Party Fire and Theft; and Third Party only. Just to give you an idea, here is a breakdown of the cover you receive with Budget Direct Insurance.

  • Comprehensive motorcycle insurance covers injury or death to someone else (unlimited); damage to other people’s property up to $500,000; legal costs up to $3,000; towing – up to $100 in Singapore and $300 elsewhere; damage to your motorcycle if someone else crashes into it (either repairs, replacement, or reimbursed to market value); 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 covers injury or death to someone else (unlimited); damage to other people’s property up to $500,000; legal costs up to $3,000; damage by fire; loss or damage due to theft; and towing in the case of fire or theft – up to $100 in Singapore and $300 elsewhere.
  • Third party only motorcycle insurance covers injury or death to someone else (unlimited); damage to other people’s property up to $500,000; and legal costs up to $3,000.

Obviously the lower the level of coverage, the lower the insurance premium, and this is where as an owner you need to weigh the advantages of more comprehensive cover with its extra costs.

If your motorcycle is subject to finance, there may be no choice – the finance company will want to know their investment is covered and will likely insist on comprehensive cover.

Also, owners of older machines may find that insurance companies may only cover them for Third Party type coverage.

Optional extra benefits

Some insurance companies offer optional cover, including roadside assistance in case you break-down or get a flat tyre; a transport allowance if your motorcycle is off the road; medical expenses related to a motorcycle accident; and even to protect your no-claim discount, though all will come at extra cost.

Any modifications you have made may be covered, though that coverage will likely come at extra cost, and only if the modifications were declared to the insurance company and are LTA compliant.

How to choose your motorcycle insurance

Your choice of level of cover and any extras is entirely down to individual requirements.

While it is tempting to save money by choosing Third Party coverage, it may not be a wise choice if you rely on the motorcycle and can’t afford to replace it without the insurance. That’s what insurance is there for after all – peace of mind.

If you can afford to replace the bike and only ride it on weekends, you may not feel the need to pay for full comprehensive cover.

Cut costs on your motorcycle insurance premium

  • If you only ride in Singapore, Singapore-only coverage will reduce your premium.
  • You can choose to have a higher excess (standard is $300), which will also reduce the premium.
  • If you have a record of not making claims, your premium could be discounted up to 30%.
  • If you’re shopping for a motorcycle, you could choose a model that both suits your needs and is cheaper to insure.
  • You can even save by choosing to go paperless for your policy details.

Having valid motorcycle insurance when riding on Singapore roads is mandatory, but  weighing your needs and selecting the right premium for you could save you money as well as provide the peace-of-mind that insurance provides.

Wherever you go, whatever you do, it’s vital to have good motorcycle insurance.
Check out Budget Direct Insurance for your best deal.

Get a motorcycle insurance quote today!

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