Blog / Motorcycle Insurance
Motorcycle insurance excess. What is it?
When you’re looking for motorcycle insurance policies, often you’re not comparing apples with apples – some insurance policies cover more than others but cost more on an annual basis.
And insurance excess changes that calculation further.
Most insurance policies have a standard excess, which is the amount you pay for each claim you make against that insurance.
At Budget Direct Insurance the standard policy excess for motorcycles is $500. This means if you make a claim for $1,000 worth of damage to your motorcycle, you will pay $500, and Budget Direct Insurance will pay the remaining $500.
Obviously, if there is damage to the motorcycle that costs $500 or less to repair, you’re the person paying for that.
What does motorcycle insurance excess achieve?
Excess payments aim to reduce the number of small claims that are made to the insurer and to hand some responsibility back to the motorcyclist. Doing so reduces the risk to the insurer, and also reduces the premiums they need to charge.
Can I change the excess I pay?
The good news is that most insurers allow you to choose your excess amount, depending on your budget and your circumstances.
If basic excess is $500, you may opt to reduce this amount in the policy you choose. In the event of an accident, you will not have to pay so much towards the cost of repairs. But, by lowering your excess, you increase the risk for the insurer, so the annual premium will be higher.
Why would I pay higher excess?
If you’re young and/or inexperienced, your excess will most likely be set at a higher rate.
You also need to look at amounts that are added onto your basic excess. Additional excess will be added in the case of anyone riding your motorcycle who is below the age of 25 or has less than two years riding experience, for instance. Read your policy carefully to understand additional excess rates.
Voluntary motorbike insurance excess
Some insurance companies allow you to opt for voluntary excess, where the amount of excess you pay above the minimum isn’t decided by the insurer, but by you.
In the event of an accident, you would have to pay both the compulsory excess set by the insurer and the voluntary excess.
This might be an option if you consider yourself to be a very safe motorcyclist. You have to be prepared to take on the risk of a higher payout if you make a claim, but the payoff will be in lower annual fees.
Be aware that there may be conditions that add more excess for a claim. The table below details some.
| Type of Excess | On Each and Every Claim** |
|---|---|
| Policy Excess | $500 |
| Additional Excess | |
| - Theft Outside Singapore | 50% of Market Value of your Motorcycle at the time of Theft (up to maximum of $2,000) |
| - Medical Expenses | $100 |
| - Named Rider below 25 years old | $500 |
| - Named Rider with less than 2 years’ valid driving licence | $500 |
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For each excess condition, the excess amount is added to the total. Here’s an example:
If a claim involves a Named Rider who is 24 years old and has held a valid driving licence for less than two years, the total excess payable would be $1,500. This amount is calculated as follows:
| Type of Excess | On Each and Every Claim** |
|---|---|
| Policy Excess | $500 |
| Named Rider below 25 years old | $500 |
| Named Rider with less than 2 years’ valid driving licence | $500 |
| Total | $1,500 |
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You could choose to pay an extra premium to reduce the policy excess to zero.
And in some cases, the excess may be zero anyway – if the claim is for an accident with another Singaporean registered vehicle, for instance, and in the assessment of the insurance company the accident was wholly not your fault, the excess will be waived.
Riding safely saves you money!
But by assessing your risk and your ability to pay a higher excess in the case of making a claim, you could reduce your annual premium, and save money in the long term.
Insurance should be quick and easy to buy, at a price that’s affordable. Insurance excess helps make that possible.
