Moped insurance provides financial cover against damage due to fire, theft and accident. With a rise in the theft of mopeds and higher accident rates, most nations require mandatory moped insurance. An individual can face fines or even a prison term for riding a non-insured moped.
What Does Moped Insurance Cover?
Moped insurance is similar to motorbike insurance. Liability insurance or third-party insurance is a basic necessity for moped owners. It shields the policyholder against legal penalties for damaging another person’s property. Moped insurance usually also covers damage caused to the vehicle in the event of an accident, fire, theft and vandalism. The policy should clearly define whether the coverage includes replacing the vehicle with a new one or an old moped of equivalent market value.
As additional coverage, one can also buy breakdown insurance to get assistance during a crisis. A moped insurance policy with attached medical cover will pay for bodily injuries to the driver in case of an accident.
Factors That Determine Moped Insurance Premium
A number of factors come into play while deciding on the policy premium for moped insurance. The age of the policyholder or driver has a significant influence on the premium rate. Young drivers are prone to road accidents and violating traffic rules. They, therefore, have to pay higher premiums for moped insurance. The driving record of the policyholder also impacts the policy rate. Some regions witness frequent vehicle thefts, which affects the policy premium negatively. The greater the distance covered, the higher are the chance of an accident. So if an individual drives the moped for thousands of miles annually, s/he has to pay a higher amount as premium.
Every moped insurance policy has deductibles or an excess amount agreed to by the policyholder. This is the amount that the policyholder has to pay before the insurance company begins to pay for the cover. If the excess amount is higher, the premium declines automatically. If the damage is very close to the excess amount, it is preferable to avoid filing a claim and pay for the repairs oneself. This way one can accumulate cost benefits from a ‘no claims’ bonus.