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A Complete Guide to a Two-wheeler Insurance Policy

14 July 2022, 1:26 PM

Did you know that according to the Indian Motor Vehicles Act 1988, having two-wheeler insurance is mandatory before driving a vehicle on the road? Two-wheeler insurance or a bike insurance policy safeguards your two-wheeler against damage to the vehicle, physical injury to third parties, etc. 

Types of Two-wheeler Insurance

The main types of insurance policies available in India are third-party, standalone own damage and comprehensive policies.

Let us go over their major benefits in detail:

Third-party Bike Insurance 

Third party bike insurance policy protects a third party’s life and property in the event of an accident caused by the insured two-wheeler. Insurance companies do not reimburse the policyholder for damage to their own vehicle.

The IRDAI declares the premium for third-party insurance every year. Since this is the most basic coverage available, the cost of this policy is lower.

Standalone Own Damage Bike Insurance

The standalone own damage bike insurance policy protects policyholders and their bikes in case of an accident, theft, damage or loss due to natural or man-made disasters, etc. However, the policy does not cover third-party claims. The premium for it is higher than the one charged for third-party insurance. However, the same comes lower than that of a comprehensive plan. You can add riders to a standalone own damage policy to extend its coverage.

Comprehensive Bike Insurance

As the name suggests, this policy provides more comprehensive bike insurance coverage for your vehicle than the other two.

The following are the key features of this policy:

  • In the event of an accident, this insurance plan protects the owner(driver) of the insured vehicle.
  • This insurance protects from man-made disasters such as theft, riots, strikes, commotions, etc.
  • It also gives protection against natural disasters such as lightning, storms, cyclones, hurricanes, floods, etc.
  • The policy covers damage to the vehicle while it is in motion or when stationary.
  • Third-party liability insurance is included in the comprehensive bike insurance plan.
  • Several add-ons, such as zero depreciation, roadside help, etc., are added to the basic policy to provide a higher level of protection.

As the policy provides more comprehensive coverage, the premium is higher than third-party bike insurance. The bike insurance company sets the premium based on a variety of factors.

Factors to Consider When Comparing Two Policies

Since every policy is unique, always remember to compare the top insurance providers before purchasing a plan. You should conduct thorough research to get a decent offer.

Insurance companies offer a variety of features in an insurance policy. Before purchasing one, examine the following factors:

Insured Declared Value (IDV)

This is the maximum amount that the insurance company pays you if your bike is damaged or stolen. The IDV in bike insurance is important when deciding on two-wheeler insurance. 

Examine the detailed breakdown of the bike insurance premium to get a clear picture of who offers high coverage for which bike parts.

Free Bike Check-up

Some insurance companies may provide you with a free bike inspection to see if your motorcycle has had any severe problems so that they can lower your IDV even further.

Additional Considerations

Everyone has their preferences while purchasing insurance for their two-wheeler. What might work for me definitely will not work for others. 

We will go over some additional pointers that will assist you in selecting the best two-wheeler insurance plan. 

Cashless Garages

Each insurance provider has a network of allowed garages where you can get your bike repaired for free. When choosing the insurance provider, do check its network garages. A significant number of bike insurance cashless garages only helps widen your choices for bike repairs in case of a claim.

Add-on Features

The add-on or additional features offer extra insurance coverage for your two-wheeler for a nominal fee. It includes zero depreciation, accessory, medical, and passenger coverage. The two wheeler insurance add-on features are available with standalone own damage and comprehensive bike insurance policies.

Benefits of Bike Insurance

The most important benefit of two-wheeler insurance is that it protects you against financial losses if your bike is damaged or stolen because of an accident, natural or man-made disasters, or theft. Not to mention that riding a two-wheeler on Indian roads without valid insurance is a punishable offence. 

How to File a Claim?

You can file a claim for your two-wheeler insurance policy both online and offline. You can even choose cashless claims if you have the bike repaired at an insurance company's network garage if you have comprehensive insurance.

The following documents are required while filing a claim:

  • A copy of the bike RC book.
  • A copy of the rider’s driver’s licence if they were driving at the time of the accident.
  • Get a copy of the police report if the accident involves another vehicle.
  • A copy of your insurance policy.

Bike Insurance Renewal

Always renew your bike insurance on time. There’s no harm in renewing it a few days before it expires because the renewal date will only be considered after your policy has expired. In the digital era, we can renew insurance online without any paperwork.

Also read - Is Online Bike Renewal Really Safe?

Bike Insurance Claim Settlement Ratio

Check the claim settlement ratio before purchasing bike insurance. 

What is an insurance company’s claim settlement ratio? It shows how many claims a company receives and how much it settles in a year.

  • When looking for a two-wheeler insurance company, look at their claim settlement process; it should always be simple and quick.
  • Check out the many types of coverage that each two-wheeler insurance provider offers.
  • Another key component that we should not overlook is customer service support.

Also read - 5 Questions to Ask Before Filing a Bike Insurance Claim

Claim Settlement Procedure

  1. Inform the insurance company about the bike’s damage or loss by calling the customer service number or visiting the company’s website. Your claim will then be registered with the insurance company.
  2. Once you file a claim, the insurance company will review all the documents provided along with the bike.
  3. If the bike is damaged in an accident, get it repaired after an inspection by the surveyor.
  4. The insurance company will then reimburse the cost of repairs.


With the IRDAI’s new law update, new owners need to buy bike insurance for a five-year term initially. Paytm Insurance can help you in selecting a policy that suits your needs. 

Also read - 


1. Is it recommended to buy multi-year bike insurance?

Multi-year bike insurance doesn’t require annual renewal. First-time bike owners will get an initial five-year policy term. Thereafter, they can opt for an annual policy term. It depends on your comfort whether you still want to have a multi-year bike insurance policy after completing the initial five-year term.

2. Can we buy an insurance plan with a low premium?

Avoid buying an insurance plan with a low premium that significantly lowers your IDV, an amount up to which you can claim. High premium insurance plans have lower deductions.

3. Can I buy two bike insurance policies at once?

You can purchase various bike insurance policies for one bike. 

4. What is meant by zero depreciation in bike insurance?

Zero depreciation in bike insurance means that while calculating the coverage, the insurance company will not consider the depreciation on the bike or any other parts of the vehicle. 

5. How much depreciation is charged on the parts of a bike?

It depends on the types of parts as the rates differ. 

  1. For tyres and tubes: 50%
  2. For fibreglass parts: 30%
  3. For rubber, plastic, or nylon parts: 50%
  4. For parts made up of glass - NIL
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