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Essential Factors That Determine Your Bike Insurance Premium

By Juhi Walia
22 August 2022, 12:44 PM

If you possess a bike, you might not be aware that the premium for two-wheeler insurance offered to you can be different from the premium offered to someone else who owns a bike. 

If you are aware of some of the major aspects that determine your premium amount and make some good adjustments, you might be able to lower your insurance price significantly. Focusing on these factors will also reduce your stress and help you have peace of mind when it comes to your bike's safety.

Before determining the ultimate cost of your premium, an insurance company will look at various factors such as: 

Bike Type

If you have a sports bike, your premiums will be higher than if it was just a leisurely cruiser. This is because race bikes tend to have higher performance levels, which means they can reach high speeds, putting them at greater risk of being involved in an accident.

Your bike's value will impact how much you pay for bike insurance cover. The more expensive your bike, the more expensive it will be to insure. This is because expensive bikes are at greater risk of being stolen or damaged than cheaper ones, so insurers need to charge a higher premium to compensate for their greater outflow should one file a claim.

Certain manufacturers are notorious for their quality of manufacturing products. Even though you have purchased the bike, insurance companies may use the historical data to buy into the marketing hype when deciding on the reliability score. The manufacturers who keep showing up in the claims list would be put in the higher premium category. So when shopping for a bike, check for reviews of the manufacturer with high reliability to bag a lower bike insurance premium.

Claim History

Claims can significantly impact your premium rate, depending on the insurer.

If you have had a few claims in the past, your rates may be lower than those with more claims. However, your rates may be much higher if you have a history of making many claims. This is because insurers use claim data to calculate how likely you are to file a claim in the future and whether that claim will result in a financial loss for them.

Insurers typically use three years of claim data as a starting point. However, they may use more or less information depending on their specific policies. Keep in mind that your rate will vary based on your individual situation and history.

Read more - How to File a Bike Insurance Claim in India?

Anti-theft Device

The installation of anti-theft devices in two-wheeler vehicles will result in lower premiums. This is because insurance companies are aware that it would be much harder to steal your two-wheeler with such a device. 

Read more - Anti-theft Tips for Two-wheelers When Leaving for a Vacation

Discounts via No-claim Bonuses

If you have not made any claims during the policy tenure, the insurance company provides a no-claim bonus(NCB). This bonus is offered as a percentage discount in the premium depending on how many years of NCB you have accrued. 

Deductibles in Two-wheeler Insurance

The deductible is the amount of the two-wheeler insurance claim that the policyholder is responsible for paying out of their own pocket. This cost-sharing agreement exists between your insurer and you. There are two categories of deductibles that are taken into consideration: mandatory and voluntary. 

The mandatory deductible in insurance means you have to pay a part of the bill for any repair or damage.

You choose to pay a portion of the claims out of your own free will. The bike insurance companies reward you for this by lowering your premium.

Insurance Add-ons

Opting for bike insurance add-on coverages like zero depreciation cover, consumables cover, roadside assistance cover, key loss cover, etc., helps you save money in case of an unfortunate event.

However, these add-ons would also increase the bike insurance premium you are supposed to pay.

Read more- Terms and Conditions of Bike Insurance Add-on Covers

Your Delayed Premium Payment History

If you have a history of late or missed payments, you may pay more for your bike insurance. You may have missed making payments towards your bike premium by mistake, or it just flew under your radar. Though it's an honest mistake, it adds to your insurance since it indicates that you are unreliable or aren't responsible enough to make payments on time. It also shows that you cannot afford to maintain the two-wheeler, which could lead to a bike insurance claim later.

Your Location

Bike insurance rates can vary depending on where you live. If you live in an urban area, you'll typically pay more for insurance than in a rural area. In the same way, each geolocation has a risk rate based on things like the number of bike insurance claims in that area, the rate of crime, the chance of a natural disaster, and so on.

In India, the insurance companies put the urban areas or the tier 1 cities in zone A, while any other city or region that is not included in zone A falls in zone B. The zone A cities are Chennai, Mumbai, Kolkata, New Delhi, Hyderabad, Pune, Bengaluru and Ahmedabad.

The Age of Your Bike

Older bikes are usually cheaper to insure than newer ones since the price of the parts, as well as the value of the bike, drops over time. A bike insurance IDV is the maximum amount an insurer will pay out in the event of a total loss claim. 

You also get an option to increase the IDV of the vehicle by opting for the more expensive variation of the bike insurance policy offered. This means that the amount payable by the insurer would be much higher in the event of an accident. Even though the upfront cost of a higher IDV policy is a bit more, the payout after an accident is also more. So, do consider that when you are in the market for bike insurance. But there will be a limit to which you can raise your IDV. 


Even though buying two-wheeler insurance is a mandate, making sure we don't pay a higher premium for the insurance is completely on us. Understanding the above-discussed factors would go a long way when buying an affordable bike insurance policy next time.


1. How is the basic bike insurance cost calculated?

Various factors determine the premium of bike insurance, but the basic price is decided by the size of the engine, usually calculated in terms of cc. The IRDAI decides the third-party bike insurance premium rates every year. 

2. Will buying long-term insurance for two-wheelers help reduce the insurance payments?

Going for long-term insurance will most likely reduce the price of the insurance premium as you will be immune to the price hikes proposed by the IRDAI in the future. 

3. Does adding a third-party silencer to a bike raise the premium?

Yes, adding any third-party accessories or products as an add-on over the factory-recommended parts will raise the price of the premium since the part designed by the company is meant to give the best efficiency. Additionally, details of the factory-fitted parts are known to the insuring company beforehand.

4. I have not renewed my insurance recently. Would it affect my premium?

When the policy has lapsed, the premium cost will go up a bit since it is one of the parameters insurers consider to calculate the insurance price. But if your policy has expired and not lapsed, ensure you renew the policy within 90 days of the expiration date to prevent a premium hike.

5. Does an offline purchase mode raise the insurance price?

Yes, while buying bike insurance from an offline vendor, an additional charge will be levied on the end user in the form of an indirect commission.

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