header Two Wheeler Insurance

Essential Things You Should Know About Two-wheeler Insurance Policy

By Juhi Walia
31 August 2022, 2:09 PM

Are you in a fix regarding whether you should purchase two-wheeler insurance policy or just ride without one? This question is nagging you because you may not know the basics of a bike insurance policy. Buying a policy is compulsory from a legal point of view. You also stand to enjoy absolute peace of mind and immunity from monetary losses in the event of an unfortunate accident.

You can rest assured about quick claim settlement because IRDAI (Insurance Regulatory and Development Authority of India) governs and keeps a close watch on bike insurance provider companies. Incidentally, third-party bike insurance is the mandatory cover that a two-wheeler rider must purchase before hitting the roads. 

If the traffic police intercept you without good two-wheeler insurance papers, a fine of INR 2,000 and/or an imprisonment of 3 months will be imposed as per the Motor Vehicles Act. Brush aside all confusions by knowing the basics of your bike insurance policy.   

Types of Two-wheeler Insurance Policies

You can purchase different variants of a bike insurance policy based on your needs. Different policy types offered by insurers have been outlined below.

Comprehensive Bike Insurance Policy

The features of this policy are designed to reduce the adverse monetary impact on you if an unfortunate event affects your bike. This policy not only covers third-party liabilities but also own damages also. 

Compensation is provided by the insurer (after proportionately reducing the depreciation value) for-

  • Replacement or repair of bike’s spare parts damaged by any accident.
  • Theft or complete irreversible loss of bike (Insured Declared Value is given).
  • Damage caused by man-made disasters (riot, arson, etc.) or natural disasters (cyclone, storm, flood etc.) calamities

You can purchase add-ons to enhance the coverage scope of the comprehensive bike insurance policy.

Third-Party Bike Insurance

If an accident by your bike causes injuries to a third party or their property , your 3rd party bike insurance policy compensates for the monetary liabilities arising from the same. The insurer pays the third party on your behalf for

  • Their death, partial or total disability
  • Medical expenses are borne for treatment of injuries
  • Property damage up to INR 7.5 lakh

Personal Accident (PA) Cover

Personal accident cover along with your bike insurance policy can be purchased to get financial compensation if an unfortunate accident causes your death or renders you disabled for life. The maximum compensation offered is INR 15 lakhs.

The quantum of compensation is determined as follows:

  • 100% of the sum insured in case of death; loss of sight of both eyes; or two limbs; or one hand and one foot.
  • 50% of the sum insured in case of loss of sight of one eye; or one feet; or one hand.

Standard Terms Used in Bike Insurance Policy

In this section, you will get an overview of standard terms you may encounter while purchasing a bike insurance policy.

IDV (Insured Declared Value)

IDV, in a simple sense, is the present market value of your bike after reducing the depreciation component from the purchasing price. The insurance company shall reimburse the maximum guaranteed value if your bike is irreparably damaged or stolen. IDV in bike insurance reduces every year at the time of bike insurance renewal due to the depreciation factor.

NCB (No Claim Bonus)

Suppose you have not claimed reimbursement from the insurance company during the ongoing and/or previous year against your bike insurance policy. In that case, you will be awarded an incentive by the insurer. This is No Claim Bonus(NCB).

To qualify for NCB, you need to

  • Have a valid two-wheeler insurance policy during the previous year and before that (based on the bike’s age).
  • Renew your insurance coverage within three months of the expiry of the existing policy.

NCB is incremental. It increases based on the number of continuous zero claim years.

  • NCB is 20% of the premium value for 1st year
  • For 2nd year, NCB is 25%
  • NCB goes up to a maximum of 50% for continous 5th year

Bike Insurance Policy Add-ons

Add-ons enhance the coverage scope of standalone and comprehensive bike insurance policies related to own damage. These are optional, and you can selectively avail them by paying a nominal fee in addition to a regular premium.

Some of the two-wheeler insurance add-ons most preferred by bike riders have been outlined below.  

Zero-Depreciation Cover

Zero depreciation bike insurance add-on cover shields you against the decrease in claim value owing to the depreciation of bike components. The insurer will reimburse you the full value of replaced or repaired bike parts.

Roadside Assistance Cover

If you are stranded somewhere due to a broken down bike, the insurer

  • Will help troubleshoot the problem over phone.
  • Will arrange for towing vehicle to shift the bike to the nearest garage.
  • Will drop you at home or chosen location.

Consumables Cover

Comprehensive bike insurance cover doesn’t pay for the expenses incurred on the replacement of engine oil, lubricant, nuts, bolts, and other consumables. Consumable bike insurance add-on helps you claim reimbursement for payments made for such items. 

Return to Invoice

If your bike has been stolen or accidental damage has rendered it completely useless, you will be reimbursed the invoice value of the bike. With return to invoice bike insurance add-on, you will get higher compensation value for your vehicle, equivalent to its invoice. 

Lost Key Replacement

This add-on ensures that the insurer will replace your bike’s key free of cost if you have lost or misplaced it.

Accessories Cover

To enhance your bike's aesthetic appeal and utility, you may have invested in additional accessories. This add-on pays for the cost of replacing such accessories if they are lost, damaged or stolen. You have to disclose the accessories' total value to the insurer.

Engine Protection Cover

The comprehensive two-wheeler insurance policy doesn’t provide for financial assistance to get the bike’s engine repaired or replaced after accidental damage. However, engine protection bike insurance add-on entitles you to reimbursement for engine repair changes even if the damage has occurred due to natural calamities.

Co-Passenger or Pillion Cover

The regular bike insurance policy only covers personal accidents for the rider if an accident causes him to sustain bodily injuries. This add-on, however, compensates the pillion if the accident renders him partially or fully disabled.

NCB Protection Cover

If you claim your current policy, the NCB for next year becomes zero. This cover, however, allows you to avail of NCB during bike insurance online renewal even if a claim has been registered during the last policy year.

Medical Cover

The insurer will pay for the entire array of medical expenses you bear if the accident causes you grievous bodily injuries.


You can now make an informed and conscious decision while purchasing a bike insurance policy that optimally suits your unique needs. Know the basics of your policy, what it covers and what key elements it has. In order to stay away from paying hefty fines and penalties, never venture out on the road without valid bike insurance coverage.

Read more -



1. Which two-wheeler insurance type must be compulsorily purchased before riding a bike?

IRDAI has made it compulsory to buy a 3rd party bike insurance for riding on Indian roads.

2. Why does the insured declared value decrease yearly during bike insurance renewal?

IDV reduces because the insurer factors in the depreciation of the ageing bike’s components. For example, fibreglass components depreciate by 30%, whereas the depreciation value is 50% for parts such as batteries, tubes or components made of plastic, rubber, or nylon.

3. Will I be penalised if I ride the bike without purchasing a two-wheeler insurance policy?

Yes. As per the provisions of the Motor Vehicles Act 1988, you will be fined for INR 2,000, and/or you may be imprisoned for up to 3 months.

4. What is No-claim bonus?

It is an incentive awarded by an insurer when a policyholder does not raises a claim during his policy tenure.

5. How can I increase the quantum of compensation made by insurer?

By purchasing add-ons such as zero depreciation, return-to invoice, engine protection two-wheeler insurance.

Two wheeler Insurance banner
Two wheeler Insurance

Starting at only ₹1.5 per Day*

Enter your details to buy Bike Insurance
By proceeding you agree to Terms & Conditions
Proceed without two wheeler number