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How Can Your Bike Impact the Insurance Cost?

14 July 2022, 9:30 AM

Before riding a two-wheeler on the road, you must have two-wheeler insurance, according to the Indian Motor Vehicles Act, 1988. The first and most obvious benefit of two-wheeler coverage, or any policy, is ‘peace of mind'. For two-wheeler insurance, however, the rewards you receive depend on the sort of coverage you have. 

Benefits of Two-wheeler Insurance

Completing Legal Obligations

Getting two-wheeler insurance makes you a legal biker and keeps you out of trouble with the authorities.

According to the Motor Vehicles Act, everyone riding a two-wheeled vehicle must be insured, and you must carry a copy of third-party insurance while riding. 

Inexpensive Price

Compared to other automobile insurance, bike insurance is less expensive. Two-wheeler insurance is available at reasonable rates with a variety of payment options.

Simple and Painless Purchase

Purchasing two-wheeler insurance can be done online or offline based on your comfort.

Factors Determining Bike Insurance Cost

The cost of insurance differs from one person to another because of a few factors mentioned below:

Insured Declared Value

IDV in bike insurance stands for insured declared value, the sum agreed upon by the insurer and the vehicle owner. It refers to the maximum amount payable if the insured vehicle is stolen or damaged beyond repair. IDV is the vehicle’s current market worth. 

Factors such as the vehicle's age, bike registration date, model type, and registration city affect the IDV.

Year of Manufacture

It is also an important component in determining premiums. It is nothing but the age of a bike; the older the bike, the lower the insurance cost.

Cubic Capacity (CC)

 The bike’s cubic capacity, or CC, affects its power-producing capabilities and the bike insurance prices. Bike engines with higher capacity lead to higher premiums.

Policy Type

The coverage, benefits, and premium of your bike insurance policy are directly related to the type of policy you choose. Third-party insurance policy has affordable premiums as set by the IRDAI. But in case of comprehensive or standalone own damage, the premiums would be high, affecting your bike insurance cover.

Voluntary Excess

Voluntary excess and compulsory excess are a part of the insurance policy. 

With compulsory excess, you need to pay a part of the repair cost from your pockets, and the insurer will pay the rest. The difference between compulsory excess and voluntary excess is that compulsory excess is fixed by the insurer, and in the case of voluntary excess, you get to decide how much to pay on top of the compulsory excess. 

You can adjust the voluntary excess at the time of purchase of the premium. The higher the voluntary excess, the lower the premium amount is. 


You will need to pay an additional premium if you have chosen other coverage benefits, such as bike insurance add-ons over your base policy. Every add-on cover enhances the coverage of your base policy, albeit at an extra cost.

Geographical Location/Registration Zone

If you live in a zone A city, companies may charge you a higher premium because your vehicle would be exposed to more traffic and risks. Insurance companies charge a higher premium if you have registered your vehicle in a place with a high population. 

Security Guards Preventing Theft

Bike insurance companies may give you discounts if you have placed security gadgets to guard against two-wheeler theft. You can ease the load on insurance providers by purchasing bike theft prevention devices authorized by the Automotive Research Association of India (ARAI) and make your bike less vulnerable to theft and loss.

No-Claim Bonus (NCB)

No-claim bonuses are incentives your bike insurance company provides when you don't file any claim during the policy's duration. Savings on your insurance premium are the prize. 

Because of the NCB, your insurance premium will reduce on renewal. 

The End Note

Bike insurance protects you from legal liability. It also saves you from financial outlays by providing a cashless claim feature, which allows you to repair your bike without burning a hole in your pocket. Hence, investing in bike insurance is essential.

While investing in bike insurance, consider all the above factors. They greatly influence the premium amount of your two-wheeler insurance policy.

Also read - 


1. Is it mandatory to buy bike insurance?

According to the Motor Vehicles Act of 1988, bike insurance is required for all bikes. In addition, the Insurance Regulatory and Development Authority of India (IRDAI) acknowledges this in its insurance regulations.

2. What claims are provided in a bike insurance policy?

A bike insurance policy will pay out in the event of a fire, a natural disaster, theft, third-party liabilities, or any other type of loss. But all that will depend on the type of policy - comprehensive, standalone own damage, and third-party policy- you purchase. A comprehensive policy will cover all, whereas a standalone own damage policy covers you and your vehicle only. A third-party policy will only cover third-party claims.

3. How is the premium amount calculated for a bike insurance policy?

The bike insurance policy premium amount depends on a lot of factors. They include geographical location, add-on values, Insured Declared Value, policy type, age of the bike and its model, etc.

4. How does depreciation affect your bike insurance cover?

Depreciation refers to a decline in your vehicle's monetary value as it ages. The older your vehicle, the lower the claim settlement amount. You can opt for a zero depreciation cover where the insurance company will not consider the bike's or other parts’ depreciation when determining the premium.

5. How does your geographical location impact your bike insurance premiums?

If you register your vehicle in an area with a high population density, insurance companies will charge you higher premiums. This is particularly true for the zone of a metropolitan city. 

6. Can I claim engine damage on an insurance policy?

Yes, you can make an insurance claim for engine damage only if you buy an engine protection add-on by paying an additional premium. The add-on is available for comprehensive and standalone own damage policyholders. But do check the claiming clause for this add-on before purchasing it.

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