header Two Wheeler Insurance

How to Decide on the Premium Amount for Your Bike Insurance

By Vikas Chandra Das
20 September 2022, 11:15 AM

Two-wheeler insurance is a must-have for every bike rider to safeguard them from financial losses when met with an accident. A bike insurance company would compensate and protect you from all financial liabilities that arise in the advent of an accidental mishap. With myriad options available for bike insurance online and offline, it is advisable to compare various policy plans and choose the one that suits your requirements and pocket best. 

However, choosing what you want in bike insurance, you should be aware of the basic premiums of two-wheeler insurance are calculated and whether your bike falls under those criteria. This would give you an idea of selecting a low premium, good comprehensive insurance plan that would yield optimum benefits in the future when needed.

List of Variables That Affect Bike Insurance Premiums

To understand why a specific bike insurance policy attracts a particular premium amount, it is important for you to understand the variables that affect bike insurance policy premiums. These have been listed hereunder for a better understanding of the same.

Make and Model the Bike

The higher the model of bike you have, the more its insurance premium amount would be. Basic bike models have low premiums to be paid on them for insurance coverages.

As the scope of the coverage for the bike widens, the premium amount, too, enhances. For example, a luxury sports bike model would have a higher insurance premium than a normal bike. 

Year of Manufacture

The rate of depreciation on a bike increases with an increase in its age. The insurance premium amount for an old bike would be lower as its IDV would be low. 

Type of Coverage

Two types of motor insurance policies are available in India: Third-party and comprehensive. Third-party insurance is mandatory as per Indian laws, but this policy covers only third-party damage caused by accidents. A comprehensive policy, on the other hand, covers own damages as well. Since comprehensive policies cover a wider spectrum of services and damages, their premium amounts are higher than the third-party insurance plans offered by bike insurance companies. 

Engine Capacity 

Bike insurance companies analyse the engine capacity as one of the key factors when determining the premium amount for two-wheeler insurance policies. The engine size is mentioned in cubic capacity (cc); if you know your bike's engine size, you can determine its insurance premium payable amount.

The lower the engine capacity, the lower the premium amount and vice-versa. For example, the premium for a 75 cc bike would be lower than that of a 350 cc size bike engine. 

Geographical Location

Using your bike in an urban location would subject it to higher risks, congestion and traffic density. This would automatically call for a higher premium for your bike insurance policy. This amount is directly proportional to the amount of risk it is exposed to. You will have to pay a lower premium if the bike is used in rural areas. 

Age of the Insured

The age of the vehicle owner also impacts the insurance premium amount. A middle-aged person has to pay a lesser premium than a young rider as the risk exposure to the latter is higher than the former. 

Security Installations

With more security features installed on your bike, the premium amount would be less as it would have enhanced security. The added accessories would decrease the damage impact and risk of theft. Also, additional security devices would fetch further discounts on bike insurance premiums. 

No Claim Bonus

Almost all insurance providers offer a no-claim bonus discount. This means that if you haven't raised any claim on your previous year's insurance policy, you are eligible to get a discount on the renewal of the same. The discount percentage is as high as up to 50% and may vary from company to company. 

Membership Discounts

Certain insurance companies provide a discount for members of associations like the Automobile Association of India. Hence, you can get a discount on your bike's insurance premium if you are a member. 

The Gap in Renewal

Bike insurance policies have to be renewed every year. If you miss the renewal of your bike insurance policy, you would have to take out a fresh plan which would be more expensive than the renewal policy, as you would then miss your no-claim bonus discount. 

Read more - Essential Factors That Determine Your Bike Insurance Premium

Final Take

Getting your hands on the most lucrative deal for your bike insurance calls for thorough research and study of the various companies offering different plans and premiums. To get a list of all these insurance providers and compare it under one roof, you can log on to the Paytm Insurance website, which provides a whole list of bike insurance companies along with their various plans and premium amounts in one window. This makes the job much easier and most beneficial as well. 

Read more - A Complete Guide to a Two-wheeler Insurance Policy


1. Is there a difference in premium amount if I choose a comprehensive plan over a third-party insurance plan?

Among the 20 bikes available in India, in the below INR 80,000 category, the bikes most preferred by Indian bikers are Hero Splendor Plus, Honda Activa 6G, and Honda Shine.

2. Which is a better plan, comprehensive or third party?

A comprehensive plan is better as it covers the owner's vehicle and third party liabilities during accidents, while third-party insurance covers only third-party claims. 

3. If I give a gap in the renewal of my bike insurance, will it affect my premium amount?

A gap in bike insurance renewal would mean you cannot get the benefit of discounts on your premium amount owing to no claim bonus in the previous year. 

4. Is online bike insurance safe?

Online bike insurance is safe and secure. However, consider the variables affecting bike insurance premium amounts before choosing the right one. 

5. Is 5 years of insurance mandatory?

Yes, as per the IRDAI regulations, it is mandatory for all new two-wheeler owners to be issued 5-year bike insurance to avoid lapsed, uninsured and expired policies.

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