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More Than 60% of Two-Wheelers Are Uninsured in India

By Juhi Walia
28 July 2022, 10:07 AM

Full of excitement, Ms Kalpana was set and ready to purchase her new scooter. After putting a lot of effort into research and enquiry, she met the best dealer for her scooter in her town. She was ready with the funds and documents; all the formalities were finalised. The dealer handed the keys to Kalpana, and she was finally ready to fly with her new scooter.

“Indian government has made it mandatory to get insurance for two-wheelers, don’t forget to buy one for your scooter, dear!” said her father. “Sure, Dad, I’ll buy one later someday,” replied Kalpana.

Being a beginner, Ms. Kalpana was unaware of the traffic rules. One fine day, she went shopping for her sister’s wedding. Unknowingly, she parked her scooter in a no-parking zone. She bought a beautiful dress and felt thrilled, wanting to flaunt her new dress at the wedding. But wait… as she stepped out of the shop and reached where she parked her scooter, she could not find it there!

She tried her best to seek her scooter but had no luck! At last, she landed at the nearest police station to lodge an FIR for her lost scooter. “This is a theft case with extremely low chances of finding your scooter,” said the inspector at the police station. Ms. Kalpana was grieved and regretted not buying the insurance policy at the right time.

She had to bear the loss of her scooter as no one could compensate her for this theft.

The cons of not taking two-wheeler insurance can be clearly observed in the above incident. Different folks have their own perspective on not buying insurance. Some probable reasons could be:

  1. Some say their vehicle is too old or second-hand.
  2. Some say they travel a short route.
  3. Some consider it a waste of money.
  4. Paying a high premium does not seem fine to some.
  5. Tedious renewal process or lack of knowledge of the process.
  6. For some, it is just not required.
  7. While others are the victim of procrastination.
  8. Poor legal control and management in India easily allow people to escape not having vehicle insurance.

60% of Two-wheelers are Uninsured

  • According to recent data released by Insurance Information Bureau (IIB), 57% of the vehicles running on the Indian roadways are uninsured. Of this, more than 60% are two-wheelers.
  • Moreover, the IIB report states that about 52% of the two-wheeler owners fail to renew their insurance policies beyond the first year. There could be multiple reasons for the non-renewal of insurance:
    • Complex renewal procedure
    • Lack of knowledge of the process
    • Ignorance of expiry of validity

Other Facts Related to Indian Traffic

  • Two-wheelers represent nearly 76% of the Indian urban traffic.
  • On the other hand, ‘two-wheelers also contribute to approximately 34% of the Indian road accidents’ – according to a report issued by the Ministry of Road Transport and Highways.

What does the Indian Law Say?

  • The Indian Government has made it strictly compulsory to have your vehicle insured.
  • As per the Motor Vehicles Act, 1988, no two-wheeler can run on Indian roadways without third-party liability insurance.
  • Failing to meet the above requirement may lead you to a penalty of up to INR 2000 or imprisonment of up to 3 months or both.
  • To encourage the public to get a minimum cover for their two-wheelers, the IRDAI has made third-party insurance premiums accessible to everybody. Third-party cover premium rates for two-wheelers for FY 2022-23 range from INR 538 to INR 15,117 based on the insurance term and the vehicle's cubic capacity. These rates are effective from 1st June 2022.

Reasons Why it is Important to Buy Insurance

Your two-wheeler must be protected against theft (as in the story above) as well as road accidents and other physical damages. In fact, in India, road accidents are the major reason for not leaving your two-wheeler uninsured. You can find multiple other reasons as mentioned below:

1) Road Accidents - India ranks among the countries with the maximum traffic accidents. The increasing number of vehicles on India's roadways each year is one of the key causes.

2) Two-wheelers are highly vulnerable to road accidents compared to other vehicles.

3) Comprehensive bike insurance protects you against damages while reducing your liability to a third party.

4) You need not stress about the hospital expenses as the insurance provides cover against such costs. It also financially supports your family members in case of your death.

5) The Indian public must be active in taking insurance to safeguard themselves and others’ life and property. Nobody should bear loss due to the action of others. This is a major reason why the Indian Government has made it mandatory to secure your two-wheeler with a third-party bike insurance cover.


'It’s never late to start good things.' Likewise, it’s never too late to get your vehicle insured. If your bike is already insured, don’t miss renewing the policy. You can set reminders or take a long-term policy to escape renewal hassles that remain the case with an annual plan. For better insurance options, you can check out the policies offered by Paytm Insurance

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1. Is there any penalty for not having two-wheeler insurance?

Yes, if you do not own an active insurance policy for your two-wheeler, you may be punished with a penalty of up to INR 2000 or imprisonment of up to three months or both.

2. What is not covered/protected under third-party insurance?

Third-party two-wheeler insurance generally does not cover loss due to illegal driving, violating traffic rules, man-made disasters such as terrorism, theft, etc, natural disasters like earthquakes or tsunamis, etc.

3. Is it mandatory to have two-wheeler insurance?

Yes, in India, it is mandatory to have two-wheeler insurance with a third-party liability cover. The requirement is enabled by the Motor Vehicles Act 1988.

4. What are the reasons behind road accidents?

The main reasons behind road accidents in India:

  • Drink and driving
  • Red light jumping
  • Over speeding
  • Inappropriate overtaking
  • Distracted driver
  • Adverse conditions of roads
  • Avoiding the use of seat belts or helmets
  • Breach of lane driving

5. What are the insurance premium rates for two-wheelers as per the IRDAI?

The latest rates issued by the IRDAI for two-wheeler insurance for third-party cover range from INR 538 to INR 15,117, depending upon the cc and the insurance term. These rates are effective from 1st June 2022.

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