bike insurance premium


What are the factors affecting the premium of two wheeler insurance

27th September 2022 8min read 362 views

Almost every Indian family owns a two-wheeler. These vehicles make it easy to move around at your convenience. If you have a bike, you probably also have bike insurance. These plans provide financial security after an accident by helping you pay for repairs. While selecting a two-wheeler insurance policy, most people only check the cost or premium. Understanding how insurance companies calculate the amount can help you choose the ideal policy for your needs. Let’s look at the various factors that impact your insurance premium.

Factors That Impact Your Two-Wheeler Insurance Premium

Type of Coverage

Your premium amount depends on your bike insurance coverage. You can opt to purchase a third-party policy or a comprehensive one for your two-wheeler. Third-party plans only provide coverage for third-party individuals and their property. These plans offer minimal coverage, making them affordable. The IRDAI fixes the two-wheeler third-party insurance premium based on the bike’s engine capacity. If you opt for a comprehensive plan, the premium could vary from one insurer to the next. You must check all your options to identify a policy that provides the best coverage at an affordable rate.

Make and Model

Your two-wheeler’s make and model impact the price and bike insurance premium. Your policy will outline the Insured Declared Value (IDV). It is the highest amount your insurance company will pay if your bike gets damaged beyond repair. Two-wheelers that are more expensive have a higher IDV and a higher premium.

Voluntary Deductible

You may notice voluntary deductible or excess when you purchase a two-wheeler insurance plan. It refers to the percentage of the claim amount you are willing to pay. Most insurance plans have a compulsory deductible of 5% or 10%. If you have the means, you can opt for a voluntary excess over and above the mandatory amount. A higher voluntary deductible will lower your overall premium.

Add-On Covers

You can purchase various add-ons with your insurance plan to enhance your coverage. Most bike owners opt for zero depreciation cover, consumables cover, engine protection, NCB protection, and return to the invoice amount. Each add-on provides a unique advantage that helps you cut your long-term costs. They also come at a price. You will pay a higher bike insurance premium if you opt for several add-ons. Be smart about the add-ons while purchasing your plan. Select add-ons that you will likely have to use based on your riding habits.

Modifications and Accessories

Modifying your bike or adding a range of accessories can impact your two-wheeler insurance premium amount. Covering additional accessories will come at a higher cost.

Anti-Theft Devices

While deciding the premium amount, insurance companies evaluate the risk of covering your vehicle. Bikes with anti-theft devices are difficult to steal or damage. You can install security and anti-theft devices to reduce your bike premium since insurance companies will view you as a low-risk customer.

No Claim Bonus (NCB)

Insurance companies reward policyholders who do not file a single claim in a year with a No Claim Bonus (NCB). You get a discount on your premium amount for the following year. The bonus starts at 5% and increases every subsequent year that you do not file a claim. Since the NCB works as a discount, it helps lower your insurance premium over time.


Once you understand the factors that influence your premium, you can identify the best possible plan for your needs. You can quickly compare coverage options and the bike insurance premium online from the comfort of your home. If you’d like to lower your premium, opt for the voluntary deductible and avoid purchasing unnecessary add-ons. You can also install anti-theft devices on your vehicle for better protection. Every year, you must complete your bike policy renewal before the existing one lapses. Maintaining your insurance coverage fulfils your legal obligation and provides financial protection after an accident.


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