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Driving on Indian roads is an adventure in itself due to the bumpy lanes, pothole-filled roads and ever-busy streets. Keeping these conditions in mind, many prefer to opt for a two-wheeler that saves time as well as money.


However, commuting on your bike also means that you are always exposed to numerous risks. Be it unfortunate mishaps on the road, personal injuries, theft or third-party liabilities, you must opt for comprehensive bike insurance!


When you purchase two-wheeler insurance, you are entering into an agreement to pay an annual premium in exchange for coverage against the risk of damage or loss. But how is the bike insurance premium amount determined? Does it vary based on the model or your experience as a rider? Let’s find out more about the factors that affect two-wheeler insurance premiums.

Key Factors Affecting Bike Insurance Premium Rates

  • Type of Insurance

It is obvious that your bike insurance premium will primarily be determined based on the type of coverage you purchase. A third-party cover only secures you against third-party liabilities while comprehensive bike insurance offers extensive protection.


Since third-party insurance is narrow in scope, it attracts a lower premium. As you may know, third-party cover is the minimum requirement according to the mandate. But if you choose to expand the coverage to comprehensive insurance, the premium shall be slightly higher, which is worth every penny.


  • Make & Model

As two-wheeler insurance is meant to make up for the vehicle’s value, the make and model of your bike plays an important role in deciding the premium. If you are insuring a bike that costs lower, the premium shall be cost-effective when compared to securing a high-end sports bike.


  • Age of Bike

Another way that your insurance premium gets impacted is by the age of your vehicle. The older the bike, the lower will be its market value. Now, you might believe that this shall lower the premium rate, but an opposing force is at play.


The increased age of your two-wheeler makes it more susceptible to damage, thus, resulting in a higher premium amount. This is also the reason why the insurance provider examines and inspects your vehicle before your policy is approved.


  • Engine’s Cubic Capacity

The engine’s capacity is estimated in cubic capacity (cc) where the premium amount is directly proportional to the capacity of your vehicle’s engine. In case the cubic capacity of your bike’s engine is lower than 75cc, you can avail an affordable insurance premium. However, a vehicle having an engine capacity of more than 350cc will get a higher premium quote.


  • Insured Declared Value (IDV)

Insured Declared Value is an essential component of your comprehensive bike insurance as it is the maximum amount that you can receive on filing a claim. In the event of complete damage or theft, the insurer will pay out the IDV to compensate for the loss.


The IDV of your bike is estimated at the time of buying insurance and is calculated based on the brand, age and model of your two-wheeler. In simple terms, it is the current market value of your vehicle after deducting the depreciation rate. Thus, the higher the IDV, the higher is the premium amount.


  • Anti-Theft and Security Features

You can enjoy a lower premium amount by installing anti-theft devices approved by the Automotive Research Association of India (ARAI). As such security measures ensure a lower chance of theft of the vehicle, your premium amount will be lower when compared to a bike without such safety devices. Hence, it is highly recommended to take such anti-theft measures.


  • Modifications

Whenever you add accessories or modify your bike to improve the aesthetic or to enhance the performance, you are treading on a trade-off. Such modification can lead to an increase in the insurance policy’s cost. Therefore, it is advised to inform the insurance provider in advance and understand how the modifications shall affect the premium amount before going through with it.


  • Add-on Covers

Add-on covers enable you to include additional features to your bike insurance plan. However, such covers come at an additional cost apart from the premium quote. Thus, the more add-ons you purchase, the higher will be the final premium amount. To avoid paying for a costly insurance plan, it is recommended to only opt for add-on covers that fulfil your insurance requirements. So, be prudent and choose to have only the necessary covers.


  • No Claim Bonus (NCB)

No Claim Bonus is a discount that you can avail on your bike insurance renewal premium for a claim-free year. The reward begins at 20% and goes up to 50% for consecutive claim-free years. In case you are switching insurance providers or upgrading to the latest vehicle model, you can take the NCB reward with you! Thus, you can get a lower premium quote if you have accumulated the No Claim Bonus over the years.


  • Voluntary Deductible

Voluntary deductible is the amount you agree to pay in case you are raising any claims. If you volunteer to pay a higher deductible amount, you can get a lower premium quote. However, you should only agree to pay the deductible amount that you can afford. Opting for a higher sum can be disastrous if you aren’t able to cover it during claim settlement.

Parting Thoughts

Now that you are aware of the factors affecting premium rates in bike insurance, you can try availing an affordable quote by installing anti-theft devices and securing the NCB reward. Some insurers also take driver-related aspects into account such as the driving experience of the insured and the claim history. So, head over to estimate the premium amount with our online bike insurance premium calculator now!


Browse through the comprehensive two-wheeler insurance plans available on Finserv MARKETS to enjoy maximum coverage!

FAQs on Factors That Determine Bike Insurance Premium

  • ✔️How can I reduce my bike insurance premium?

    Here are some tips to reduce your two-wheeler insurance premium amount:

    • Compare various insurance plans online

    • Avoid making small claims

    • Install anti-theft devices

    • Opt for a limited number of riders

    • Ask for discounts

    • Opt for a long-term bike insurance policy

    • Buy two-wheeler insurance plan online

  • ✔️Can I transfer my bike insurance plan from one insurer to another?

    Yes. Transferring your bike insurance plan from one insurance provider to another is rather simple. Head over to our platform to learn how to transfer bike insurance to Finserv MARKETS!

  • ✔️Is comprehensive bike insurance mandatory?

    No. Comprehensive bike insurance is optional, however, it is a must when you consider the extensive coverage offered by the policy. Right from protection against theft and calamities to own damage and personal injuries, you can rely on the plan!

  • ✔️What are some lucrative add-on covers that I can add to my bike insurance plan?

    The following add-on covers help you maximise your insurance coverage and save money in the long term:

  • ✔️Do Finserv MARKETS offer online bike insurance?

    Yes. Visit Finserv MARKETS today and opt for a comprehensive two-wheeler insurance policy to safeguard your bike!