Motor Insurance

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According to a report titled ‘Two-Wheeler Market in India 2019’, the Indian two-wheeler market is expected to grow at a CAGR of 7.33%. the report states that from 21.19 million units in 2019, the sale of two-wheelers is expected to reach 24.89 million by 2024. The numbers are not surprising. Two-wheelers are popular means of transport because they are fast, convenient and cost-effective too. In 2019, two-wheelers constituted 75% of the total vehicles operating in India. This bolsters the popularity of two-wheelers and makes them a preferred mode of commute. While two-wheelers are popular, insurance coverage for them is mandatory. The Motor Vehicles Act, 1988 states that your bike should be insured under a bike insurance policy before you drive it on Indian roads. 

What are first-party and third-party two-wheeler insurance covers?

Two-wheeler motor insurance policy covers your bike/scooter against any financial losses due to – accident, fire, theft, man-made disasters, natural calamities and damages to third-party.

A mandatory third-party two-wheeler insurance policy would protect you from financial losses arising due to damages caused to third-party through your bike. Cases of  property damage, bodily injury, disability, death of the third-party person in accidents or mishaps, are covered in the third-party two-wheeler policy.

With the first-party two-wheeler insurance or a comprehensive plan, you can secure coverage for the damages suffered by your bike too in the cases of accidents or mishaps. Add-ons such as roadside assistance and zero depreciation cover can also be purchased for optimum protection.

Features and benefits of two-wheeler insurance plans

Here’s a look at the features and benefits of bike insurance plans – 

  • You can opt for third-party coverage, which is mandatory, or a comprehensive policy. A comprehensive policy is recommended because it provides a wide scope of coverage. You can avail coverage for third-party liabilities as well as your own damage coverage for your bike.
  • Two-wheeler plans are available both as annual plans and long-term ones. However, in the case of a new bike, you have to opt for a mandatory 5-year third-party cover. The own damage cover, however, can be taken on an annual basis.
  • You can enhance the coverage of a comprehensive plan through optional add-ons.
  • You can also avail of premium discounts in a comprehensive policy and pay reduced premiums

Additional Read: Should I buy Third-party Car Insurance or a Comprehensive cover?

How much does a bike or two-wheeler insurance cost?

The two-wheeler insurance premium depends on a lot of factors. These factors are taken into consideration when the premium is calculated. They include the following –

  • The type of coverage; third-party vs first-party two-wheeler insurance

As mentioned earlier, bike insurance plans come in two main variants – third-party plans and comprehensive plans. Third-party two-wheeler insurance offers limited mandatory coverage for losses incurred due to damage to a third person in mishaps and hence is priced low. A comprehensive plan, on the other hand, offers a wider scope of coverage against losses incurred due to damage to third-party as well as to the insured bike in mishaps.

So, depending on the type of policy that you choose for your bike, the premium would be determined.

  • The bike’s/scooter’s age:

Your bike’s age determines the depreciation in its value as well as in the value of its parts. New bikes have low depreciation and a high value. Their premiums are, thus, higher. As your bike ages, its value reduces and so does the premium.

  • Registration location:

The location of your bike’s registration also impacts the premium. Bikes registered in metropolitan cities have higher premiums since the repair costs in such cities are higher. For non-metro cities, on the other hand, the premium is lower.

  • Make, model and variant of the bike:

The make, model and fuel variant of the bike determines its market value. Bikes with higher market values have higher premiums compared to bikes with lower values.

  • IDV of the policy:

IDV or Insured Declared Value. It is the coverage value of the policy, i.e., the maximum liability that the insurer undertakes to compensate you for. The IDV is calculated after deducting depreciation (fixed by the regulator) from the bike’s market value. Premium is directly linked with the IDV. If the IDV is high, the premium would be higher and vice-versa.

  • Add-ons selected:

If you opt for the optional coverage benefits available under comprehensive plans, the premium would increase. This is because each add-on has an additional premium which is payable if you add it to the coverage.

  • Discounts available:

If you choose a comprehensive plan, you can claim discounts for buying a long-term policy, for buying online, for being an existing customer, for installing safety devices, etc. These discounts help in lowering the premium outgo.

  • Claim experience:

Your claim experience also affects the premium. For starters, for every claim-free year, you earn a no-claim bonus. The bonus starts at 20% and can go up to 50%. This bonus gives you a discount on the renewal premium. If, however, you make a claim, the bonus becomes zero. So, if you’ve had a claim in the last year, the bonus would not be available and your premium would be high.

Secondly, insurance companies might load the premium based on your claim experience. So, if you have made a claim, you might have to pay a higher amount of premium when you renew.

Buying the best bike insurance plan

Why settle for anything but the best when buying bike insurance?

There are different bike insurance plans available in the market. Here are a few tips that would help you choose the best bike insurance plan –

  • Go for a comprehensive cover to ensure an all-around protection
  • Choose an IDV that is closest to the bike’s market value. This would help in a higher claim settlement in the case of theft or total loss.
  • Compare the coverage vis-à-vis the premium of different bike insurance plans. Choose a plan that offers the most comprehensive coverage at the most affordable premium.
  • Choose the relevant add-ons for enhancing your coverage
  • Check the network of cashless garages. Choose an insurer that has the widest garage network for ease of cashless claims
  • Compare and choose a policy that offers the maximum discounts
  • Also, check the premium charged for add-ons. The policy should have competitive premiums as compared to its rivals.

Buy the bike insurance plan online for ease and convenience. Moreover, the online mode allows you the facility of comparison so that you can find the best policy.

Wrapping it up

Bike insurance in India is a necessity. While you insure your bike, opt for the right policy so that you get complete financial protection. Moreover, when you compare and buy, you can find the best policy that allows comprehensive coverage without hurting your pockets.

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