Shockingly, 60% of two-wheelers in India are uninsured because owners skip buying or renewing policies, treating insurance as an extra burden. This widespread gap makes it much more important to understand the factors that influence premiums. Factors such as engine capacity, registration city, rider history, and coverage choices can significantly change what you pay each year.
So, let us explore 13 such factors that determine the value of your bike insurance premium.
13 Factors That Determine Bike Insurance Premiums
Below are the primary factors that affect your bike insurance premium:
Make and Model of the Bike
The make and model of a bike decides if it will attract a higher or a lower premium. High-end bikes, such as sports bikes, generally attract a higher premium in comparison to regular/standard bikes, commuter bikes, scooters, and more.
Bike’s Engine Capacity (CC)
The cubic capacity of the engine significantly affects the premium. Bikes with a higher CC are considered to have a higher potential for speed and accidents, resulting in a higher bike insurance premium.
The Insurance Regulatory and Development Authority of India (IRDAI) sets the third-party premium prices for bikes as per the table below:
| Engine Cubic Capacity (CC) | Third Party Insurance Premium |
| Less than 75cc | ₹538 |
| 75cc up to 150cc | ₹714 |
| 150cc up to 350cc | ₹1,366 |
| More than 350cc | ₹2,804 |
Age of the Bike
As a bike ages, its market value decreases, leading to lower premiums. However, in some cases, if a bike is vintage or rare, its premiums might be higher. This is because the parts of the bike will be costlier in the market.
Insured Declared Value (IDV)
The IDV is the maximum amount the insurer will pay in case of total loss or theft. If you choose a higher IDV, it will result in a higher bike insurance premium.
The IDV of a bike is calculated in accordance with these depreciation rates:
| Two-Wheeler Life | Depreciation Rates |
| Less than 6 months | 5% |
| Over 6 months, but less than 1 year old | 15% |
| Over 1 year old, but less than 2 years old | 20% |
| Over 2 years old, but less than 3 years old | 30% |
| Over 3 years old, but less than 4 years old | 40% |
| Over 4 years old, but less than 5 years old | 50% |
Modifications and Anti-Theft Devices
Adding performance-enhancing or expensive cosmetic modifications can increase the premium, as these custom parts need to be covered separately. However, installing ARAI-approved anti-theft devices can lead to a discount on the premium, as they reduce the risk of theft.
Riding History and Claims Record
A driver with a clean record and fewer claims in the past years is considered a low-risk customer. They are offered lower bike insurance premiums. Moreover, a history of no claims in a year can also add to your No Claim Bonus (NCB) and give you a discount of up to 50% on your premium.
Policyholder’s Age and Experience
A rider who is inexperienced may be charged higher premiums due to their perceived higher risk. An older or more experienced rider can often get lower premiums on bikes.
Policyholder’s Gender
There are some insurance companies that take into account the gender of the rider. Studies generally show men to be more confident drivers but also riskier than women. This impacts the premium amount of a bike insurance on the basis of gender in some cases.
Type of Coverage
The kind of coverage you get also decides the premium amount. If you just go for third-party insurance, you might have to pay a lower premium in comparison to comprehensive bike insurance.
Add-On Covers
If you go for optional addons such as zero depreciation, engine protection, and roadside assistance, your premium is likely to increase. This is because with enhanced coverage comes higher investment.
Voluntary Deductibles
Voluntary deductibles are the amount that you pay out of your pocket during your claim settlement. When you choose a higher voluntary deductible amount, your bike insurance premium is lower.
Policy Duration
The duration of your policy also determines the premium amount you will have to pay. Many insurance companies provide discounts and offers for long-term policies of three or five years. So, instead of going for bike insurance renewal online after just a year, getting it for a longer duration can lower your premium.
Geographical Location
The registration and primary use location of the bike matter. Metropolitan cities or areas with high traffic density, crime rates, or accident frequency typically have higher premiums compared to smaller towns or rural areas.
Bottom Line
Bike insurance premiums are determined by a combination of factors related to the bike’s characteristics, the rider’s profile and history, the chosen coverage options, and the geographical location. The way you navigate your choices and habits here can determine how cost-effective your bike insurance can be.