Most factors that affect bike insurance policy premium

bike insurance policy premium

Due to the bumpy lanes, potholes, and ever-busy streets, driving on Indian roads is an adventure. Considering these factors, many prefer two-wheelers as they save time and money. 

The downside to riding your bike to work is that you are constantly exposed to numerous risks. A comprehensive bike insurance online policy will protect you from unfortunate mishaps on the road, personal injuries, theft, and third-party liabilities. Buy bike insurance online from square insurance brokers easily and be safe.

An online Bike insurance policy covers you against the risk of damage or loss in exchange for an annual premium. What determines the amount of bike insurance premiums? Are there any differences based on the model or your riding experience? Let’s look at the factors that affect the cost of two-wheeler insurance.

Cost factors for bike insurance policies

There has been an increase in two-wheeler traffic on Indian roads, increasing the risk of accidents. To prevent these risks, the Indian government has made insurance mandatory for all vehicle owners. An excellent bike insurance policy is a must for bike owners. Why does buy bike insurance policies cost that much? Let’s take a look at these factors to find out.

Insurance premiums for two-wheelers: Factors to consider

The following factors influence a bike insurance policy’s cost:

  • Make and model

Price is affected by the make and model of a bike. A bike insurance rate is influenced by the manufacturer and model of the bike since bikes are insured to protect their value. A low-cost bike will also result in a cheaper insurance rate. Sportbikes are more expensive to insure, so you’ll have to pay a higher bike premium.

  • Age of the bike

When calculating the coverage of two-wheeler premium”, the age of the bike is also taken into account. Because of this, all insurance portals require you to enter the age of your bike when purchasing a bike insurance plan. The value of a new bike is higher than that of an old bike, so the former will have a higher premium, whereas the latter will have a lower premium.

  • IDV (Insured Declared Value)

Based on the Insured Declared Value, we can estimate the bike is worth it. Since depreciation decreases the value of a motorcycle over time, the IDV is calculated once a year. Bicycle insurance providers can only compensate up to the value of the bike, so the IDV is taken into account when calculating bike premiums.

  •  Engine capacity

The engine capacity of the bike is one of the most critical factors that determine the price of bike insurance premiums. Engine size (cc) is calculated using the engine’s cubic capacity. Insured motorcycles with engines under 75 cubic centimeters will have lower premiums. The cost of bike insurance coverage will be higher, however, if your bike is 350cc.

  • Theft-prevention devices

The Automobile Research Association of India (ARAI) certifies many security gadgets offered for discounts by insurance companies. As modern technologies reduce the likelihood of bike theft and loss, the insurance companies’ responsibility to provide compensation will be reduced if your bike is fitted with recognized safety equipment.

  • No-Claim Bonus (NCB)

Insurers reward policyholders with a No Claim Bonus if they do not claim during the policy year. As a result of the NCB, the following policy year’s premium will be discounted. Your chances of accruing this advantage are increased by 50% if you have been claim-free for a sustained period and drive responsibly. Since the NCB discount will be deducted from the insurance premium, the premium will be altered.

  • Modifications

It is always a trade-off when you add accessories or modify your bike to enhance its aesthetics or performance. An insurance policy’s cost may increase due to such a modification. Before making any changes, it is advised to notify the insurance provider and understand how they will impact the two-wheeler premium amount.

  • Covers for add-ons

Additional features can be added to your bike insurance policy with add-on covers. In addition to the premium quote, such covers are additionally charged. You will therefore have to pay a higher premium if you buy more add-ons. It is recommended to purchase add-on covers that meet your insurance requirements to avoid paying for a costly insurance plan. Don’t overdo it, and only buy the coverage you need.

  • The type of insurance

The type of coverage you select will largely determine how much your bike insurance premium will be. Comprehensive bike insurance offers comprehensive coverage, while third-party insurance only covers third-party liability.

The premiums for third-party insurance are lower since its scope is narrow. By the mandate, third-party insurance is the minimum requirement. In contrast, if you choose comprehensive coverage, your premiums will be slightly higher, but they are worth it.


Selecting motorbike insurance should take into consideration the elements mentioned above. Once you know these aspects, you can calculate the correct coverage premium for your motorcycle. You can also figure out the premium using the calculator that comes with it. It’s just a matter of evaluating several policy quotes and choosing the best one for you. You can get a low-cost insurance policy to protect your bike, which will help it stay safe.


  • What can I do to reduce the cost of my bike insurance?

Two-wheeler insurance premiums can be reduced by following these tips:

  • Online comparison of insurance plans
  • Don’t make small claims
  • Make sure you install anti-theft devices
  • Limit the number of riders
  • Get a discount by asking
  • Insure your bike for a long period
  • Online insurance for two-wheelers
  1. Do I have the option of transferring my bike insurance policy between insurers?
    Yes, of course. The process of switching bike insurance providers is quite simple. Visit our platform to learn how to transfer bike insurance to Finserv MARKETS!


  1. How are premiums affected by four factors?

Your auto insurance premium is affected by four factors

  • Driving experience or age. Insurers typically charge more for policies for young drivers and those with less experience. 
  • Your vehicle’s make and model. 
  • History of driving and claims. 
  • Location geographically.
  1. How do lower insurance premiums occur?

Car insurance policies are cheaper the less risky your rating factors are. The type of vehicle and driving record are two factors that significantly affect car insurance rates. Several other factors are less important, such as gender and marital status.

  1. How do essential premium factors work?

An insurance charge is adjusted for acquisition expenses, underwriting expenses, profit, and loss conversion factors. Taxes and claims adjustment expenses are not considered when calculating retrospective premiums.

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