Knowledge Centre

Factors Affecting Two Wheeler Insurance Premium

This blog has been published on June 19, 2020, EST Read Time: 5 minutes

In order to safeguard your bike against natural and man-made mishaps, a comprehensive two-wheeler insurance policy is a must. When your bike is covered by a good insurance policy, you are free from the headaches of sudden expenses that might occur in case of theft or accident.

If you are planning to buy a two-wheeler insurance policy, it is important to understand that there is no fixed premium for a particular vehicle model. There are different factors that affect the premium of your two wheeler insurance. Let us have a look at these factors –

Type of Insurance Policy

Every insurance company offers two types of insurance policy for two-wheelers. The third-party cover is the bare minimum policy which is mandatory by the Indian law and covers only for the third-party damage. The comprehensive cover policy provides all round protection and provides coverage against theft, natural and man-made mishaps, and accidents along with third-party damage.

Considering the benefits it offers, the premium for a comprehensive cover will be more as compared to the premium for third-party cover.

Type and Condition of Two-wheeler

Different bikes have different specifications and therefore, the cost of insuring them is also different. A bike engine’s cubic capacity is the deciding component that affectsthe insurance premium. Higher the cubic capacity, higher will be the insurance premium.

In addition, the age of the vehicle, type of bike model and class of the vehicle, place of registration, fuel type, and the number of miles covered also affect the premium price.

Risk Evaluation Based on Driver’s Record

Not many people are aware but your age, gender, driving record and driving experience can also affect the insurance premium. In such instances, companies calculate the associated risk factor and accordingly charge the premium. For example, a young driver (in the early 20s) with a year of driving experience will be charged a higher premium as compared to a middle-aged, experienced bike driver.

Bike’s Market Value

The current price or market value of the bike also affect the insurance premium. The market value of the bike depends upon its brand and functionality. Quite naturally a Royal Enfield will cost more than a Honda Activa. So, the premium for the first will be higher than later.

If the vehicle is old, the premium is decided based on the condition of the vehicle as well as its resale value.

Add-On Covers

Add-on covers can help in increasing the coverage area and amount. There are many add-ons available for two-wheeler insurance such as zero depreciation cover, personal accident cover, medical cover and cashless hospitalization cover. The more the number of add-ons, the higher will be the premium. Therefore, choose only those covers that you deem necessary such as the zero depreciation cover.

Modifications Done on Bike

Many people love adding accessories to bike in order to improve its aesthetic and performance. However, these modifications are usually not covered under the standard insurance policy and you might need to purchase add-on cover for these modifications. However, adding these modifications under your insurance policy can increase the policy cost thereby increasing the premium.

A gap in Policy Renewal

Any gap in policy renewal can result in policy lapse ripping you off yearly discounts and no claim bonus. Renewing the policy before the due date can reduce the premium by as much as 50%. Therefore, it is recommended to set annual reminders for renewal or buy long-term two wheeler insurance policy.


The best way to know about your bike insurance premium is to make use of an online bike insurance calculator and enter relevant details. You can also change different parameters and check the change in premium owing to different factors of consideration.

Make sure you consider all the above factors carefully to get maximum coverage at the lowest possible premium value.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

This blog has been written by

S. Gopalakrishnan | Motor Insurance Expert | 40+ years of experience in insurance industry

A veteran in insurance industry. S. Gopalakrishnan is a name to reckon with in the field of reinsurance, he has headed the Reinsurance department and has rich experience in other fields of motor insurance. He loves to share his opinion on latest topics in the insurance industry and how he can help people in safeguarding their assets using insurance products.

Mr.S. Gopalakrishnan recommends "HDFC ERGO for your vehicle insurance needs, it has always put customer’s interest at the forefront, with round the clock assistance to deal with emergency breakdown issues and hassle free claims process. You can be assured of complete and reliable guidance through the whole process."

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