• How to Calculate Bike Insurance Premium in India

    Two Wheeler Insurance
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    By Taher | 04 Oct 2023

    How to Calculate Two Wheeler Insurance Premium in India

    When you buy a two-wheeler, regardless of whether it is a used or new vehicle, it is necessary to insure the vehicle with a two wheeler insurance policy. There are a number of general insurance companies in India that offer two wheeler insurance policies with attractive benefits. Two wheeler insurance policies are primarily of two types – third-party liability insurance and comprehensive/bundled/package two wheeler insurance. The premium charged for a two wheeler insurance policy will vary based on the coverage offered by the policy.

    Before you purchase a two wheeler insurance policy, it is important to do your research about the features and benefits offered by the various types of two wheeler insurance policies. You should also compare the premiums quoted by different insurance companies. This will help you purchase a two wheeler insurance policy at an affordable rate.

    You can calculate the premium charged for a two wheeler insurance policyusing the premium calculator tool, which is available on almost all insurer websites. You can also calculate the premium payable through a reliable third-party insurance website.

    What is a Two wheeler insurance Premium Calculator?

    A premium calculator is an online tool that helps you calculate the premium payable for an insurance policy. When you use the premium calculator tool, you will have to key in certain particulars such as the registration number of the vehicle, the vehicle model, the city that you are located at, year of vehicle registration, your contact details, etc. Once you key in these details, the premium quote will be displayed. If you find the premium quote to be satisfactory, you can purchase the policy.

    If you are using a third-party insurance website to compare premiums, you will have to navigate to the respective website and key in the required details. Post this, the policies that are available to you will be listed on the website with the premium charge.

    Benefits of Using a Two wheeler insurance Premium Calculator

    • You can compare the premiums quoted by different insurers through the bike insurance premium calculator tool.
    • The premium calculator tool provides you premium quotes instantly.
    • With an online premium calculator, the entire process of calculating the premium is automated. Thus, it eliminates the risk of human error, biased opinions from agents, etc.
    • There are a number of variables that you will have to input to calculate the premium payable. Thus, using an online premium calculator tool helps you understand the various factors that affect the premium charged for a two wheeler insurance policy.
    • This online premium calculator is available free of cost.
    • You do not have to submit any paperwork to use the premium calculator.

    Premium Rates for Third-Party Liability Insurance Policies

    Unlike in the case of comprehensive/bundled/package two wheeler insurance policies, the premium rates for third-party liability insurance policies are set by the Insurance Regulatory and Development Authority of India, based on the cubic capacity of the bike’s engine. The premiums charged for two wheeler insurance policies, with effect from 1 April 2018, are as follows:

    Engine Capacity Premiums Payable
    Up to 75 cc Rs.427
    75-150 cc Rs.720
    150-350 cc Rs.985
    Above 350 cc Rs.2,323

    In the case of two wheeler insurance policies that also offer an own damage cover, the premium payable is set by insurance providers, after taking a number of parameters into account.

    Factors That Affect Bike Insurance Premiums

    • Types of Insurance Policy: The premium charged for a third-party liability insurance policy is comparatively lesser than the premium charged for a comprehensive two wheeler insurance policy. Insurance providers charge a higher premium for comprehensive two wheeler insurance policies since the latter offers enhanced coverage.
    • Insured Declared Value of the Vehicle:?The Insured Declared Value affects the premiums charged for comprehensive two wheeler insurance policies. The IDV will vary from one two-wheeler to another, based on the selling price of the vehicle and the depreciation rate. If the IDV is high, the premium charged will also be high, and vice versa.
    • Age of the Vehicle:?Age of the vehicle is a vital parameter for premium calculation. The rate of depreciation for a new vehicle is comparatively less when compared to that of older bikes.
    • Engine Capacity:?Premium rates for third-party liability insurance policies are decided based on the cubic capacity of the bike’s engine. If the cubic capacity of the engine is high, the premium charged will also be high.
    • Voluntary Deductible:?The voluntary deductible is a certain amount that the policyholder pays for in the event of a claim. If you opt for a high voluntary deductible, you will be charged a lower premium.
    • Geographical Location:?If you live in metropolitan cities like Delhi, Bengaluru, Mumbai, etc., where the risk of road accidents is high, it is likely that you will be charged a higher premium.
    • Anti-Theft Device Discount:?If you have installed anti-theft devices that are approved by the Automotive Research Association of India (ARAI), you will be offered a discount by the insurer.
    • No Claim Bonus:?If you do not raise any claims during the policy year, the insurer will reward you with a No Claim Bonus. The No Claim Bonus will reduce the premium payable for the following year.
    • Memberships: A number of two wheeler insurance providers also offer discounts to policy buyers who are members of registered automobile associations.
    • Add-Ons: Motor insurance companies give policy buyers the option of selecting add-ons when they purchase two wheeler insurance policies. These add-ons can help the policy buyer avail enhanced coverage. That said, when you opt for an add-on, your premium payable increases. Thus, it is necessary to only opt for add-ons that you require.
    • Previous Claim Record: Certain insurance providers also take the policy buyer’s claims history into account when deciding the premium rate. Individuals who have raised a number of claims in the past may be charged a higher premium, given that the risk undertaken by the insurer will be higher, in this case.
    • Modifications: Modifying your two-wheeler to enhance its performance or aesthetic value will increase the risk that the insurer undertakes. Thus, if your two-wheeler has been modified, it is likely that you will be charged a higher premium.

    Tips to Save on Two wheeler insurance Premiums

    • Always buy insurance online. It is fast and convenient and requires minimum or no paperwork. Also, given that there is no middleman involved, the premium is likely to be cheaper, as well.
    • You can opt for a voluntary deductible to lower the premium charged.
    • You can install anti-theft devices in your bike to avail discounts from the insurance provider.
    • Make sure to assess your coverage and only opt for the add-ons that you require.
    • Avoid raising small claims during the policy term to receive the No Claim Bonus.
    • Compare two wheeler insurance policies offered by different insurance companies. This will help you purchase a policy that matches your requirements at an affordable premium rate.
    • Make sure to renew your policy on time. If you don’t renew your two wheeler insurance policy on time, you may lose the accrued No Claim Bonus, which will, in turn, increase the premium payable.

    If you are looking to purchase a two wheeler insurance policy, it is advisable to check the premium quote using the premium calculator tool. Ensure that you do the required research and opt for a policy that suits your budget and your coverage needs.

    Frequently asked questions

    1.What are the documents required to purchase two wheeler insurance?

    The documents that you will need to submit to purchase a two wheeler insurance policy will vary from insurer to insurer. That said, most insurance companies require minimum/nil documentation for two wheeler insurance policies.

    2.What is a third-party insurance policy?

    A third-party liability insurance plan provides cover against damages caused by a third party’s assets or property and injuries sustained by a third party. It is mandatory for all vehicle owners to have at least a third-party liability insurance policy.

    3.What is a comprehensive two wheeler insurance policy?

    Comprehensive two wheeler insurance policies provide an own damage cover, which offers coverage against damages caused to the insured vehicle due to natural or man-made events. Further, this policy also offers a third-party liability insurance cover and personal accident cover to policyholders. The premium for this plan is comparatively high due to the extensive coverage that the plan provides.

    4.Does the premium increase if I make a claim?

    If you raise a claim, you will not receive a No Claim Bonus at the end of the policy term. Thus, the premium payable will increase for the next policy year. Hence, it is advisable to not raise claims for small damages.

    5.What is a deductible?

    Deductibles can be of two types – compulsory and voluntary. The compulsory deductible is a certain part of the claim amount that you will have to bear in the event of a claim. In comparison, you can opt for a voluntary deductible at the time of purchasing the policy. If you opt for a high voluntary discount, the premium charged will be lower, and vice versa.

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