Factors that Impact Your Bike Insurance Premium

  • Author :
  • TATA AIG Team
  • Published on :
  • 24/03/2021

Buying a two-wheeler is no longer a luxury but more of a necessity these days. When you decide to buy a two-wheeler, getting two-wheeler insurance for it is mandatory by law. As per the Motor Vehicles Act of 2019, if you are found riding your bike without valid bike insurance, you become liable to pay the Regional Transport Office (RTO) ₹2,000 for the first offence and ₹4,000 if you are caught the second time.

Factors that Impact Your Two wheeler Insurance Premium

This law was passed to ensure that every individual and their two-wheeler are covered under the benefits that two wheeler insurance provides in case of an unfortunate accident.

TATA AIG’s two wheeler insurance policies are designed to protect you from financial liabilities that you might incur in the event of an unfortunate accident, theft or burglary, malicious acts, natural disasters and more. To avail of the benefits of the insurance policy, you have to pay monthly or annual sums called premiums. However, contrary to popular opinion, the premiums for a two-wheeler insurance policy are not always expensive. As many factors determine the premium amount of the insurance policy for your two-wheeler, the premium prices vary for different individuals. This article discusses how to calculate bike insurance premium and the factors that impact the final numbers.

The following factors affect your bike insurance premium:

Type of coverage: As per the Motor Act, it is mandatory by law to obtain a third-party bike insurance cover for your bike/ scooter. However, this policy is standard and only covers damages or injuries caused to the third party in an accident by your two-wheeler. Tata AIG offers a comprehensive insurance policy that covers damages and injuries caused to you, your two-wheeler, and the third-party involved.

As the insurance coverage provided by the comprehensive insurance policy is more, the premium amount charged on this policy is also higher. While you are free to select either of the two insurance policies, it is prudent to opt for a comprehensive insurance policy for the added layer of financial security and benefits it carries.

Make and model of your two-wheeler: Given how the insurance cover is bought to make up for the bike’s value, the make and model of the bike is one of the most important factors that affect the bike’s insurance premium. Thus, if your two-wheeler costs less, the premium amount for its insurance would be lower in comparison to a more expensive bike.

Your two-wheeler’s engine capacity is another factor impacting the premium amount of your insurance policy. The bike’s engine capacity is calculated in cubic capacity (cc). If the engine capacity of your bike is lower than 75cc, you will be charged a lower premium amount. However, if your bike’s engine capacity is higher than 350 cc, the premium amount levied on you will be much higher.

Modification of the two-wheelers: Modifications to your two-wheelers can enhance their performance and visual appeal. However, every modification done to your two-wheeler can increase the insurance premium as each part of the vehicle is insured separately.

No Claim Bonus: The No Claim Bonus in bike insurance is a bonus offered to the policyholder by the insurance company for not raising any claims in a single policy year. The reward is offered in the form of a discount on the insurance premium in the next policy year that follows. At Tata AIG, you can accumulate up to 50% discounts on premiums, after five consecutive no-claim years, through this bonus by being a responsible driver and limiting your damage expenses to the bare minimum.

Add-on covers: Add-on covers are customizable covers you can select to provide enhanced security to your bike and build an all-round insurance policy. There are several add-on covers that you can choose from, including the Zero Depreciation Cover, Roadside Assistance Cover, Emergency Medical Expenses Cover, Consumables Cover, and more.

Even though add-on covers are highly recommended, they come at an added cost and increase your existing premium amount. That is why we recommended that you select the add-ons that are essential for the overall maintenance of your bike. It is also advised that you browse through and choose from the various add-ons available on the TATA AIG website to ensure you get the best deal.

Particulars of the rider: Another factor that impacts the insurance premium is the particulars of the rider. Age, gender, riding history, etc., all play an important role in determining the premium amount. For instance, people who are older are considered to be more responsible and have more riding experience and are charged a lower premium.

Safety and anti-theft devices: Installing safety devices such as a GPS or an anti-theft lock can get you a discount on your insurance premium. This is because these anti-theft devices reduce the chances of your bike getting stolen, which lowers our liability.


Two-wheeler insurance provides extensive coverage in exchange for a little investment. As long as you compare the different two wheeler insurance policies and choose the one suiting your needs most, you will not have spent on insurance in vain. Moreover, remembering the factors mentioned above helps you get a good coverage at cost-effective premium prices and enjoy all the benefits of bike insurance.

At Tata AIG, you can get bike insurance that provides you with 360-degree coverage. You can trust Tata AIG to buy bike insurance as it has a celebrated brand legacy and is well known for its high claim paying capabilities and 98% claim settlement ratios in FY19-20 – factors that showcase its quality of services and reliability.

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Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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