6 Factors to Consider When You Calculate Your Bike Insurance Premium

  • Author :
  • TATA AIG Team
  • Published on :
  • 15/12/2021

Insurance for your bike is an additional layer of protection provided to maintain it to the right standards. Insurance providers have customised the bike insurance policy to suit the individual needs of the customers. Therefore, you can decide on the type and features required based on your income and necessity. However, before you decide, you must be aware of the factors to consider while calculating your bike insurance premium.

Factors To Consider While Calculating Bike Insurance Premium

Two-wheeler insurance and its benefits are extensively based on the premium. The following factors help you calculate it based on the extent of risk present in the vehicle on its usage:

1.Type of insurance- There are three broad types of bike insurance; standalone insurance secures your bike from damages that occurred due to natural or man-made disasters, third party bike insurance protects damages that occurred to a third party vehicle due to your insured vehicle, and the comprehensive insurance provides financial assistance in case of third party liabilities and own damage. As the coverage in a comprehensive policy is broader than the other two, it costs more, leading to a higher premium.

It is important to note here that third-party insurance is mandatory by law in our country. It is available at a reasonable premium, and therefore, you can afford to pay for it on the purchase of a new bike.

2.Cubic capacity- Your two-wheeler’s engine capacity is an important factor determining the premium in the case of both the comprehensive bike insurance and third-party type of insurance. The premium rate increases with the increase in cubic capacity. For instance, a 100cc Bajaj Discover will have a lesser premium rate than a 500cc Royal Enfield Desert Storm. The premium rate based on the cubic capacity for third-party insurance is released by IRDAI every year.

3.Insured Declared Value- Insured Declared Value or the IDV is your bike's market value, which determines the sum assured in case of a claim. The age of your bike is an important factor while calculating the IDV. The market value decreases as the age of your bike increases. Therefore, as your bike gets older, the market value decreases, further reducing the IDV and premium.

4.Make and model- Insurance for 2 wheeler is extensively based on the make and model of your bike. If you have purchased an expensive sports bike, it has a higher market value, increasing the IDV and premium. Insurance providers increase the premium based on the model because the cost of getting the repairs damaged in such expensive bikes is generally high. On the other hand, a basic model bike with fewer features may not involve huge expenses on repairs comparatively.

However, if you have purchased a basic model bike and made some modifications to make it more attractive, it carries more risk as it is highly likely to be stolen. In such cases, the bike insurance premium will get higher considering the risk and the increased cost involved in repairing damages.

And, if your bike has safety devices such as the burglar alarm, it is less likely to be stolen. Therefore, the insurers will decrease the bike insurance premium considering the reduced risk.

5.No claim bonus (NCB)- No claim bonus refers to a discount that you can avail of on your premium on renewal of two-wheeler insurance. It is provided to policyholders who have not filed any insurance claims in the previous financial year. It is a mode of appreciation offered for safe drivers. NCB discounts start from 20% for one claim-free year and can be availed upto 50% for five or more consecutive claim-free years.

NCB can be transferred to your new vehicle if you go for a change from the existing bike you previously insured. The NCB is a token of appreciation provided to you based on your driving and not the vehicle. So, if you are disciplined at driving and can receive the no claim bonus, you can consider the percentage offered by the insurers while calculating the bike insurance premium.

6.Geographical location– The locality in which you stay and own your two-wheeler can affect the kind of damage that can occur to your vehicle. For instance, if you reside at an accident-prone location such as in major cities, where there is always huge traffic, the risk is on the higher side. Insurance providers, therefore, consider the location before calculating the premium.

If the risk factor is considered high, the premium amount also increases. On the other hand, if you stay in a small town or village, you may not be affected by the traffic predominantly, and thus the risk is low, leading to cheaper premium rates.

7.Add-on covers– Add-on covers provide additional protection and financial assistance to your bike in specific situations. Some prominent add-on covers purchased by policyholders are roadside assistance, personal accident cover for the car driver, depreciation allowance, etc. Though these add-on covers get applicable to the mentioned scenarios, it is an additional cost.

However, considering the practical benefits, the increase in bike insurance premium cost is certainly worth the investment. For instance, if you are an extensive traveller exploring different places and driving long distances, you can purchase the roadside assistance add-on to help you in case of an accident on the highway roads.

We have discussed some of the prominent factors that determine the premium rate. There are also other aspects such as your age, riding style and history, gender, etc., that affect the premium to a considerable extent.

Calculating the premium considering the factors mentioned above is simple and cost-effective when you choose the insurance two-wheeler online. At Tata AIG, we provide an online bike insurance premium calculator. You can follow these simple steps to estimate the premium.

1.Enter the Vehicle Registration Number

2.Provide personal details and applicable NCB, if any, and choose the necessary details such as IDV, type of coverage, etc.

3.Submit and get the premium price for your two-wheeler.

You can decide on the add ons based on your affordability and change the values entered through the bike insurance premium calculator to redefine the premium.


Bike insurance is one of the most important financial components to ascertain protection. It can provide financial assistance in case of any damage that causes severe repair costs to your two-wheeler. Therefore, you need to consider certain important factors such as the type of insurance, make and model of the vehicle, geographic location, add-on covers, etc., while calculating the premium amount. So, be informed, read the terms and conditions, use the features optimally, and get maximum protection for your bike cost-efficiently!

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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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