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Bike Insurance Guide

Bike  Insurance Guide

Sunny has been waiting for this day for a long time. Although he was already an expert rider by the time he turned 16 years, he knew that he couldn't try his hand on full-fledged bike riding on the road until he turned 18. Thankfully, he is turning 18 next month and is excited to ride his own two-wheeler, as promised by his father. So, you can imagine the excitement he’s experiencing now!

However, his father has laid down a condition before Sunny could have his own bike. He needs to get all the required documents like RC, two-wheeler Insurance, and the like, in place on his own. By doing so, his father wants to ensure that Sunny understands the importance as well as the responsibility of riding own vehicle on the road.

Even though Sunny was confident about getting RC, PUC, and DL easily, he was not sure about buying the best bike insurance online, as he was confused with so many policies available in the market. Also, he was not sure which insurance type he should pick to suit his new two-wheeler.

To clear all the confusion, he planned to visit his uncle who works in the insurance sector. Let us see in this post how Sunny's uncle cleared his doubts about two-wheeler insurance and how he benefited from it.

Sunny is not the only case here. There are many people like him who are confused about the jargons of insurance and who want guidance on buying the best two-wheeler insurance online. With this post, we look forward to guiding and supporting all such people with step-by-step two-wheeler insurance online. So, let's get started!

Sunny's uncle began his session by making him understand the meaning and importance of insurance.

What is two-wheeler insurance? Why is it necessary to insure your two-wheeler before taking it to the road?

A two-wheeler insurance is a policy that covers the insured or the policyholder against the damages caused to his/her two-wheeler due to accidents, vandalism, theft, and the like. Moreover, insurance protects your vehicle against damages caused by natural calamities as well as man-made disasters. Most importantly, insurance covers you against third-party injuries and damages.

But who is a third party in insurance? In vehicle insurance, a third party is a vehicle or a person on the road who is affected by the first party or the rider of the insured vehicle due to accidents, collisions, and the like.

So, while driving his two-wheeler, if Sunny loses control and collides with another two-wheeler on the road causing it certain damage, his two-wheeler third-party bike insurance provider (the second party in insurance) would compensate for the damages.

Further, in India, it is illegal to drive a vehicle without insurance, which answers your question as to why you must insure your two-wheeler before taking it to the road.

Types of Bike Insurance

Types of Bike Insurance

After learning about the meaning and importance of bike insurance, the next significant thing to know is the different types of bike insurance policies available.

There are two types of bike insurance in India. One is Third-Party Bike Insurance and the second is Comprehensive Bike Insurance.

Now, you already know that third-party insurance offers coverage for any kind of liabilities incurred against a third-party person and property. This is a less-expensive policy as it covers only the third party and not your own bike damages.

On the other hand, the Comprehensive Policy covers both third-party damages as well as harm caused to your own bike. In fact, a comprehensive plan allows a wider range of protection against different risks, including loss or theft of bike, riots, natural disasters, and accidents, among others.

Furthermore, you can avail different riders or add-on covers that are available only with comprehensive plans and not with third-party policies. As such, this policy comes with a slightly higher premium rate, in line with the numerous benefits it allows.

It depends upon you to decide which type of insurance is best for your two-wheeler; however, you must consider that your own vehicle should get coverage under bike insurance.

So, on the basis of the above information on the meaning and types of bike insurance policy, below are some key highlights of bike insurance to remember:

Types of Bike Insurance

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Key Highlights

Insurance Feature
Coverage The rider in India can choose from a Comprehensive or Third-Party Insurance only
Personal Accident Coverage The insured can avail personal accident cover under their bike insurance
Add-On Cover The insured can avail additional coverage, such as zero depreciation add-on, pillion accident cover add-on, etc., by paying an extra cost
No-Claim Bonus (NCB) You can easily transfer your NCB if you switch from one insurer to another
Discounts Several discounts are offered by the IRDAI under your bike insurance for those who are eligible
Premiums Start at around INR 500 to INR 1500/annum (for third-party policy)
Online Renewal/Purchase Available for both renewal and purchase
Cashless Garages Available

Premium Calculation

Premium Calculation

When it comes to calculating the premium of your insurance, the features of your two-wheeler play a crucial role. The key feature in this regard is the Cubic Capacity (CC) of your two-wheeler, along with the location where you have purchased the insurance, the IDV or Insured Declared Value of the bike, the age of the vehicle, as well as the coverage that you have opted for your bike and its accessories. All these factors together decide your bike insurance premium. Further, if you avail any add-on cover or rider, you must pay an extra premium in that case.

There is a premium calculation tool called bike insurance premium calculator that can be used to compute the premium that you need to pay for your bike insurance plan. So, depending on the two-wheeler that Sunny's father is gifting him, he can use the details mentioned above and feed them in the two-wheeler vehicle insurance premium calculator to compute his premium amount.

Premium Calculation

Bike IDV

Next comes IDV in bike insurance. If you are wondering what IDV in bike insurance is, read on. Insured Declared Value (IDV) implies the value of the vehicle at the time of its purchase, which remains constant during the term of the policy. There is a formula to calculate the IDV value of a bike.

You can calculate the IDV of a two-wheeler by adding the ex-showroom price of your bike plus the sales tax plus the cost of accessories which are not counted in the selling price. All these costs are added and then subtracted by the cost of depreciation plus the registration as well as the insurance cost.

Below is the formula:

IDV = {Manufacturer's Ex-Showroom Price + Sales Tax + Cost of Accessories not included in the listed Selling Price} - {Cost of Depreciation + Registration & Insurance Costs}

The cost of depreciation is calculated as follows –

Age of the bike Rate of depreciation
Up to 6 months 5%
More than 6 months but less than a year 15%
More than a year but less than 2 years 20%
More than 2 years but less than 3 years 30%
More than 3 years but less than 4 years 40%
More than 4 years but less than 5 years 50%

For bikes that are more than 5 years old, the IDV is determined mutually between the insurer and the insured.

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Bike Depreciation

Bike Depreciation

Depreciation on a bike refers to the loss in terms of the value of your bike which is caused over time due to regular wear and tear. While buying your bike insurance, the bike depreciation rate helps the insurance provider to decide the current worth of your bike in the market.

Now, if you buy a zero depreciation bike insurance add-on, the insurer would not consider the depreciation in your bike while compensating for your claims. If you are wondering what is zero depreciation in bike insurance, it is an add-on coverage that the insured can buy along with a comprehensive bike insurance. With zero depreciation in bike insurance, you will receive the complete amount of your claim that you have raised without considering any depreciation, which helps you save enough.

Bike Depreciation

Bike Insurance Grace Period

Bike Insurance Grace Period is the time duration - around 30 days - that is offered by the insurer to the policyholder to renew the insurance policy after its expiry date. Some insurance companies might provide more grace period for two wheeler insurance, so that the insured can renew the policy without any hassle. Moreover, when the policy is renewed within the grace period, the no claim bonus can be retained.

So, if Sunny doesn't remember to renew his bike insurance policy before its expiry date, due to his exams or any other reason, he can still avail of the benefit of the grace period and renew it to avoid the policy getting lapsed. Also, let us assume that Sunny has earned a certain NCB or No-Claim Bonus on his policy. He can continue enjoying the benefits of the discount if he renews his insurance within the grace period. In case he misses the grace period for bike insurance renewal and the policy lapses, the NCB discount would become invalid too.

Note: NCB is a discount provided by insurers to policyholders for not raising a single claim for their bike insurance during an entire policy year.

Natural Calamities

What are natural calamities when it comes to two-wheeler insurance? If you have a comprehensive insurance policy, you can cover your bike against damages caused by natural calamities like flood, earthquake, and more.

Natural Calamities

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This way, you get protection against expenses for repairing all kinds of damages caused to your two-wheeler due to a natural calamity.

Coverage under Policy

Coverage under policy means the various protections that your vehicle is likely to receive under your two-wheeler insurance plan, or simply said, the inclusions of a policy.

What is Covered under Two-Wheeler Insurance?

  • If you have a comprehensive bike insurance plan, you get coverage against damages and losses caused due to natural calamities, as already mentioned above
  • You also get coverage against damages caused by man-made disasters like fire, riots, strikes, malicious acts, etc.
  • You get covered against accidental and other damages caused to your bike
  • You get coverage under personal accident cover available with all bike insurance policies
  • If your bike gets stolen or catches fire, you can get coverage against such misfortunes as well
  • It covers you against third-party liabilities

What is Not Covered?

While buying a bike insurance policy, people generally read the policy document to check for various inclusions covered under their policy. However, what they miss out on are the exclusions of a policy. Let's take a look at some of these exclusions:

  • Your insurance will not cover the regular wear and tear of the vehicle
  • It will not cover against any electrical breakdown
  • You will not get coverage for loss caused due to depreciation of the bike
  • Damages to tyre, tubes are also not covered
  • It will not compensate if the damage is caused when the person riding the vehicle was under the influence of toxic substances like drugs or alcohol
  • If the person riding the bike doesn't have a driving license, the insurer would not pay compensation

So, Sunny and everyone like him who loves to ride bikes should remember all details of exclusions to avoid making any mistakes while on the road.

Bike Insurance Add-ons and their Benefits

Two-wheeler Insurance Add-ons are additional protection features offered with comprehensive policies. You can avail such bike insurance benefits at the time of buying your policy or while renewing it. However, remember that buying add-ons raises the premium price of your policy. Here are some popular add-ons that you can buy with your bike insurance:

  • No-claim bonus add-on This add-on protects the No Claim Bonus discount that you are entitled to receive by not raising any claims during a policy period. With this add-on, you can protect your NCB discount even if you have to raise a claim later.
  • Zero Dep. cover Under the zero dep. bike insurance add-on, the insurer pays the claim amount without considering the amount of depreciation deduction. Hence, you can get this add-on with your bike insurance policy by paying an extra sum if you do not want the insurer to pay for your claim after deducting the depreciation cost.
  • Roadside assistance cover This add-on helps the insured with 24x7 roadside assistance in case of bike breakdown while on the road. Thus, you need this cover for roadside assistance in case you get stuck on the highway.
  • Lost key replacement The key replacement cover insurance protects against the cost of replacement of your bike keys if you happen to lose them or if they get damaged.
  • Consumable cover The consumable cover add-on helps you save money on minute repairs that you may incur frequently on your bike.
  • Return to Invoice (RTI) cover The return to invoice in bike insurance add-on allows the insured to avail compensation equal to the amount of the original value of his/her bike.

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Compulsory and Voluntary Deductibles

Compulsory deductible is the share of the insurance claim that is compulsorily deducted by the insurer on every claim raised. Only after subtracting the compulsory deductible, the insurer settles your claims.

The amount paid as compulsory deductible is fixed by the Insurance Regulatory and Development Authority of India or IRDAI and every two-wheeler owner has to pay this amount.

For instance, suppose the compulsory deductible on Sunny's bike insurance is INR 100 and he incurred a cost of INR 1200 on his bike repairs. So, his insurer will deduct rupees 100 from the total claim amount and pay him INR 1100.

Voluntary deductible in bike insurance, on the other hand, is the part of the claim that the insured agrees to pay voluntarily from his pocket. In this case, if Sunny chooses to pay higher voluntary deductions, the premium of his two-wheeler insurance decreases significantly.
However, he has to pay a greater share of the claim from his pocket.

Suppose Sunny agreed to pay INR 3000 as a voluntary deductible. This amount helped in reducing his bike insurance premium and he paid a premium of INR 5000 per annum as compared to INR 7000 fixed originally without the voluntary deductions.

However, owing to his misfortune, Sunny met with an accident on the road, causing damage to his vehicle, and incurred INR 8,000 as the total expense on repairs. Now, when he raised the claim, the insurer paid INR 4000 as compensation after deducting the INR 3000 voluntary deductions and INR 1000 compulsory deductible.  

So, that's how it works.

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Two-Wheeler Insurance Renewal

To renew your two-wheeler insurance, you can either visit the nearest branch of your insurance company or get two-wheeler insurance renewal online.

Bike insurance renewal online is the easiest and the most efficient method of renewing your policy.  All you need to do is visit the website of the insurer and fill in the details about your bike insurance policy that is currently active. Now, make the payment using any online payment mode like UPI, net banking, and more, and your policy is renewed! You can also make changes in your policy like buying or removing an add-on before making the payment.

Cashless Garage Network

Cashless garage network is the wide network of garages and bike workshops that the insurance companies tie up with to offer cashless services to their customers or policyholders. Here, the bill of bike repairs is settled directly by the insurer after confirming the details with the insured. This makes the claim process quick and hassle-free.

As such, Sunny's Uncle asked him to make sure that the insurer he chooses has the maximum number of cashless garages listed in their network so that he can avail the cashless facility all over the country. 

Compulsory Personal Accident Cover

With a compulsory personal accident cover, the owner-driver of an insured two-wheeler can get protection against any accidental injuries. In case the owner-driver of the vehicle suffers injuries or permanent disability, this add-on cover compensates for the same. It also compensates in case of death of the owner-driver of the vehicle.

Filing Bike Insurance Claim

Filing Bike Insurance Claim

The most important thing that you must know about how to claim bike insurance is to notify the insurer immediately about the mishap or damage to the vehicle, especially in case of an accident.

To file charges for bike insurance claims, you can choose either of the two ways - Cashless Claims or Reimbursement Claims.

In the case of Cashless Claims, the insurer directly pays the claim amount to the network garage for repairs. To avail this facility, the damaged bike has to be taken to a repair shop or garage that is listed under the network of the insurer.

On the other hand, in case of a Reimbursement Claim, any garage can be picked to get the bike repaired. Here, the policyholder has to pay the expenses initially and can raise a claim later to receive compensation from the insurer. 

Here’s the process for raising a claim for your two-wheeler:

Cashless claims:

  • First you need to notify your insurance provider about the incident as soon as possible.
  • Send your two-wheeler to a network garage where it will be inspected by the insurer's representative.
  • Once the insurer approves, the garage will start the repair process of your bike.
  • The insurer will pay the repair expenses directly. You may have to pay the deductibles.

Reimbursement Claims:

  • You can get the repair of your two-wheeler done at any garage of your choice.
  • You will have to make the payment for the repairs at the garage.
  • You can raise a reimbursement claim from the insurer.
  • The insurer analyzes the situation and reimburses the claim after making the necessary deductions.

Documents Required for Bike Insurance Claim

Documents Required

Below are the documents required for claiming bike insurance:

  • Policy number of bike insurance
  • Contact details of the insured
  • Policyholder's name
  • Details about the incident for which you are raising the claim
  • Extent of damage caused
  • Make and model of the bike
  • Vehicle RC or registration number
  • Time, date, or location of the accident or theft
  • Details of the other vehicle involved in the mishap
  • Name and details of the garage where you have repaired the bike, in case of reimbursement claim
  • Details of eye-witnesses, if any

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To Conclude

With the above details, Sunny is now quite confident to grab a good insurance deal for his  two-wheeler.  Hope it also helped in clearing some of your doubts on bike insurance policies. 

Let's check out some of the most commonly asked questions about bike insurance policy below:

Frequently Asked Questions

A two-wheeler insurance policy implies an insurance cover that protects your vehicle against any kind of damage caused due to an accident, natural calamity, or theft. It also covers the expenses arising out of third-party injuries and vehicle damages.

Buying two-wheeler insurance is mandatory in India because it is illegal to drive a vehicle without insurance. Moreover, insurance protects your vehicle against damages caused by accidents, along with protecting it against the expenses incurred in repairing the damages caused by natural calamities, thefts, and the like. It also offers coverage against third-party injuries and damages.

Depending on the Cubic Capacity (cc) of the engine of your bike, the insurance premium of a third-party bike insurance may range between INR 500 and INR 1200. The IRDAI changes this price every year. However, in case of a comprehensive plan, the price might differ as per the coverage available and various other factors like the age of bike, registration location, and more.

If your bike insurance policy expires, it gets lapsed and your bike is no longer under any coverage. In this case, if any accidental or other damage is caused to your bike, the insurer is not liable to pay for it and you would no longer be eligible to raise any claim. Further, if caught by the traffic police, you would be charged with a heavy fine for driving without insurance.

You can use your bike registration number to get the details of your insurance policy. Visit the portal of the State Transport Department or the Ministry of Road Transport, Government of India, and use your RC number to get details of your insurance.

Yes, it is mandatory to have two-wheeler insurance in India. In fact, it is compulsory to have insurance for all vehicles, two-wheeler or four-wheeler.

Buying two policies for the same bike is not illegal, hence, you can cover your two-wheeler with two policies. However, you cannot claim for any damage caused to your vehicle from both the policies at the same time.  

You can raise your claim with the insurer for your two-wheeler by visiting the insurer's website or through a mobile app. You can either choose cashless claims or reimbursement claims option. In case of a cashless claim, you can take your vehicle to a partner garage for instant repairs. The car insurer will take care of the liability of the damages.

Depreciation is the decrease in the value of a two-wheeler over a period of time due to normal wear and tear.

Voluntary deductible is the fixed amount of money that the insured volunteers to pay from their pocket while raising a claim for their bike. This is in addition to the compulsory deductible which is mandatory. So, voluntary deductible is the share of the claim that the car owner is supposed to pay as per the policy terms and conditions.

If you sell your bike, your bike insurance policy wouldn’t stay valid. Once your bike is officially transferred along with the insurance policy, you become free of any liability associated with that vehicle.

A comprehensive bike insurance policy covers your two-wheeler against loss and damage caused by accidents and other man-made disasters such as theft, riots, and natural calamities like earthquake, flood, thunderstorm, and the like.

Yes, you can buy an add-on cover to insure pillion riders under your bike insurance coverage.

**** The discount varies based on the MMV of the vehicle.
****! TP price for less than 75 CC two-wheelers.