Bike Insurance (Two-Wheeler Insurance)

Bike Insurance is the financial protection that an insurance company provides to its customers in cases of damage to bikes/motorcycles. These damages could be accidents, natural disasters, theft or complete damage to the vehicle. It also protects you against liabilities arising due to damages to any third-party vehicle, property or person.

Benefits of buying a Two-wheeler Insurance policy

  • Safeguard your Finances from Damage

Securing your vehicle with a two-wheeler insurance policy safeguards your financial well-being by protecting you against losses and damages resulting from accidents, natural disasters, fire, or theft.

  • Ensure Legal Compliance!

According to the Motor Vehicle Act, possessing at least Third-Party Bike Insurance is a legal requirement for riding on Indian roads. Obtaining insurance not only offers financial protection but also ensures compliance with legal mandates.

  • Steer Clear of Traffic Fines

Riding in India without at least basic Third-Party Bike Insurance is illegal and can result in substantial traffic fines. Surprisingly, investing in bike insurance is more cost-effective than facing penalties for non-compliance.

  • Enhance Coverage with Add-ons

Opting for a comprehensive bike insurance policy allows you to tailor it with valuable add-ons such as return to invoice cover, zero depreciation cover, breakdown assistance, consumables cover, and tire protection. These additions provide comprehensive protection for your bike against various risks.

  • Mitigate Third-Party Headaches

Accidents often lead to disputes between involved parties regarding damages or losses. Having a bike insurance policy in place ensures coverage for the affected party, reducing the complications associated with third-party claims.

Why is Bike Insurance important?

In India, more than 21 crore people have registered two-wheelers and are using bikes or scooters for their everyday commute. More and more people are switching to two-wheelers because of the high traffic on the roads. Hence, with the increasing number of users, it becomes extremely important to protect them from accidents. 

By making bike insurance mandatory, there is a safety net for the two-wheeler users and gives them a peace of mind that in case of a damage to themselves, their two-wheeler or even to a third party, they will not have to bear any financial burdens. It also protects them from financial losses in case of damage to their two-wheeler in case of natural disasters such as flooding, earthquakes, etc.

Types of Bike Insurance Plans:

  • Comprehensive Bike Insurance:

This is a robust and inclusive form of bike insurance that provides extensive coverage against a wide range of risks. Unlike basic third-party insurance, which primarily covers cost of damages vehicles and individuals who meet with an accident with your two wheeler, comprehensive insurance goes above and beyond by protecting your own vehicle from various accidental damages as well as non-accidental damages like theft, vandalism, natural disasters (e.g., hail, floods, fire), falling objects, and damage caused by animals. Think of it as the all-in-one package that keeps your bike safe from almost anything that comes its way. Comprehensive policies cover both own damage and third-party liabilities. 

  • Third-Party Bike Insurance:

This type of insurance covers the cost if you accidentally cause damage to someone else's bike or injure them in an accident. In India, it is mandatory for two-wheelers to have a third party insurance. So if you ever find yourself in a situation where you accidentally damage a third person’s property or cause injuries, this insurance steps in to take care of the other person's medical bills and repairs for the damages. But remember, it doesn't cover your own bike’s repairs – that's where comprehensive insurance comes in! 

  • Stand-alone Own Damage Bike Insurance:

This is like a personal bodyguard for your two-wheeler! It specifically protects your own vehicle from unexpected damages. Unlike regular comprehensive insurance that covers both your two-wheeler and damages to others, Standalone Own Damage focuses solely on your vehicle. So, if your bike gets scratched, dented, or needs repairs after an accident or even in case of non-accidental damages like theft, vandalism, natural disasters (e.g., hail, floods, fire), falling objects etc, this insurance has your back! It's a great option if you want to give your bike a little extra protection. 

Comparison of different types of policies:

Coverages

Third party

Comprehensive

Standalone Own Damage

Accidental damage to your two-wheeler

X

Damages by natural calamities such as floods, earthquakes, cyclones, etc.

X

Damages by Man Made disasters like riots, terrorist activities, strikes etc

X

Losses from fire or theft of your two-wheeler

X

Injuries/Death of a Third-Party Person

X

Damages to Third-Party Property/Vehicle

X

What is not covered?

  • Damages to own two-wheeler for Third-Party Policyholders:

In the context of a Third-Party or Liability Only Policy, any damages to the policyholder's own vehicle are not eligible for coverage.

  • Damages occurred by Drunk Riding or Unlicensed Operation:

Your two-wheeler insurance will not provide coverage if you were riding under the influence of alcohol or without a valid two-wheeler license.

  • Losses due to Non-Compliance with License Regulations:

If you possess a learner’s license and were operating your two-wheeler without a valid license-holder on the pillion seat, claims in such situations will not be covered.

  • Consequential Damages:

Damages not directly resulting from an accident, such as using the damaged two-wheeler incorrectly after an accident leading to engine damage (consequential damage), are not covered.

  • Damages due to Negligent Driving:

Any damage arising from contributory negligence, such as driving a two-wheeler in a flood against the manufacturer’s driving manual recommendations, will not be covered.

  • Non-Coverage of Situations without Purchased Add-ons:

Certain situations are covered by add-ons. If these add-ons have not been purchased, the corresponding situations will not be covered.

Third Party Bike insurance Rates:

Engine Capacity

Third Party rate for 1 year policy

Third Party rate for 5 year policy (New 2 wheeler)

Not exceeding 75 cc

₹538

₹2,901

Exceeding 75cc but not exceeding 150 cc

₹714

₹3,851

Exceeding 150cc but not exceeding 350cc

₹1366

₹7,365

Exceeding 350 cc

₹2804

₹15,117

Add-on Covers in Bike Insurance:

Add-on covers are special extra benefits that you can get in your insurance policy if you buy a comprehensive or standalone own damage policy. These covers can be tailored to the needs of different customers and provide extra protection. The different types of covers are:

  • Mandatory Personal Accident Cover: 

This cover is mandatory in India under the Motor Vehicles Act. This cover provides financial stability to the injured or the dependents  in the case of personal injury or death. Due to the increase in the number of accidents on the road, this cover was made mandatory in 2002. The insured should hold a valid driving license to buy this cover and should be in the age bracket of 18 to 65 years. 

  • Zero Depreciation Cover:

Depreciation means the reduction in the value of the bike and its components over time due to wear and tear. In standard insurance policies, when you make a claim for repairs or replacement of bike parts, the insurance company considers the depreciation and takes only the non-depreciated value of those parts for settlement. This means that while the garage charges you a full price for the new parts, the insurance company will settle only the amount calculated after removing the depreciation value of those parts. However, if your policy also has a Zero Depreciation Cover, you can bypass this deduction for depreciation, and the insurance company will cover the entire cost of repairs or replacements without considering the age of the bike or its parts. This means you get higher claim settlements and end up paying less from your own pocket.

  • Engine Protection Cover:

Damages to the engine are not covered by the comprehensive policy. However, an engine is one of the most important components of your bike and can bring significant financial burdens. Events like towing of bike, or waterlogging during heavy rains or driving through flooded areas can cause severe damage to the engine. Without the Engine Protection Cover, you might have to bear the entire cost of engine repairs or replacement, which can be a significant financial burden. Hence, it is a wise decision to buy an engine protection cover. 

  • 24x7 Roadside Assistance Cover:

The 24x7 Roadside Assistance Cover is a valuable add-on that offers policyholders assistance in case of breakdowns, punctures, accidents, or running out of fuel while on the road. This cover provides a range of services, including towing the bike to the nearest garage, flat tire change, battery jump-start, and emergency fuel delivery. Having this cover ensures convenience and peace of mind during unexpected road emergencies, especially during long trips or when riding in remote areas where immediate help might be scarce. It proves to be a reliable companion, offering timely assistance when policyholders need it the most.

  • Tyre Protection Add-On:

This add-on covers the reimbursement of costs for replacing damaged tyres with ones equivalent or closely matching the vehicle's existing tyres, including labor and wheel balancing charges. The damage can range from a simple puncture to a tyre burst.

  • Return to Invoice:

This cover proves to be quite useful in case your bike is stolen or is completely damaged. In such a situation, under this add-on, you will be entitled to get the original purchase price of the bike and not the IDV mentioned in the policy. This cover bridges the gap between the IDV and the actual cost of the bike, helping you replace the lost or stolen bike with a similar one without incurring any significant financial loss.

  • Consumables Cover: 

This add-on provides coverage for certain consumables for your bike like engine oil, nuts, bolts, chain lubricants etc. Although these components do not cost much, they provide a relief to the insured that the insurance company is taking care of these costs and provides end to end assistance. They help in saving expense (up to a certain limit) on small items and should be opted for bikes which are no less than 5 years old. 

  • Personal Accident Cover for unnamed passengers:

This add-on extends the personal accident cover to include unnamed passengers traveling on the insured bike. In case of an accident resulting in injury, disability, or death of a passenger, the add-on provides financial compensation to the affected passenger or their nominee. Having this cover ensures that all passengers are protected against unforeseen accidents during their journey, giving you peace of mind and acting as a gesture of responsibility towards your fellow travelers.

  • Emergency Medical Expenses:

This add-on covers medical expenses for injuries sustained by you and/or co-passengers in an accident. It ensures that you receive necessary medical attention without worrying about the immediate financial burden. The add-on typically covers expenses (up to a certain limit) related to hospitalization, medical treatment, and ambulance services, providing financial relief during stressful situations.

  • Daily Expenses Cover:

The Daily Expenses Cover is designed to provide a fixed daily allowance to policyholders for alternative transportation during the period when the insured bike is under repair due to an accident. This add-on ensures that you can carry on with your daily activities even if your bike is out of commission, without bearing the additional costs of transportation during the repair period.

How to Calculate Bike Insurance Premium?

While calculating premium, it is important to keep in mind certain factors. There are online premium calculators that help in calculating approximate premiums for customers looking to buy bike insurance. Factors to keep in mind are:

  1. Bike's (IDV): The IDV is the current market value of your bike, and it forms the basis for calculating the premium. A higher IDV will result in a higher premium.
  2. Cubic Capacity (CC) of the Bike: The engine's cubic capacity is an important factor in determining the premium. Bikes with higher CC are considered to have higher performance capabilities and might have a higher premium. 
  3. Bike’s Make and Model: The make and model of your bike plays a big role in determining your insurance cost as it affects the IDV. 
  4. Age of the Bike: Older bikes generally have lower premiums compared to newer ones, as their market value depreciates over time.
  5. Geographical Location: The city or area where you primarily use the bike affects the premium. High-traffic urban areas might have higher premiums due to a higher risk of accidents and theft.
  6. Anti-Theft Devices: If your bike is equipped with anti-theft devices approved by the insurer, it can result in a discount on the premium.
  7. Insurance Provider: Different insurance companies have their own algorithms for calculating premiums, leading to slight variations in rates.

Factors to Consider while buying Bike Insurance:

  1. Policy Inclusions: Carefully review what is covered in the policy. Ensure that it includes the essential protections like accidental damage, theft, fire, riots, and natural calamities such as floods, earthquakes, and cyclones. 
  2. Claim Settlement Ratio: The claim settlement ratio indicates how efficiently an insurance company settles claims. Look for insurers with a high claim settlement ratio, as it indicates a higher probability of getting your claims approved without hassle.
  3. Deductibles: Deductibles are the amount you agree to pay from your pocket during a claim. Higher deductibles might lead to lower premiums, but be sure to choose an amount you can comfortably afford in case of an accident.
  4. Network Garages: Check if the insurance company has a wide network of authorized garages for cashless repairs. This ensures easy and convenient servicing in case of a claim.
  5. Customer Reviews: Read reviews from existing policyholders to get insights into the insurer's customer service, responsiveness, and reliability during claim settlement.
  6. Comparison of Prices: Obtain quotes from various insurance providers for the same coverage and features. Compare the premiums to find the best deal. Take note of any discounts or offers provided by insurers, such as loyalty discounts or multi-policy discounts if you already have other insurance policies with the same company.
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