Two-Wheeler Insurance Premium - What Affects It and How to Lower It

Your bike insurance premium isn’t random - it’s calculated using specific factors like your bike’s IDV (Insured Declared Value), location, age, and add-ons.

Knowing how insurers determine these numbers can help you make smarter choices and save hundreds every year.

In where traffic, theft rates, and weather vary by RTO, understanding premium logic can help you adjust IDV, keep your No Claim Bonus (NCB), and reduce cost - without cutting protection.

This article explains how two-wheeler insurance premiums are calculated and how to legally lower your bike insurance price through comparisons and smart renewals.

How Two-Wheeler Insurance Premium is Calculated

A bike insurance premium includes two parts:

Component	What It Covers	Who Decides
Own Damage (OD)	Damage to your own bike from accident, theft, fire, or natural disaster	Determined by insurer
Third-Party (TP)	Legal liability for injury/damage to others	Fixed by IRDAI

Formula: Total Premium = OD Premium + TP Premium + Add-ons – Discounts (NCB, Anti-Theft, etc.)

Factors That Affect Premium

1. IDV (Insured Declared Value)

Your bike’s market value - the higher the IDV, the higher the premium.

Set a realistic IDV to balance payout and cost.

Bike Age	Typical Depreciation
0–1 year	5–10%
1–2 years	20%
2–3 years	30%
3–4 years	40%
4–5 years	50%

Pro Tip: Don’t understate IDV to save money - it reduces claim payout.

2. Bike’s Age and Type

New or high-end bikes cost more to insure. Commuter and scooters have lower premiums; sports bikes or superbikes attract higher OD and TP premiums.

3. State & RTO Location

Insurers classify areas as:

Zone A: Metro cities - higher accident/theft risk → higher premium.
Zone B: Smaller cities - lower risk → cheaper premium.

Example: A Pulsar costs ₹8,500, while the same bike costs ₹7,900.

4. Cubic Capacity (CC)

Higher CC = higher risk and speed → higher TP rate.

Engine Capacity	Avg. TP Premium (₹)
<75 CC	₹538
75–150 CC	₹714
150–350 CC	₹1,366
>350 CC	₹2,804

(IRDAI fixed rates for FY {Y})

5. Add-ons Chosen

Each add-on adds value but increases premium:

Zero Depreciation: +10–20% of OD.
RSA: +₹200–₹500.
NCB Protect: +5–10%.
Engine Protect: +₹300–₹800.

6. Claim History

No claims = up to 50% NCB discount. Each claim resets NCB to 0%.

7. Modifications or Accessories

Expensive accessories or engine modifications increase IDV and premium. Keep invoices handy if you add performance parts or safety equipment.

How to Lower Your Bike Insurance Premium Legally

1 Maintain a clean claim record - keep NCB intact for up to 50% savings.
2 Compare plans before renewal - prices vary widely by insurer and RTO.
3 Bundle long-term plans - multi-year policies cost less per year.
4 Install anti-theft devices - ARAI-certified locks offer ~2.5% discount.
5 Opt for voluntary deductible - higher deductible = lower OD premium.
6 Skip unnecessary add-ons - keep only what matches your usage.
7 Renew before expiry - avoid break-in loading or inspection fees.

Average Premium Range

Bike Type	IDV (₹)	Annual Premium (₹)	Typical NCB (Max)
Scooter	₹60,000–₹90,000	₹600–₹1,000	50%
Commuter Bike	₹80,000–₹1,20,000	₹900–₹1,400	50%
Sports Bike	₹1,50,000–₹3,00,000	₹1,800–₹2,800	45–50%
Electric Bike	₹1,00,000–₹1,80,000	₹800–₹1,500	40–45%

Local Insights

Avg. premium difference between top insurers: ₹1,200.
Top 3 most insured models: Activa 6G, Splendor Plus, Pulsar 150.
% of riders with active NCB: 68%.
Insurers with cheapest rates: TATA AIA, Kotak General Insurance, and Oriental Insurance.

How Policybachat Helps you Save

Compare live premiums from 20+ IRDAI-approved insurers.
Auto-calculated IDV per your RTO.
Shows real-time discounts and NCB retention.
Add-on bundling to optimize price vs protection.
Renewal reminders to prevent policy lapses.

Frequently Asked Questions

What is IDV in bike insurance?

It’s your bike’s current market value used for claim settlement.

Does a higher IDV mean higher premium?

Yes, but also higher claim payout.

How can I reduce my premium legally?

Compare, retain NCB, and remove unused add-ons.

Does location affect premium?

Yes, metro cities cost more than smaller towns.

Can I get discounts on bike insurance?

Yes, through NCB and anti-theft devices.

Are electric bikes cheaper to insure?

Slightly - IRDAI offers EV premium discounts.

How much can NCB save me?

Up to 50% on Own Damage premium.

Does claim reset my NCB?

Yes, unless you have NCB Protect add-on.

What is voluntary deductible?

The portion you pay per claim to reduce premium.

Is Zero Dep worth the extra cost?

Yes, for bikes under 5 years old.

Can I pay in instalments?

Some insurers allow EMI for multi-year plans.

Do add-ons increase renewal cost?

Yes, but offer higher protection.

Will modifications affect IDV?

Yes, increased value means higher premium.

Does bike color impact price?

No, only engine capacity and IDV matter.

What’s the cheapest way to buy insurance?

Compare online and keep NCB intact.

Customer Reviews

“Learned how premium works - saved ₹400 instantly.”

Ravi G., Delhi

“Used the calculator - exact match to what insurer quoted.”

Sneha D., Hyderabad

“Helpful guide for new riders like me.”

Kavita R., Chennai

“Kept NCB for 3 years - now paying half premium.”

Arjun M., Bengaluru

“Great tips on lowering premium legally.”

Vikram T., Mumbai

“Transparent tool - love PolicyBachat’s premium breakdown.”

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Two-Wheeler Insurance Premium - What Affects It And How To Lower It