How do insurance companies determine the two-wheeler insurance premium?

Owning a motorcycle or a scooter comes with responsibilities and loads of rules, and getting the best yet cheap bike insurance is one of them. Insurance for a bike is a financial shield for the potential risks and losses your two-wheeler might face.

Even if you follow all the traffic rules, you cannot vouch for others out there on the road. Someone makes some blunder or breaks a rule, and you might have to pay the price in the form of bike damage or some injuries.

Understanding the two-wheeler insurance is equally important. One of the biggest factors in getting bike insurance is paying the insurance premiums. This is an amount that the insured pays regularly in order to protect their bike from risks.

The premium is determined using various factors, and we will discuss those in this blog.

Factors that Determine a Two-Wheeler Insurance Premium

  • Type of Coverage

A lot depends on the type of coverage you demand from the company. For example, there are two types of insurance when it comes to two-wheeler insurance. The third-party bike insurance and the comprehensive bike insurance.

If you opt for third-party insurance, you must pay a lower premium than you would’ve paid for comprehensive insurance. This is because comprehensive insurance offers better, complete, and more coverage compared to the third-party one.

  • Make and Model

The make and model is connected with the manufacturer and version of the bike. “Make” refers to the manufacturer, where reputed and well-known brands translate to a lower premium amount.

This is because of the historical data, performance credibility, and trust in the brand. Whereas the “model” refers to the version of the bike. If it is an expensive model with a higher CC, the premium is higher. This is a very huge determinant of your bike insurance premium.

  • Bike Details

This information contains the bike’s make, model, version, and year of manufacture. Because sports bikes have higher repair or replacement costs than regular commuter cycles, for example, insurance for a high-end sports bike may be more expensive.

Along with the abovementioned information, another important factor in determining the insurance rate is the engine capacity, which is commonly expressed in CC. Since they are thought to be more powerful and possibly more accident-prone, bikes with higher CC typically have higher insurance.

  • Insured Declared Value (IDV)

The maximum amount that the insurance company will pay in case of repair or damage is called the insured declared value.

 This value is calculated based on the current market value of the motorcycle or scooter and decreases as the bike ages. The IDV and the insurance premium are directly proportionate.

  • No Claim Bonus (NCB)

NCB is a reward the company offers in the form of a bonus. This reward is for the policyholders who have not raised a claim throughout the insurance period. This promotes defensive driving and helps to lower the cost of insurance.

  • Add-Ons and Optional Coverage

Roadside help, zero depreciation, and coverage for pillion riders are the kinds of extras that improve the coverage but also raise the cost.

This means the premium increases with an increase in the add-ons. Based on your needs and budget, you must choose whether these add-ons are required.

How to Calculate Bike Insurance Premium?

Today, we can buy bike policy online. In the same way, to calculate the insurance premium for your bike, insurance companies use complex algorithms that consider the factors mentioned above.

However, there are online bike insurance premium calculators available to help you get an estimate of the premium for your specific bike. You can use these calculation tools by providing the necessary details about your bike and personal information.


Understanding the factors that increase or decrease the premium can affect your choices, decisions, and financial plans. Be educated about these things related to your bike insurance, let’s say a TVS Jupiter Insurance.

You can secure your bike with sufficient coverage while keeping the costs manageable by carefully considering the factors affecting your bike insurance premium. Keep yourself and others around you safe on the roadways by ensuring your two-wheeler is insured properly.

Finding affordable bike insurance without sacrificing coverage requires an understanding of the variables that affect your insurance premium. It’s critical to evaluate your needs, contrast various insurance policies, and take into account the elements that influence the premium to make an informed choice. Understand, assess, analyse, and then decide!

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