Budgeting your ride: Factors influencing two-wheeler insurance costs

One of the most important considerations is insurance coverage When it comes to owning a two-wheeler. Two-wheeler insurance protects you from financial burdens in case of accidents, theft or damage to your bike. However, insurance costs can differ outstandingly based on several factors. Understanding these factors will help you to budget your ride effectively while purchasing two-wheeler insurance. A walkthrough of the key bike insurance cost factors that influence two-wheeler insurance.

Key factors that influence two-wheeler insurance costs

Mentioned below are some of the key factors that influence budgeting for bike insurance:

Type of coverage

The type of coverage you choose has a direct impact on insurance costs. There are two main types of coverage:


  1. Third-party liability coverage is the mandatory coverage required by law. It protects you financially from injuries or damages caused by a third party. Third-party liability coverage is generally more affordable compared to comprehensive coverage.
  2. Comprehensive coverage protects both third-party liabilities and damages to your bike. It offers a higher level of protection but comes at a higher cost.

Cubic capacity (CC) of the bike

The cubic capacity, also known as the engine displacement, is a significant factor in determining insurance costs. Two-wheelers with higher CC engines are generally associated with higher premiums. This is because higher CC vehicles are considered to have a higher risk of accidents and may cause more significant damages.

Age and value of the two-wheeler

Newer and more valuable bikes are typically more expensive to insure as the cost of repairs in case of damage or theft would be higher. The age and value of your two-wheeler also impact insurance costs. On the other hand, older bikes, may have lower premiums due to their depreciated value.

Add-on coverage and riders

Various add-on coverage options are offered and riders to enhance your policy. These additional coverages, such as zero depreciation, personal accident cover or roadside assistance, come at an extra cost. Considering and choosing the add-ons that align with your needs will impact the overall insurance costs.

Insured declared value (IDV)

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Insured declared value is the maximum amount that will be paid in case of a total loss or theft of your two-wheeler. It is calculated based on the bike’s market value and depreciation. Higher IDV will result in higher premiums.

Location and usage

The location where you reside and use your two-wheeler plays a role in determining your two wheeler insurance costs. Areas with higher instances of accidents or theft may have higher premiums.

No-claim bonus (NCB)

No-claim bonus is a reward given for not making any claims during the policy term. NCB can significantly reduce your insurance premiums. The longer you go without making a claim, the higher the NCB percentage, leading to greater savings on your premiums.

Rider’s age and riding experience

Younger riders or those with less experience are considered to be at higher risk of accidents, thus resulting in higher premiums. The age and riding experience of the insured rider also impact insurance costs.

Claim history

If you have a history of making frequent claims, you might be considered as a higher-risk policyholder and charge higher premiums. On the other hand, a clean claims history can lead to lower premiums and additional benefits such as NCB. Your claim history plays a crucial role in determining insurance costs. 


Budgeting your two-wheeler insurance costs is essential for every rider. Considering these factors can help your budget ride effectively and enjoy the peace that comes with comprehensive two-wheeler insurance coverage. To know more, visit Kotak General Insurance.

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