Difference Between First-Time Purchase and Bike Insurance Renewal

What Is a First-Time Bike Insurance Purchase?

A first-time purchase refers to buying a two wheeler insurance policy for a brand-new bike. When you buy a new two-wheeler, the motorbike dealer or bike insurance company issues a fresh bike insurance policy before the vehicle is delivered. As per IRDAI regulations, this first-time policy has some mandatory components, namely 5 years of third-party bike insurance coverage and 1 year of own-damage bike insurance coverage, collectively referred to as a comprehensive bike insurance policy.

What Is Bike Insurance Renewal?

Bike insurance renewal is the process of extending your policy coverage after the current one expires. There are two types of bike insurance renewal, explained below:

• On-time policy renewal: Renewing two wheeler insurance before the mentioned expiry date in the policy documents or within the grace period.
• Lapsed policy renewal: Renewing two wheeler insurance policy after the grace period when the policy has already expired.

Pro Tip: Renewing bike insurance on time helps retain benefits like No Claim Bonus (NCB) and ensures you stay legally protected on the road.

Key Differences Between First-Time Purchase and Renewal of Bike Insurance

1. Policy Structure and Mandatory Cover

   First-Time Purchase or Brand New Bike Insurance

   When purchasing insurance for a new bike, the IRDAI mandates a 5-year third-party bike insurance policy and a 1-year own-damage (OD) bike insurance coverage. This is non-negotiable and must be purchased at the time of getting a new bike. 

   On-Time Bike Insurance Renewal 

   Renewal policies typically follow an annual structure for own-damage and comprehensive bike insurance plans. You can also opt for multi-year OD plans depending on the insurer.

   Lapsed Bike Insurance Policy Renewal

   If your policy lapses beyond the grace period (typically 90 days), you may need to purchase a new policy, and the insurer may restructure the term to comply with current IRDAI norms.

2. No Claim Bonus (NCB)

   First-Time Purchase

   NCB is not applicable for new bikes. Since the policy is new, the NCB starts at 0%.

   On-Time Renewal

   You can enjoy NCB benefits ranging from 20% to 50% if you haven't made any claims during the previous policy year(s). This significantly reduces your premium.

   Lapsed Renewal

   If you miss renewing the policy within the 90-day grace period, your accumulated NCB is permanently lost. This increases your premium at the time of renewal.

3. Vehicle Inspection Requirements

   First-Time Purchase

   Usually, no vehicle inspection is required because the bike is brand new and already certified roadworthy by the manufacturer.

   On-Time Renewal

   On-time renewals do not require inspection. Insurers approve renewal instantly.

   Lapsed Renewal

   If the policy has expired beyond the grace period, insurers may ask for a physical vehicle inspection before offering a new policy. This is done to assess to the current condition of the bike, including the presence of damage, existing modifications, and safety worthiness. Any damage found during inspection may not be covered under the new policy.

4. Premium Calculation

   First-Time Purchase

   The premium for new bikes includes a fixed 5-year third-party premium, determined by IRDAI. Only the own-damage portion varies based on the chosen coverage and add-ons.

   On-Time Renewal

   In such cases, the bike insurance premiums may increase or decrease depending on various factors, such as IRDAI annual revisions, NCB discounts, previous claim history, the bike's age, and the purchase of add-ons.

   Lapsed Renewal

   The bike insurance premiums tend to be higher due to various reasons, such as loss of NCB, mandatory bike inspection, re-evaluation of bike condition, insurer risk assessment, etc.

5. Paperwork and Documentation

   First-Time Purchase

   A first-time purchase involves more documentation, such as a bike invoice, registration details, engine & chassis numbers, ID and address proof, and the previous owner's details (in case of resale), among others.

   On-Time Renewal

   Renewing bike insurance online is extremely simple. Most bike insurance providers require information such as the existing policy number, registration number, or basic personal details to renew the policy. The whole process is instant and paperless.

   Lapsed Renewal

   Lapsed renewals require additional steps, such as a vehicle inspection report, photographs of the bike, a copy of the previous policy (if available), and resubmission of basic documents, among others. Submitting all the documents resembles the process of buying a new two-wheeler insurance policy.

6. Claim Eligibility and Legal Implications

   First-Time Purchase

   The coverage begins as soon as the insurer issues the policy. Since TP insurance is mandatory, riding without it means you have to pay a challan of ₹2000/-.

   On-Time Renewal

   If you renew before the expiry, coverage continues uninterrupted, ensuring you remain protected and compliant with the law.

   Lapsed Renewal

   A lapsed bike insurance policy means a total loss of protection. Riding a bike without insurance leads to heavy fines, legal action, and no financial protection in the event of a road accident. A lapsed bike insurance renewal also means insurers may not cover damages that occurred during the no-policy period.

7. Add-On Cover Options

   First-Time Purchase

   Many new owners skip add-ons to keep the initial on-road price low. But it is always a wise idea to buy it according to your riding preferences, needs, and budget.

   On-Time Renewal

   During renewal, owners can re-evaluate and add or remove add-ons based on usage, bike condition, and budget.

   Lapsed Renewal

   All add-ons become optional again, but some (like zero-dep) may not be available for older bikes.

First-Time Purchase vs Renewal vs Lapsed Renewal

Why It is Important to Renew Bike Insurance on Time?

Renewing your bike insurance before the due date ensures that you receive the following benefits:

• Continuous financial protection
• No bike insurance challan or legal consequences
• NCB retention (significant premium savings)
• Zero interruption in coverage
• No inspection headaches

FAQs - Difference Between First-Time Purchase and Bike Insurance Renewal