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Basics of A Two-Wheeler Insurance Policy

iding a two-wheeler is sensible and not to forget, an easy way to keep the city’s traffic at bay. However, such convenience often comes with a price. What if there is a boulder stone when you make sharp turns around those dipping curves? What if your prized possession is lost? What if you collide with another biker and you don’t have adequate funds to pay the injured? A two-wheeler policy is what comes to your aid during such a time. 

If you understand the nuances and processes of your two-wheeler insurance then you can not only save money but also take good care of your bike

On this note, let us quickly glance through all the elements of a two-wheeler policy so that you can make an informed choice.


There are two types of two-wheeler insurance policies available in the market:

1. Comprehensive Policy - This policy protects your two-wheeler against burglary and damaged caused due to fire, riot, flood and terrorism. It also offers accidental cover to the rider in case of an accident. It takes care of third party liability or the amount payable to the third party at the time of accident. 

2. Third Party Insurance - This type of policy will only take care of the losses caused to the aggrieved party in case of an accident. This policy does not covers loss or damage caused to your own vehicle.

You may choose a policy that suits your interest best. However, comprehensive policy is a popular choice as it gives 360 degree coverage.

Premium – The Most Important Factor While Buying a Policy

 Have you ever wondered how premium of your insurance policy is computed? These are the following factors which affect premium of a two-wheeler policy.

  • Insured’s Declared Value (IDV)- IDV is the maximum amount that an insurer will pay at the time of a claim. It is the sum insured and is fixed at the inception of the policy period for each insured two-wheeler. It is calculated on the basis of the manufacturer’s listed selling price of the brand & model, and then adjusted as per the standard depreciation rates.

The table given below will give you a better understanding of the co-relation between depreciation value and IDV calculation:


  • CC (Cubic Capacity)- With the increase in CC of two-wheelers, there would be a rise in premium. According to India Motor Tariff, cubic capacity and minimum sum insured can be segmented under below heads-
  • Geography- According toIndia Motor Tariff, the country is divided in two parts- Zone A and Zone B. Zone A includes cities like Bangalore, Chennai, Ahmedabad, New Delhi, Mumbai and Kolkata, while Zone B covers the rest of the country. The premium rates are higher in cities falling under Zone A as compared to Zone B.


  • Vehicle Age- Premium rates increase with the age of the vehicle. Simply put, older your vehicle gets, more the premium you pay to maintain it.
  • Discounts- If you will install an anti-theft device, maintain good credit score and become member of the Automobile Association of India then you might get some discount on the premium. You also get no claim bonus if no claim is made during the policy term.

Policy Renewal

A two-wheeler policy is an annual contract that needs to be renewed every year. Some insurance companies also offer a three year comprehensive policy where you are saved from the trouble of renewing it every year.

If you intend to renew the policy with the same insurer then you can simply call their customer support and get the renewal done. In today’s technology driven world, policy can be renewed with a mere mouse click. Fill policy details at company’s official website, pay online using credit/debit card and net banking and you policy is renewed within minutes.

Insurance companies also offer online renewal of break-in two wheeler policy for those who missed the renewal deadline. In such cases policy is issues instantly without any documentation or verification. Simply, hassle-free!

Claim Processing

How will I get my claim? This is the first concern that every two-wheeler policy buyer is haunted with. Let’s understand all about claim processing.

If your vehicle is damaged due to accident or any other reason, you should immediately inform your insurance company who will make necessary arrangements to settle the claim.  There are two situations under which you claim will be considered. These are:

Total Loss/Constructive Total Loss (TL/ CTL) in a two-wheeler policy= A vehicle is considered to be a CTL, if the aggregate cost of retrieval and/or repair of the vehicle exceeds 75% of the IDV.  If this situation arises, your insurance company will give you IDV amount after deducting depreciation cost.

Theft/Stolen Vehicle= If your vehicle gets stolen, you should immediately register an FIR (First Information Report); the copy of which needs to submit to the insurance company. You may need to transfer your ownership to the insurance company by using title certificate. However, if your two-wheeler is recovered, you won’t get any claim.

Wear helmet to protect yourself and Get coverage to protect your two-wheeler.