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How to calculate bike insurance premium?

Bike insurance premiums depend on coverage type, Insured Declared Value (IDV), location, security features, and usage. Choosing the right coverage and add-ons ensures adequate protection for your bike.

  • 17 Mar 2025
  • 3 min read
  • 25 views

Bike insurance is crucial as it provides protection in case of accidents, theft, or damage to your bike. Understanding how to calculate bike insurance premium is essential for knowing what you're paying for and how it's determined. Read on to understand the details of this calculation.

How is bike insurance premium calculated?

There are several factors that influence how the premium for your bike insurance policy is calculated. They are as follows:

  • Type of coverage:

  1. Third-party insurance: This is mandatory insurance required when purchasing a vehicle. It covers third-party incidence implications that may arise when driving.
  2. Comprehensive coverage: Combines third-party risk and own damage concerning the bike. Although costly, this affords protection from a wide array of potential situations.
  • Bike's value:

The current market value of the bike, known as Insured Declared Value (IDV), is of paramount importance when calculating premiums. IDV refers to the maximum amount claimable by a person in case of total loss or theft of their registered bike. It should be noted that a higher IDV implies a higher premium rate to be paid.

  • Bike's age and model:

The premium for a specific bike varies based on its age and make. Additionally, riding a luxury or popular brand bike usually results in higher premiums due to the higher repair or spare parts costs associated with these models.

  • Location:

The premium you pay for bike insurance can vary based on where you live and where you ride. Areas with higher incidences of accidents or theft, such as busy or vulnerable regions, may result in higher premiums.

  • Usage:

The type of coverage and its premium depend on whether the bike is used occasionally for recreation or daily commuting. It's evident that the more frequently one rides, the higher the risk of an accident.

  • Security features:

Implementing theft-prevention measures can help reduce your insurance premium. Bikes equipped with advanced security features are less prone to theft, which insurance companies often reward with discounts.

  • No claim bonus (NCB):

The bonus you get when you have yet to claim on the policy for the previous year is known as a No Claim Bonus. If you have not claimed any insurance during the previous year, you are qualified for a reduction of the premium you pay on the policy.

  • Rider add-ons:

Add-ons like a Personal Accident Cover or engine protection drive up the premium. These useful features make the policy more valuable but at the cost of a higher premium.

  • Deductibles:

A deductible is the amount you must pay out of pocket before your insurance coverage kicks in to pay the remainder. Opting for a higher deductible can lower your premium but you may have to pay a higher amount out-of-pocket in the event of a claim.

 

Conclusion

Understanding how to calculate the insurance premium for your bike helps you choose the right coverage based on factors like your bike's age, type, engine capacity, and usage location. With this information at your disposal, you can choose your coverage with confidence, protecting both your bike and yourself.


 

Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the Insurance industry and products. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.  

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