Home News A Beginners Guide To Calculate Third Party Two-Wheeler Insurance Premium Amount

A Beginners Guide To Calculate Third Party Two-Wheeler Insurance Premium Amount


A Beginners guide to calculate third party two-wheeler insurance premium amount: A bike as a medium of transportation provides easy access to the roads. Having a two-wheeler can help to travel places quite conveniently. If you have invested in a bike, it needs to be backed by a valid insurance policy as per the provisions of the Motor Tariff Act, 2002.

The two-wheeler third party insurance is the traditional insurance scheme, and every law-abiding rider should get his vehicle insured through this policy. If a vehicle owner drives his two-wheeler without this cover, he is liable to pay all the penalties imposed by the government. Besides, this insurance policy gives protection owing to the damages like accident, injury, and death on account of a third party. It also bears the liabilities of the insured person.

A Beginners Guide To Calculate Third Party Two-Wheeler Insurance Premium Amount

In the case of policy owners, disability, or property damage due to the third party, the claimable amount can range up to INR 1 lakh. In severe cases like death, the insured’s family can get benefits equivalent to the sum assured in the insurance policy. As a beginner, you need to have an insight into the factors for calculating the two-wheeler third party insurance. This can help in saving some premium costs before zeroing down on policy and can be done by using a two-wheeler third party insurance calculator.

Consider these factors for calculating two-wheeler third party insurance premium:

Policy type: There are generally two categories of a bike insurance policy, the two-wheeler third party insurance and the two-wheeler comprehensive insurance. Remember that in third party insurance, the policy premium amount is comparatively lesser than in comprehensive coverage. The third-party cover only deals with the damages inflicted due to the third party. The comprehensive policy provides overall coverage, which includes natural calamities and man-made events like theft and vandalism. The cost of the premium is eventually more. 

Engine capacity: The cubic capacity of a two-wheeler is a prime factor led down by the IRDAI to calculate the insurance premium amount. It is important for the riders to know the engine capacity as this is directly proportional to the premium cost. The higher the cubic capacity of the bike’s engine, the greater will be the amount of premium and vice-versa. 

Model and registration location: Its model and city of registration also determine the rate of a two-wheeler insurance premium. The model includes all the features, functionalities, and brand of the bike. Also, the two-wheelers registered in Tier 1 or metro city have a higher premium value compared to the two-wheelers registered in Tier 2 or Tier 3 cities

Vehicle Age: The two-wheelers are more like an asset whose value depreciates over time. In the Insured Declared Value clause, it has been mentioned that as time passes and a vehicle ages, the cost of the same gets reduced. IDV is the maximum coverage provided by the insurer if your vehicle is lost or gets damaged. This IDV is related to the current market price of your two-wheeler. However, the depreciation will be higher when a vehicle gets old, which reduces the IDV along with the premium amount. When the bike is new, both the IDV and premium amount are higher. 

No claim bonus: Most of the policyholders seems to be ignorant about the benefits of a no claim bonus. In case any policy owner has not made any claims in the preceding year, they are eligible for a no-claim bonus on the renewal of a two-wheeler insurance policy. The insurer offers it as a reward to the prudent vehicle owner by giving discounts in the insurance scheme. Usually, the discounts start from 20 percent and go up to 50 percent in the successive years.

Anti-theft device: Being a vehicle owner, you can install an anti-theft device that is approved by the Automotive Research Association of India (ARAI), to protect the two-wheeler from being stolen. The cost of the insurance premium can reduce considerably as the insurer can give a discount on the policy premium.

Riding Skills: The riding skill and experience of a bike rider also matter in deciding the value of premium to be paid annually. The riders need to be cautious while riding bikes on the road. In cases of critical accidents, bikers will need to raise the claim against an insurance policy. Numerous such claims can increase the premium amount over a period. Insurers quotes a lower premium amount to a policy owner having an experience of five years than to an owner having one year experience.

Membership: Many insurance companies offer a significant discount to the policyholder in case they have registered their vehicles with the Automobile Association of India. This will lead to a reduction in the premium amount.

You can compare and shop around for a two-wheeler third party insurance by checking the premium quotes online. Besides, tools like the two-wheeler third party insurance calculator are essential in calculating the insurance amount.