Now that you are planning to buy a new bike/renew insurance-

  • Are you confused by all the terms that are thrown at you by the companies?
  • Do the words Comprehensive, Third Party, Zero Depreciation sound like Greek and Latin to you?

This guide is going to be of some help. The points we will be covering in this guide are

  1. Purpose of Bike insurance
  2. Definition of accident
  3. Common terms used in Insurance language
  4. What are the types of insurance?
  5. What is no claim bonus?
  6. What is zero Dep insurance policy?
  7. What is cashless insurance?
  8. What is not covered by insurance policy
  9. Documents required for making insurance claim
  10. Hidden things you should know
  11. Things to check in every insurance policy

Now let’s consider them one by one

Purpose of Bike Insurance

In case you are 100% sure that you are going to be a safe rider and all others will also ride safely, no one will crush you and you won’t crush anyone, and finally you have a tonne of money to fix your vehicle and pay for damages to the family in front in case of an accident, you don’t need insurance. But then, we live in a world where uncertainty abounds. Hence, Proof of Insurance – in most cases the policy or the cover note – is one of the mandatory documents you need to carry while riding/driving.

Purpose of bike insurance

It is like the lifesaving buoy here, it provides you safety in case of an accident.

What is accident for Insurance Companies?

In insurance terminology, an accident is the event which is not deliberately caused, and which is not inevitable. For example, if a blind person is driving a car, an accident is inevitable. As and when the accident happens, it wont be treated as an accident by the insurance company. Another example of what doesnt constitute an accident is someone setting fire to their own vehicle to claim insurance. Insurance doesn’t ever cover wear and tear parts and consumables. For Eg. If due to careless riding, the engine of your vehicle seizes, it cannot be claimed under insurance. Breakdowns aren't covered by insurance.

Terms used

  1. Insurer’s Declared Value (IDV): IDV is the amount you declare your vehicle to be worth. IDV = L – L * d(age) Where L is the last policy’s IDV or the invoice cost of the vehicle (excluding all taxes). d(age) is depreciation at the age of the vehicle
  2. Total Loss: In insurance terms, a total loss has said to have occurred in case the total cost of repair would exceed the IDV of the vehicle. For eg: If your motorbike costs Rs 100000 and you submit a claim amount for Rs 100001, the Insurance company will deem it to be total loss and will pay out the IDV and close the policy.
  3. Compulsory Excess:It is a fixed amount that you have to bear from your own pocket for every insurance claim.

Types of Insurance:

types of insurance

Insurance is called as cover just like an umbrella. And like umbrellas, it comes in different colours, sizes and options.

There are basically three types of Bike Insurance:

  1. Third-party
  2. Comprehensive
  3. Zero Depreciation

Third Party Insurance

  1. Damage covered: Third party bike insurance provides you some cushion with limited liability in case you have caused property damage with your vehicle and unlimited liability in case the other party dies, or is disabled or is hospitalized. It means that if the affected party is demanding 50lakh for the death of a person, the insurance company will pay it. However, if the property damage is claimed to be 20lakh, depending on whether you have a commercial vehicle or a two wheeler, the damage paid could be anywhere between 1lakh to 8 lakh. The definition of the term Propertydoesnt include the other party’s vehicle. A third party insurance, also, doesn’t cover damage to the vehicles involved in an accident or injury to you.
  2. This is the cheapest insurance of the lot but also has minimal cover. You MUST buy atleast this insurance to legally run your vehicle on the road.

Comprehensive insurance

  1. Damage Covered: This includes the damage incurred by the third party (humans only – not vehicles). In addition to that, if your vehicle gets damaged, the insurance company is liable to pay for replacement parts of the vehicle damaged in the accident. The cost reimbursed covers a fraction of the cost of the parts. Labour cost won’t be reimbursed. Nor will be consumables such as oil, screws, washers etc. A minimum of Rs. 1000 is deducted on every claim made. The following table explains how much will be reimbursed.
Part typeDeductible valueExample partExample costExample rembursible amount
Rubber, Nylon, Plastic, Tyre, Tube50%Footpeg rubber200100
Paint job50%Touch up1200600


  1. Depreciation of Insurer’s Declared Value (IDV): Depreciation of IDV is calculated using following table. Also, the following table is used to calculate reimbursible amount of parts not listed in the above table.
Age of vehicle% depreciation of IDV
<6 months


6 months < age < 1year5%
1 year < age < 2 years10%
2 year < age < 3 years15%
3 year < age < 4 years25%
4 year < age < 5 years35%
5 year < age < 10 years40%
10 year < age50%
  1. Number of claims per year: In a year, your total claim amount can be more than the IDV – however, any single claim shouldn’t exceed the IDV (see total loss). For eg. If the IDV of the vehicle is Rs 1000000 and you had 4 accident claims each amounting to Rs 120000, Rs 540000, Rs 450000. The total claims would be Rs 1110000. This is allowed, and not treated as total loss.
  2. Premium: There are two components of the premium to be paid to the company for a comprehensive insurance. Own Damage (OD) premium and Third Party (TP) premium. Own damage premium can be negotiated to bring it down. However, this will affect the IDV adversely. If you try reducing premium, the IDV will reduce proportionately.
  3. Losses covered: You can stake claim in case your vehicle is damaged or you have a “total loss” in case of Fire, theft, vandalism, inundation, floods, any natural calamity, arson, accident (unless you are driving under the influence of any drug/alcohol). Any losses occurring due to illegal activities including street racing, stunting etc, are not covered. Legal forms of racing are covered by insurance companies, but that is an all together different insurance.
  4. Death or disability: In case of permanent disability or death of the person driving the vehicle – if the person in question is the owner of the vehicle, all comprehensive insurances provide a cover of 1 Lakh for an additional Rs50 over and above the TP + OD premiums.

Zero Depreciation (Zero Dep) policy

Zero Dep policies are similar to Comprehensive insurance, except for the fact that the full cost of parts replaced is reimbursed. This policy is more expensive than the Comprehensive insurance and can be availed only for the 1st 3 years of a new vehicle. It is possible that you have a comprehensive insurance for the first year of insurance and for the next year, you choose a Zero depreciation policy.

No Claim Bonus:

If you don’t claim throughout the year that you have had your vehicle insured, then the following No Claim Bonus slabs apply on the OD component of the premium. The Third Party premium stays as is according to other factors. It is possible that after 5 continuous years of No claim, the Insurance company might request you to take a third party insurance. This is not done for the benefit of the company, but that of the vehicle owner

Number of consecutive years without claim% No claim Bonus









5 and greater


Transfer of No Claim Bonus

In case you plan to change your insurer, i.e. the company issuing the insurance, you   can still claim no-claim bonus. For this the new insurance provider should take a letter from the previous insurance provider stating that there have been no claims made by you on the said vehicle in the past n years. In case you wish to sell your current vehicle and have a substantial no claim bonus accrued on it, you can carry it forward to the next vehicle by writing a letter to the insurance company. However, the no claim bonus can be carried forward only if the next vehicle you purchase is insured within 6 months of selling your existing vehicle. No claim bonus will not exceed 50% under any circumstances. You cant transfer no claim bonus from your existing motorbike to a car or vice-versa. Also, no claim bonus stays with the seller of the vehicle, not the buyer.

Provision for Cashless Insurance

In case you have a Comprehensive insurance or Zero Depreciation policy, accident claims are settled through cashless or Reimbursement mode. The settlement mode depends on your insurance company and its tie-ups with the service centres.

provision for cashles insurance

For cashless settlement, standard rules of settlement apply. You have to pay the difference between the amount at which the claim has been settled and the repair cost rather than paying the whole repair cost upfront and then claiming reimbursement. Cashless facility can only be availed in case the damaged vehicle is repaired at centres listed by the company.

Cashless reimbursement is extremely important if you ride an expensive (to repair) motorcycle.

You don’t need to pay huge amount and wait for the claim to get settled.

What is not covered by your bike’s insurance policy:

Insurance claim will be rejected if any of the following happens:

  1. Driver being under intoxication,
  2. Vehicle being driven by a person not holding an effective valid license,
  3. Damage to tyres (unless the vehicle is damaged at the same time),

Wear and tear and mechanical breakdown damages are not covered by insurance. Policy provides cover only in case of an accident.

Documents required for making Insurance claim:

You will require following documents for making a claim-

  1. Copy of claim intimation given to insurer with xerox copy of policy and premium receipt
  2. Duly filled Claim Form
  3. Driving License
  4. Registration Certificate of Vehicle
  5. Estimate of repairs from repairer
  6. Bills and Cash Memo of repairs, and stamped receipt – in case you do not have cashless facility
  7. Police Panchanama/FIR – in case of a serious accident.

What others don’t want you to know?

One can negotiate the premium amount even after keeping the IDV constant. If you go to an insurance office yourself, you would be offered a discount (which actually is agent commission). Also if you are buying insurance from your vehicle seller, please keep in mind that he is earning around 20-30% of the premium as his commission. Please feel free to negotiate with him for first year premium.

Things to check in every Insurance Policy:

After getting policy in hand, check that the model number, engine number, chassis number and registration numbers are correctly mentioned on the policy. In case of any mismatch, insurance company will delay / deny the claim.

Check that the IDV value mentioned is correct. In many cases, insurance agents reduce the IDV (without asking you) to offer you lower premium amount. This would result in getting less amount in case of an accident.

Let's have a look at few of the products we offer:


Riding Jacket
Riding Pants
Racing Suits