Insuring a bike you are buying new

A new bike needs a Third-Party cover, which the law makes compulsory and which is issued for 5 years in one go on a two-wheeler bought new, and an Own Damage cover for the bike itself, which nobody makes you buy. New bike insurance is the 2 of them taken together. When both are on the same policy, the result is called comprehensive cover.

The Third-Party half is decided for you before you see the quote. The Motor Vehicles Act, 1988 requires it, a two-wheeler cannot be registered without it, and since September 2018 a bike bought new is issued 5 years of it at once rather than a year at a time. You cannot shorten it, skip it or shop it away.

The Own Damage half is the real decision on a new bike, and it is where most of your money goes. Third-Party cover pays the person you hit. It pays nothing towards your own bike, lying on the road with a cracked panel and a bent brake lever. A bike bought last week is still worth close to its full price, and every part on it costs full price to replace. So a fall in the first year is the most expensive fall the two-wheeler will have.

What the policy is made of, and who each part is for

• Third-Party cover pays other people. Injury to a person carries no upper limit set by the policy, and damage to somebody else's property is paid up to ₹1 lakh. That property limit is where the two-wheeler rules differ from the car rules, where the figure is ₹7.5 lakhs. It is compulsory, it is priced by the Insurance Regulatory and Development Authority of India (IRDAI) rather than by the insurer, and on a new bike it is issued for 5 years.
• Own Damage cover pays for your bike. It pays for accident damage, theft, fire, flood and storm. It is optional in law, it is priced by the insurer, and on a new two-wheeler it is issued for 1 year at a time.
• Personal Accident cover pays the owner-rider. It pays ₹15 lakhs if the rider who owns the bike is killed or permanently disabled. It is compulsory on every policy unless you already hold the same cover through another vehicle you own.

The compulsory half of a new bike policy runs for 5 years. The half that pays for your own bike runs for 1 year and has to be renewed 4 times before the first half even expires.

Why this page is organised around the purchase

Most of the questions people ask about new bike insurance are not really questions about cover. They are questions about timing and paperwork: whether the policy comes before the registration, whether the dealer has already bought it for you, what to do when the registration certificate has not arrived, and what happens in year 6. So this page runs in the order the purchase itself runs, from the on-road price the dealer quotes you to the day the 5-year cover ends.

The second row is the one that catches people out. A 5-year term on the quote almost never means 5 years of cover for your own two-wheeler.

A two-wheeler bought new is issued a Third-Party cover that runs for 5 years from the date of registration, in one policy, paid for once. A car bought new is issued 3 years. The rule came from a Supreme Court direction that took effect on 1 September 2018, and the reason bikes were given the longer term is that two-wheelers were the vehicles most often found riding around uninsured after the first year.

This is the single most misread thing about insuring a new bike. People hear 5 years and assume the whole policy is paid up until 2031. It is not. Only the compulsory half is. The half that would pay for your own two-wheeler runs for 1 year and lapses on its anniversary like any other annual policy, quietly, while the 5-year cover underneath carries on and keeps you legal.

The Third-Party column is fixed by regulation and is the same at every insurer. Everything else on the table is renewed each year and can be moved to a different insurer at any renewal.

What the 5 years actually buy you

The 5 years buy you 3 things. None of them protects your own two-wheeler.

• You cannot ride uninsured by accident. The commonest reason a bike ends up without cover is that the owner forgot the renewal date. For 5 years the legal half cannot lapse on you.
• The price of the legal half is locked. The regulator revises Third-Party rates from time to time, and they usually rise. Paying for 5 years up front fixes the rate on the day you buy. That is why the 5-year figure looks large on the invoice but small for each year it covers.
• One less thing to remember at renewal. Until year 6, each renewal is only about your own bike: its Insured Declared Value (IDV), your No Claim Bonus (NCB) and your optional covers.

Riding without the own-damage half is legal, and it is not the same as being covered. A two-wheeler with only the 5-year Third-Party cover in force is perfectly lawful. It is also a bike where a fall on a wet ring road, a garage fire or a theft from outside your building is entirely your bill.

Insurance comes before registration, not after it, because a two-wheeler cannot be registered without a policy already in force. Almost every dealership arranges that policy for you and prices it into the on-road figure. You are allowed to decline it and bring your own, and if you only notice after the money has gone, you can still move the own-damage half to another insurer. Any refund for the unused months depends on the insurer's cancellation terms and on whether a claim has been made.

The dealer has already included insurance and you want a different insurer

This is the commonest situation on a new bike, and it has a clean answer. Before you pay, say you will arrange the cover yourself and ask for the insurance line to be taken out of the on-road price. Bring the policy document to the dealership before the registration file is submitted, because the two-wheeler cannot be registered without one. Most dealerships will do this without a fuss. Some will tell you it is not possible. It is possible, and no rule requires you to buy insurance from the seller of the bike.

If the policy has already been issued and paid for, you still have 2 routes, and the one you choose depends on how much of the year is left.

Any refund on the own-damage half follows the insurer's cancellation terms. Kiwi Insurance's terms are: [Kiwi Insurance cancellation and refund terms]. Moving insurer does not affect the No Claim Bonus (NCB) you are building, because the bonus is earned by completing a year rather than by staying with one insurer.

How to buy new bike insurance yourself, step by step

Buying the policy yourself is simple, and you can do it before you go to collect the bike. These are the 5 steps in order.

Documents you need to buy and renew new bike insurance

• To buy: the dealer invoice. It shows the make, model, variant and ex-showroom price, and it carries the engine number and chassis number the policy is written against.
• To buy: proof of identity and address. For example an Aadhaar card, a Permanent Account Number (PAN) card, a passport or a driving licence. The name on it must match the name on the invoice.
• To buy on a loan: the lender's details. You need the lender's name and branch, so the loan can be recorded on the policy.
• Later: the registration certificate (RC). When it arrives, send a copy to the insurer so the permanent number can be added to the policy.
• To renew: your current policy document. The policy number is usually enough. If you are moving to a new insurer, your previous policy document is the proof of your No Claim Bonus (NCB).
• To renew after a lapse: photographs of the bike. If the own-damage half has run out, the insurer will usually ask for photographs or an inspection before it covers the two-wheeler again.

Is the bike covered while it is being brought from the dealership?

A new bike is covered on the ride home from the dealership as long as the policy has already started. Cover runs from the date and time printed on the policy document, so the thing to check is that the start time is before the delivery time rather than at midnight that night. Ask the dealership to show you the policy, not a receipt for it, before you take the keys. If the two-wheeler is being sent to another city by truck or by rail, the same rule applies. Once the policy has started, a Comprehensive Plan covers damage while the bike is being carried by road or rail. A policy that has not started yet covers nothing, and until it starts the dealer or the transporter carries the risk. So check the start date and time on the policy before the bike is loaded.

There is no buffer, and riding without cover is not a small thing. A first offence for riding an uninsured two-wheeler carries a fine of ₹2,000 and up to 3 months imprisonment under the Motor Vehicles Act, 1988. A repeat offence carries ₹4,000, and the Act sets no higher figure, so a third offence and every one after it stays at ₹4,000. The bigger risk is the one nobody quotes: without a policy in force, everything you owe the person you hit comes out of your own money.

What a loan provider will ask for

A lender financing a two-wheeler will require comprehensive cover, not just the compulsory half, for as long as the loan runs. It will want its own name recorded on the policy as the party with a claim on the two-wheeler, and it will usually want to see the renewal each year. This is not the lender being difficult. If the bike is stolen in month 8, the loan does not disappear, and the only money that can clear it is the insurance payout.

2 things follow from that. If you are financing the purchase, the own-damage half stops being optional in practice. And when the loan is closed, ask the lender for a no-objection letter and have the note removed from both the registration certificate (RC) and the policy, or you will hit it again the day you sell the two-wheeler.

Can you insure a new bike in somebody else's name?

You cannot insure a new bike in somebody else's name, and it helps to understand why rather than look for a way round it. Insurance pays the person who stands to lose money if the bike is damaged, and that is the registered owner. A policy in your name on a bike registered to somebody else is a policy the insurer can decline to pay on, because you are not the person who suffered the loss. If you are buying the two-wheeler as a gift, register it in their name and insure it in their name. You can still pay for both.

The name on the policy, the name on the invoice and the name that will go on the registration certificate have to be the same person. Nearly every first-year claim that gets stuck is stuck on this.

The Insured Declared Value (IDV) on a new bike is built from the manufacturer's listed ex-showroom price of that model, less 5% for a two-wheeler under 6 months old. It is not a free number you can pick, and it is not the on-road price you paid. Most insurers will let you move it by roughly 10% either way, and moving it up raises your premium, because the own-damage premium is a percentage of it.

2 things about this surprise most buyers. First, the road tax, the registration fee, the dealer handling charge and the insurance itself are all in the on-road price and none of them are in the Insured Declared Value (IDV). Second, a brand new two-wheeler is already valued at 95% of its listed price on the day you take delivery, because the 5% step applies from the moment the bike is invoiced.

Accessories not included in the listed price are valued separately and depreciated on the same 5% step in the first 6 months. The depreciation steps for setting the Insured Declared Value (IDV) are the regulated schedule and are the same at every insurer.

Should you push the Insured Declared Value up or down?

Whether to push the Insured Declared Value (IDV) up or down is a small trade. Push it down and you save a little on the premium, but you are paid less if the two-wheeler is stolen in month 4. Push it up and you pay a little more every year for a payout you may never see. On a bike in its first year the honest answer is to leave it alone. The invoice-based figure is close to what the two-wheeler is genuinely worth, and the amount at stake either way is a few hundred rupees of premium against several thousand rupees of payout.

The Insured Declared Value (IDV) matters more than any other number on a new bike policy for one reason: a total loss is declared when the cost of repairing the two-wheeler comes to more than 75% of it. On a scooter valued at ₹77,900, a repair estimate above roughly ₹58,400 means you are paid the value of the two-wheeler instead of having it repaired. Bikes reach that line far more easily than cars do, because a fall that bends the frame can end the two-wheeler without looking dramatic at all.

Ask what the Insured Declared Value drops to in year 2. The regulated step is 15% at the end of the first year and 20% at the end of the second. A bike insured at ₹77,900 today is insured at roughly ₹66,200 at the first renewal, and that is the number a Return to Invoice cover exists to bridge.

You cannot buy a long-term Comprehensive Plan on a new bike today. On a two-wheeler bought new, the own-damage half is sold for 1 year at a time. Long-term own-damage cover was sold on new vehicles until 1 August 2020, when the Insurance Regulatory and Development Authority of India (IRDAI) withdrew it. So the long term applies to the compulsory half only: 5 years of Third-Party cover, with an annual own-damage cover renewed beside it.

The reason the regulator pulled it is worth knowing, because it is the same reason the annual renewal is better for you. A 3-year or 5-year own-damage cover locked the Insured Declared Value (IDV) and the premium at the start, so the customer carried on paying a new-bike premium on a 4-year-old two-wheeler, and could not take the No Claim Bonus (NCB) anywhere else without unwinding the whole policy.

Put the own-damage renewal date in your phone on the day you buy the bike. It is the one date the 5-year cover will not remind you about.

What if you only want the compulsory cover on a new bike?

You can take only the compulsory cover on a new bike, and many riders do. It is a reasonable choice on a bike worth ₹60,000 that is parked in a locked compound and ridden 4 kilometres a day. It is a poor one on a bike still being paid for, or one parked on a road at night, or one being ridden to work in traffic every morning by somebody who has been riding for 6 months. The question to ask is not what the premium costs. It is what you would do if the bike were gone tomorrow and the loan were not.

Almost every buyer of a new two-wheeler should take comprehensive cover in year 1, because in year 1 the bike is at its full value, so a theft or a total loss costs you more than in any later year. The riders who can sensibly take the legal minimum are the ones buying a cheap second bike they could replace out of pocket without it changing their month.

Riders who can reasonably take the legal minimum

• The buyer of a cheap second scooter. A small commuter scooter bought outright as a spare, kept in a locked garage and ridden a few times a month, is exposed to very little. A second scooter is the clearest case of this. The 5-year Third-Party cover it is issued with keeps it legal
• The buyer who will replace it anyway. If losing the two-wheeler would mean buying another one next week without thinking about it, the own-damage half is insuring a loss you have already decided you can carry
• Nobody in year 1 with a loan outstanding. This is the one case where the choice is not yours to make, because the lender's requirement stands for as long as the loan does

The question that decides it at the dealership. If the new bike were stolen the week after delivery, would you replace it out of savings without changing anything else about your month? If the answer is no, take comprehensive cover on day 1 rather than at the first renewal, because a theft or a bad fall costs you the most in year 1, while the bike is still close to its full price.

A new 110cc scooter, such as a Honda Activa or a TVS Jupiter, costs around ₹6,550 to insure in its first year with comprehensive cover. Roughly ₹4,550 of that is the 5-year Third-Party cover, paid once up front. A 125cc two-wheeler, such as a Honda Shine commuter bike or a Suzuki Access 125 scooter, comes to about ₹6,800. A 350cc bike, such as a Royal Enfield Classic 350 or a Royal Enfield Hunter 350, comes to about ₹12,650. From year 2 the yearly cost drops sharply, because the Third-Party cover is already paid for.

Every insurer charges the same Third-Party price for the same engine size, because the regulator sets it. The 5-year price is a little more than 5 single years at today's rate. What you get for it is a price that cannot rise for 5 years, and a legal cover that cannot lapse.

The regulator can change these rates, so check the latest notice before you rely on a figure. Goods and Services Tax (GST) of 18% is added to every price in the table.

What a new 110cc scooter costs, line by line

This is the cheapest of the 3 petrol examples in this section, and the most common new two-wheeler sold in India. The bike is listed at ₹82,000 ex-showroom, giving an Insured Declared Value (IDV) of ₹77,900, and it is registered in a metro city.

The same bike renews at roughly ₹1,840 in year 2, including Goods and Services Tax (GST), because only the own-damage half and the Personal Accident cover are bought again. That figure is before any No Claim Bonus (NCB), which lowers the own-damage part further if the year passed without a claim.

Figures are for a two-wheeler registered in a metro city, with no optional covers added. Year 2 figures assume the value falls by 15% and are shown before any No Claim Bonus (NCB). Your own price moves with the city the two-wheeler is registered in, the model, and the optional covers you choose.

Why a deductible is applied at all

Every own-damage claim on a two-wheeler carries a fixed ₹100 that you pay yourself, whatever the engine size and whatever the repair costs. People read that as the insurer keeping back a little of their money. That is not really what it is for.

A bike claim is cheap to make and expensive to process. Somebody has to look at the damage, list the parts, approve the bill and pay the garage, and that work costs roughly the same whether the repair is ₹400 or ₹40,000. If there were no deductible, a ₹300 claim for a scratched mirror would cost the insurer more to handle than to pay, and that cost goes straight back into everybody's premium the following year. The deductible is the line that keeps the smallest claims out, so the price of the cover stays low for the people who need it for the large ones.

It does 1 more thing, and on a new bike this is the useful part. It makes you stop and work out whether a claim is worth making, because a claim also costs you your No Claim Bonus (NCB) at the next renewal. On a small repair it can be worth comparing the two before you claim.

You can agree a larger deductible and pay less. Choosing to carry the first ₹500 or ₹1,000 of every claim yourself brings the own-damage premium down. It suits a confident rider with a bike parked securely, and it suits nobody who would find ₹1,000 hard to find on the day.

Electric two-wheelers have their own Third-Party rate scale, set by motor power, and it is lower than the petrol scale. The band is set by the rated power printed on the registration certificate (RC), so check it there rather than going by the model name or the peak power in a brochure. Goods and Services Tax (GST) of 18% is added on top.

The battery is most of what you are insuring

On a petrol commuter bike the single most expensive part is the engine, and it stays in the bike for its whole life. On an electric scooter the most expensive part is the battery pack, it is often 35% to 45% of what the whole bike cost, and it is the part most likely to be damaged by something the rider did not see coming, such as standing water at an underpass.

That changes 4 things about the cover, and all 4 are worth setting straight before you sign.

The premium picture on a new electric two-wheeler is therefore split. The compulsory half is cheaper than on a petrol bike of the same size. The own-damage half usually costs a little more, because the parts are more expensive and fewer garages repair electric two-wheelers. On a ₹1,15,000 electric scooter with a 3kW motor, expect roughly ₹5,300 for year 1, including Goods and Services Tax (GST), of which ₹2,466 is the 5-year Third-Party cover.

A new scooter is insured under exactly the same rules as a new motorcycle: the same 5-year Third-Party cover, the same annual own-damage cover, the same Insured Declared Value (IDV) built from the invoice and the same ₹100 deductible. There is no separate scooter policy and no separate rule book for them. What changes is the shape of the claims, because a scooter is mostly plastic panels wrapped around a small engine.

Nearly every new petrol scooter sold in India is between 100cc and 125cc, from a TVS Jupiter at the smaller end to a Suzuki Access 125 at the top. That puts it in the 75cc to 150cc Third-Party band, the same band as a Honda Activa or a Honda Shine commuter bike, at ₹3,851 for the 5 years. So the compulsory half of a new scooter policy costs the same as a commuter bike's, even though the scooter is cheaper to buy. The own-damage half is where the price separates, and it is usually a little lower here because the bike is worth less.

The practical effect on a new scooter is that you will be tempted to claim early and often, because a fallen two-wheeler looks expensive and a set of panels runs to ₹3,000 or ₹4,000. On a small repair like this, it can be worth comparing the repair bill with the No Claim Bonus (NCB) you would lose at the next renewal before you decide to claim.

A scooter used by more than one person in the house is still fully covered. The policy covers the bike, not one particular rider, so your daughter riding it to college is covered as long as she holds a valid licence for that class of two-wheeler. A learner's licence counts only when the conditions attached to it are being followed.

Prices are a year's premium on a scooter or a commuter bike with an Insured Declared Value (IDV) under ₹1 lakh. There is no maximum number of optional covers one policy can carry. Every one of them attaches to the own-damage half, with one exception: Personal Accident cover, which can also be bought with Third-Party cover alone.

Dealer-fitted accessories, and getting them onto the policy

Common extras include a crash guard, a top box, a taller windscreen, alloy wheels, a seat cover and extra lamps. Most new bikes leave the showroom with at least 1 of them, and almost none of them are covered unless somebody wrote them down.

• Anything on the invoice before delivery goes in easily. Accessories billed by the dealership are valued separately, added to the Insured Declared Value (IDV) and covered from day 1. Check the policy document actually lists them and do not take the dealer's word for it.
• Anything fitted afterwards needs an endorsement. Tell the insurer, send the bill, pay the small extra premium, and the accessory is added to the policy. Until that is done it is uninsured, even though it is fitted to an insured two-wheeler.
• Electrical and non-electrical fittings are rated differently. Lights, horns and music systems are rated as electrical accessories and cost more to insure than a crash guard or a box.
• Anything that changes the bike itself is a different conversation. A louder exhaust or an engine change has to be declared. An undeclared change gives the insurer a reason to decline a claim on a two-wheeler that is not the bike it insured.

If this is your first bike, this policy is where your whole No Claim Bonus (NCB) history begins. The first policy starts at 0%, because the bonus is a reward for finishing a year without a claim and you have not finished one yet. The only exception is a bonus you bring across from a bike you have sold. The bonus appears for the first time at your first renewal, at 20%, and it grows to 25%, 35%, 45% and 50% over 5 claim-free years. It applies only to the own-damage half of the premium, never to the 5-year Third-Party cover.

Think of it the way a landlord thinks about a reference. Nobody can give you one before you have lived somewhere. The discount is the insurer saying you have now ridden a two-wheeler for a year and cost them nothing, so next year is cheaper. The first year is simply the year you earn it in.

The discount is applied to the own-damage premium before the 18% Goods and Services Tax (GST). Your renewal quote shows the discount already applied, and the own-damage premium it is applied to falls each year as the Insured Declared Value (IDV) does.

3 things to know before your first claim

• One claim takes the whole discount. On a standard two-wheeler policy the bonus goes back to zero at the next renewal, however small the claim was. So on a small repair, such as a set of scooter panels, it can be worth comparing the repair bill with the bonus you would lose before you claim.
• The bonus belongs to you, not to the bike. When you sell this two-wheeler and buy another, the bonus moves with you on a certificate from the old insurer. It does not stay with the bike for the person who buys it.
• You cannot hold it on 2 vehicles at once. If you already own an insured scooter, that bonus stays on its policy and cannot be copied across to the new bike. It can move across only when the older vehicle is sold and its policy ends.

If you go 90 days past a renewal date without renewing, the No Claim Bonus (NCB) you have built is lost entirely, whether or not you ever claimed. On a new bike this is the trap the 5-year cover sets for you, because the two-wheeler stays legal the whole time and nothing looks wrong.

To make a claim, you report the damage, an assessor looks at the two-wheeler, the insurer approves the work, the two-wheeler is repaired and the garage is paid directly. At almost every insurer today a repair at a network garage is cashless, which means you do not put the money in first and wait to be paid back. You hand over your ₹100 deductible and anything the policy does not cover, and that is the end of your part in it.

This is the part of new bike insurance that is described wrongly more often than any other. The old picture, where the owner pays the garage and claims it back weeks later, still exists, but it is now the exception rather than the rule and it only applies when you choose a garage outside the insurer's network.

Keep the delivery invoice, the temporary registration paper and the policy document together for the first few months. On a new bike they are the 3 documents a first claim asks for, and the registration certificate (RC) may not exist yet.

What the warranty pays for, and what the policy pays for

A new two-wheeler carries a manufacturer's warranty, usually for 2 to 5 years, and new riders often assume it overlaps with the insurance. It does not overlap at all. The 2 of them cover opposite things, and knowing which is which saves a wasted claim.

1 practical rule comes out of that table. While the two-wheeler is under warranty, have it repaired at the brand's authorised workshop even on an insurance claim, and check that workshop is in your insurer's network before you buy the policy. A repair done elsewhere can give the manufacturer a reason to argue about the warranty later, and you gain nothing by it.

When a claim is not clear cut

Most arguments over a new two-wheeler claim come down to one question: did something sudden happen to the two-wheeler, or did the problem build up over time? Insurance pays for the first kind. A part that wore out, or age-related damage, is the second kind and is not paid. If your claim is turned down and you think that is wrong, ask for the reason in writing, with the clause it relies on. Your first step is the insurer's grievance officer, who must reply within the time the regulator sets, currently 14 days. If you are still unhappy, register the complaint on the Insurance Regulatory and Development Authority of India (IRDAI) Bima Bharosa portal. The last step is the Insurance Ombudsman, which costs nothing to use. Its decision binds the insurer, and you can still go to court if you prefer.

There is no waiting period on a new bike policy. Cover starts at the date and time printed on the document, and a claim on day 2 is treated exactly like a claim in month 11. There is also no limit on how many own-damage claims you may make in a year, though a claim costs you the No Claim Bonus (NCB) at the next renewal. Many optional covers have their own yearly limit on claims, and Zero Depreciation cover and Engine Protect cover typically do. Kiwi Insurance allows [number] Zero Depreciation claims a year.

By year 6 the decision that mattered at the showroom comes round again in reverse. A 5-year-old commuter bike may be worth ₹35,000, and comprehensive cover on it costs a fraction of what it did when the bike was new. That is usually still worth taking, because the cost of the cover has fallen faster than the cost of replacing the two-wheeler has.

Do not let the own-damage half lapse in the meantime and plan to fix it at year 6. A gap of more than 90 days ends the No Claim Bonus (NCB) you have built, and 5 claim-free years thrown away at the last renewal is the most expensive mistake available on a new bike policy.

Kiwi PayFirst and Kiwi Insurance Flexi Repair are optional covers on Kiwi Insurance car policies at present and are not offered on two-wheeler policies, so they are not listed above. The enhanced No Claim Bonus sold on car policies is not available on a bike either. The ordinary No Claim Bonus applies in the usual way.