How Engine Size Affects Bike Insurance Premiums?

Bike insurance is a legal requirement and a vital financial safeguard for riders. Whether it's protection against accidents, theft, or third-party liabilities, having the right insurance plan ensures peace of mind on the road.

The cost of this protection-your insurance premium-is influenced by several factors. One key aspect that directly affects the premium is the bike's engine size.

So, let's explore the relationship between engine size and bike insurance premiums.

How is a Bike's Engine Size Measured?

A bike's engine size is typically measured in cubic capacity (cc), which indicates the total volume of all the engine's cylinders. This measurement reflects the engine's capacity to burn an air-fuel mixture and generate power.

Essentially, the higher the CC value, the larger the combustion chamber, which burns more fuel and, consequently, produces more power. Engine size directly determines a bike's performance characteristics, like horsepower, torque, and acceleration.

Impact of Engine Size on Bike Insurance Premiums

The engine size of a bike significantly influences the bike insurance premium you pay. Here's why:

• Higher Risk of Accidents: Insurers consider bikes with higher CC engines riskier as they can attain greater speeds, increasing the chances of accidents.
• Expensive Repairs: High-CC bikes usually have more expensive parts, which raises repair and replacement costs and increases the insurance premium.
• Increased Maintenance Costs: High-CC bikes often require more frequent and specialised maintenance, contributing to higher ownership costs-something insurers factor into premium calculations.
• Newer Models with Bigger Engines: Newer models with larger engines are typically priced higher and may include advanced features, leading to a higher premium due to a higher IDV and, consequently, larger payout in case of accidents.

Comparison of Insurance Premiums for Different Engine Sizes

In India, having a third-party bike insurance policy is compulsory for all two-wheeler owners as per the Motor Vehicles Act. The Insurance Regulatory and Development Authority of India (IRDAI) sets the premium rates for third-party insurance based on the bike's engine capacity.

The table below shows the current premium rates for different engine sizes:

These third-party premiums are fixed and consistent nationwide. However, the premium may vary if you opt for a comprehensive insurance policy. This is because it includes the Own Damage (OD) component, which considers several factors beyond just the engine size.

You can easily check the estimated premium for your two-wheeler by using an online bike insurance premium calculator tailored for different bike types.

Other Factors Affecting Bike Insurance Premium

While the engine size plays a key role in determining your bike insurance premium, especially for third-party coverage, several additional factors influence the cost of comprehensive insurance. These include:

• Year of Manufacture: Older bikes tend to have lower insured values due to depreciation, often reducing the premium.
• Location: Premiums may vary based on where you live. Bikes registered in metro cities usually attract higher premiums due to increased risk of accidents, theft, and traffic.
• Make and Model: Premium or high-performance bikes generally incur higher insurance costs. This is due to the higher repair or replacement expenses for parts in case of damage.
• Add-on Covers: Opting for extra protection like engine protection, zero depreciation cover, or roadside assistance can raise the total premium. It's best to select only those add-ons that match your usage and budget.
• Deductibles: Insurance premiums are also influenced by deductibles. Choosing a voluntary deductible lowers your premium, but you'll need to pay more out-of-pocket if a claim arises.
• No Claim Bonus (NCB): Insurers reward claim-free years with a discount on the premium during policy renewal. This can accumulate over time and reach up to 50% off the own damage component.
• Security Features: Installing anti-theft devices approved by the Automotive Research Association of India (ARAI) can reduce your premium, as these features lower the theft risk.
• Rider's Age: Insurance companies often charge higher premiums for riders under 25 due to their risk profile. Riders above 30 with a clean record typically pay less.
• Riding History: A good driving record with no previous claims or traffic offenses may result in a discounted premium. On the other hand, frequent violations or claims can increase the cost.
• Purpose and Frequency of Use: Bikes used daily for commuting, especially over longer distances, carry a higher risk of wear and accidents, leading to higher premiums. Occasional use, like weekend rides, might qualify for lower rates.

Understanding how engine size affects your bike insurance premium can help you make more informed decisions when choosing a two-wheeler. While higher engine capacity often translates to greater power and performance, it also brings higher insurance costs due to the increased risk and maintenance expenses involved.

However, engine size is just one factor that impacts your premium. Elements like your bike's age, model, location, usage pattern, and additional covers also play a role. To ensure the right balance between coverage and cost, it's advisable to compare plans and use a premium calculator before purchasing or renewing your policy.