Today’s market offers a wide range of two-wheelers with varied designs, features, and performance, making it important for riders to choose a model that suits their lifestyle, safety needs, and usage patterns, ensuring better comfort, efficiency, and long-term satisfaction.
Investing in two-wheeler insurance stocks offers exposure to India’s growing vehicle ownership and rising insurance awareness, benefiting from higher policy adoption, regulatory support, and increasing demand for motor insurance protection.
In this blog, we will explore why choosing the right two-wheeler insurance matters and how two-wheeler insurance–linked stocks benefit from India’s growing mobility and insurance adoption.
Why Two-Wheeler Insurance is Mandatory
According to the 1988 Motor Vehicles Act you are not allowed to drive a vehicle without “Third Party Liability” insurance. This is because the cost of compensating other people is enormous if you cause an accident and injure them, or damage their property. The government wishes to ensure that no matter who causes such an accident, whoever was injured gets money for it anyway.
- First Offense: Rs.2,000 and/or imprisonment for up to 3 months.
- Second Offense: Rs.4,000 and/or imprisonment.
Top 5 Bike Insurance Companies in India
1. IFFCO Tokio Two-Wheeler Insurance
IFFCO Tokio is a popular choice, especially if you live in Tier-2 or Tier-3 cities. They are a joint venture between Indian Farmers Fertiliser Cooperative (IFFCO) and Tokio Marine Group.
- The Rural Edge: In small towns they have unique “Bima Kendras” (insurance centres). If you like face-to-face service, this is something which definitely comes in handy for you.
- Auto Crash Insurance: They have a claim settlement ratio (CSR) of around 95.8%. So in terms of paying out claims they’re reliable indeed.
2. HDFC ERGO Bike Insurance
If you are an app user and don’t like heavy paperwork then HDFC ERGO is likely the best fit. They are known for their digital-first approach.
- AI Speed: They use Artificial Intelligence (AI) for claims. For minor damages, you can just click photos on your phone, upload them, and get approval in minutes and there is no waiting for a surveyor to visit.
- The Numbers: They report a high CSR, often nearing 100% in some segments. They have a big network of 2,000+ garages specifically for two-wheelers.
- Overnight Repair: In many cities, they offer a service where they pick up your bike, repair it overnight, and drop it back.
3. Tata AIG Two-Wheeler Plans
The name “Tata” is a name of trust in India. Tata AIG combines this trust with the global expertise of AIG.
- Huge Network: Their network is one of the widest in India with more than 7,500 cashless garages. This is a major perk if you tend to road-trip often.
- Settlement ratio: Their claim settlement ratio is at a comfortable 98%, which is very good. They are also known for being clear with their terms, no hidden conditions or charges.
4. Bajaj Allianz Bike Coverage
Bajaj Allianz is a joint venture involving Bajaj Finserv. Since Bajaj is a major bike manufacturer, they understand the two-wheeler market.
- Super Fast Claims: They pioneered a feature called “Motor OTS” (On-The-Spot). For claims up to Rs.20,000 or Rs.30,000, they can approve the claim instantly via their mobile app.
- Network: They have a strong network of over 4,000 garages.
- Long-Term Focus: They were among the first to popularize long-term plans, protecting everyone from yearly price hikes.
5. SBI General Insurance Options
This Insurance is supported by the State Bank of India, here the insurer has a wide reach because of thousands of SBI branches across the country.
- Affordability: The insurance has a good competitive price as per the market and if you are looking for a budget friendly insurance option that is also reliable then this insurance should be the choice.
- Reach: It has a huge network with over 9,000 garages as per the latest official data which covers almost every corner of the country.
- Trust: Being a part of the SBI family gives them a high trust factor, especially for people who already bank with SBI.
Read Also: Best Health Insurance Plans in India
Top Two Wheeler Insurance Plans
Comprehensive Coverage Options
- Key Characteristics: It covers damage to your bike and damage you cause to others (Third-Party).
- Why buy it: If the bike is stolen, damaged in a fire, or ruined in a flood, this policy pays you and gives a complete peace of mind.
Third-Party Liability Plans
- Key Characteristics: It only pays for damages caused to other people or their property.
- Does not include: It does not include the damages of your own vehicle.
- Who is it for: This is best for very old bikes (10+ years old) where the repair cost might be more than the bike’s value.
Zero Depreciation Add-On Plans
- The Problem: Your claim is subject to “depreciation” with ordinary insurance. Is that if you have to replace a plastic part, they may cover only 50% because your bike is old and you can pay the rest.
- The Solution: A “Zero Dep” add-on forces the insurer to pay the full cost of the part, regardless of how old your bike is and it saves you thousands during a claim but costs a little extra.
Factors To Consider While Choosing a Two-Wheeler Insurance Plan
Claim Settlement Ratio (CSR)
This is the most critical number as this number tells us the percentage of claims that the company has settled. Look for a company with a CSR consistently above 90% or 95%. A high CSR means the company is not looking for excuses to reject your claim.
Network of Cashless Garages
“Cashless” means you don’t have to pay from your pocket and wait for a refund. The insurer has to pay the garage directly. Before buying, check the insurer’s list to see if your local mechanic or service center is in their network. If you live in Bangalore and the garage is in Delhi then it won’t help you.
Premium Costs and Discounts
Sometimes a policy is cheap because they have lowered the “IDV” (Insured Declared Value). IDV is the maximum money you get if your bike is stolen. We should never lower the IDV just to save RS.100 or RS.200 on the premium. It is not worth the risk.
Coverage Types: Comprehensive vs Third-Party
Always go for Comprehensive with Zero Depreciation. You might switch to a Third-Party if the bike is very old, but Comprehensive is still safer.
Add-On Benefits and Riders
They cost extra but make the policy better. Essential if you go on long rides. They will bring a mechanic or tow truck if you break down. This covers the rider for injuries or death. It is mandatory to have at least Rs.15 Lakhs coverage.
Read Also: Best Insurance Stocks in India
How to Buy the Best Bike Insurance Online
Buying online is cheaper, faster, and transparent.
- Go to an Aggregator: Websites like PolicyBazaar or Coverfox allow us to compare prices.
- Add Details: The bike’s number should be added then the system will check the details automatically.
- Customize: Add “Roadside Assistance” and “Zero Depreciation” after selecting “Comprehensive Plan” to customize.
- Verify IDV: Make sure the bike’s market value corresponds with its displayed value.
- Pay: Either use UPI or a card, you will automatically receive the policy PDF in your email instantly.
You can also sometimes save 5% on commission cost if you buy directly from the insurer’s website (like HDFC ERGO or Acko).
How to invest in Two-Wheeler Insurance Companies in India?
Investing in two-wheeler insurance companies means gaining exposure to general insurers that earn premiums from motor insurance policies. You can research, track fundamentals, and invest seamlessly through Pocketful, which simplifies stock analysis and long-term investing.
- Understand the business model: Motor insurance is a core revenue driver due to mandatory coverage norms.
- Track sector growth: Rising two-wheeler ownership and insurance awareness support demand.
- Analyze fundamentals: Focus on premium growth, claim ratios, and profitability.
- Use Pocketful: Identify opportunities, compare stocks, and invest with ease.
- Think long term: Insurance businesses benefit from compounding over time.
Read Also: Best Term Insurance Policies in India
Conclusion
The primary purpose of two-wheeler insurance is to safeguard your bike from unforeseen risks such as theft, accidents, and damage. It also provides mandatory coverage against third-party liabilities. Along with protection from fire and external losses, policyholders benefit from yearly services and flexible payment options, including digital and offline modes, making policy purchase and renewal hassle-free.
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Frequently Asked Questions (FAQs)
What is the new 120-day rule for retaining my No Claim Bonus (NCB)?
The Insurance Regulatory and Development Authority of India (IRDAI) has changed and extended the time tenure for No Claim Bonus (NCB) from 90 days to 120 days following the policy’s expiry date.
Can I insure just my bike’s damage if I buy a new one?
Yes. Since new two-wheelers mandatorily come with a 5-year Third-Party (TP) policy, you only need to purchase a Standalone Own Damage (OD) policy to cover damage repairs to the bike.
Does my policy cover me if I’m riding a friend’s bike?
No, the insurance policy is linked to the vehicle and not with the rider. If any accident occurs on a friend’s bike, your policy will not cover the damages.
What exactly is a “cashless garage”?
A cashless garage is a workshop or service center that has a direct partnership agreement with your insurance company.
Why is it a bad idea to drastically reduce my Insured Declared Value (IDV)?
Reducing the Insured Declared Value (IDV) will lower your premium though it significantly reduces the maximum amount the insurer will pay out if your bike is stolen or completely totaled.
