How Two-Wheeler Insurance Premium Is Calculated: cc Slabs, OD and TP

Key takeaways

Premium = own-damage (on IDV) + third-party (fixed by cc or kW) + PA cover + add-ons, plus 18% GST.
For most commuter two-wheelers, the third-party premium is the biggest single part.
NCB reduces only the own-damage part.
New two-wheelers carry a five-year third-party premium paid upfront.

Two-wheeler premiums look small, but they follow the same structure as car premiums. Once you know the parts, you can check any quote in a couple of minutes.

1. Third-party premium

Fixed by the Government in consultation with IRDAI and the same at every insurer. It depends on engine capacity, or on motor power for electric two-wheelers.

Vehicle	Annual TP premium
Two-wheeler up to 75cc	₹538
Two-wheeler 76–150cc	₹714
Two-wheeler 151–350cc	₹1,366
Two-wheeler above 350cc	₹2,804
Electric two-wheeler up to 3 kW	₹457
Electric two-wheeler 3–7 kW	₹607
Electric two-wheeler 7–16 kW	₹1,161
Electric two-wheeler above 16 kW	₹2,383

Base rates under the Motor Vehicles (Third Party Insurance Base Premium and Liability) Rules, 2022, before 18% GST. Rates are notified by the Government in consultation with IRDAI and can change.

Five-year third-party premium for new two-wheelers

Engine / motor	5-year single premium
Up to 75cc	₹2,901
76–150cc	₹3,851
151–350cc	₹7,365
Above 350cc	₹15,117
Electric up to 3 kW	₹2,466
Electric 3–7 kW	₹3,273
Electric 7–16 kW	₹6,260
Electric above 16 kW	₹12,849

2. Own-damage premium

Own-damage (OD) is a percentage of IDV that rises slightly with cc and age and is higher in Zone A metros. The India Motor Tariff reference rates for two-wheelers are about 1.68%–2.02% of IDV; insurers now set their own OD rates and online prices are usually well below the reference. From the OD figure, the insurer deducts any voluntary deductible discount and then your No Claim Bonus.

3. PA cover

Personal accident cover of ₹15 lakh for the owner-driver is compulsory unless you already hold equivalent cover. Its price varies by insurer.

4. Add-ons

Zero depreciation, Return to Invoice, engine protection, consumables and roadside assistance are the common two-wheeler add-ons. Each has its own price on the quote.

5. GST

18% on the total. The September 2025 GST changes exempted individual life and health insurance, not motor insurance.

Three worked examples

All use a 50% insurer discount on the reference OD rate, ₹330 PA cover and no add-ons, calculated with our bike premium estimator.

	125cc scooter	350cc motorcycle	Electric scooter (≤3 kW)
IDV	₹65,000	₹1,78,500	₹78,000
Zone / NCB	B / 20%	A / 0%	B / 35%
Own-damage after NCB	₹436	₹1,600	₹425
Third-party	₹714	₹1,366	₹457
PA cover	₹330	₹330	₹330
GST 18%	₹266	₹593	₹218
Total	₹1,746	₹3,890	₹1,430

Notice how, for the scooter, third-party is bigger than own-damage. That’s why a small IDV cut barely changes a two-wheeler premium.

How to lower your bike premium sensibly

Protect your NCB — it can take up to half off the OD part.
Compare insurers on own-damage price; third-party is the same everywhere.
Drop add-ons you would never claim on, but keep a fair IDV.
Consider a small voluntary deductible only if you rarely claim.

FAQs

Why does a 160cc bike cost more to insure than a 150cc one?

It crosses into the 151–350cc third-party slab, where the annual TP premium is ₹1,366 instead of ₹714.

Do electric scooters cost less to insure?

Their third-party premium is lower for the same class, and own-damage depends on IDV. The total is often lower, but compare quotes because own-damage pricing varies.

Is PA cover needed if I have term or accident insurance?

You can opt out if you already have personal accident cover of at least ₹15 lakh. You may be asked to declare it.

Sources

Motor Vehicles (Third Party Insurance Base Premium and Liability) Rules, 2022 — annual and long-term two-wheeler rates.
India Motor Tariff reference own-damage rates; GST on insurance services after 22 September 2025.