No. Bike insurance renewal will not usually get costlier just because you have a five year old bike. In fact, in the majority of cases, your own-damage premium, i.e., the part that covers your bike, actually decreases. It is computed based on the current market value of your bike (that is, the Insured Declared Value), a figure you can expect to see steadily dropping as the bike gets older. On the other hand, the third-party component, which all vehicles are required to have by law, is fixed by the government (IRDAI), and only goes up when the regulator changes rates, not because your machine is now five.
This article provides a breakdown of the different elements to help you understand exactly what is driving your renewal price.
Does own-damage bike insurance cover usually get cheaper?
Own-damage premium is a percentage of your bike's Insured Declared Value (IDV), which is the current market value after depreciation. Your OD premium decreases each year as your IDV decreases.
The IDV depreciation schedule is standard, with the bike getting older, the depreciation becomes higher, and thus the IDV comes down.
| Age of bike | Depreciation applied to IDV | |
|---|---|---|
| Not exceeding 6 months | 5% | |
| 6 months to 1 year | 15% | |
| 1 to 2 years | 20% | |
| 2 to 3 years | 30% | |
| 3 to 4 years | 40% | |
| 4 to 5 years | 50% | |
| Over 5 years | Mutually agreed between you and the insurer |
In the 5th year or later, an agreed IDV with no fixed depreciation slabs will be the basis of coverage by the insurer. It decreases based on the state and market value of the bike. OD premium will be cheaper as a result of a lower IDV, so generally, you only see a reduction in that category of your premium.
What can still increase your bike insurance renewal cost?
Even if the basic OD premium shows a decline, there are certain reasons why your total payment at renewal may still increase, regardless of the age of your bike.
| Factor | Effect on premium |
|---|---|
| IRDAI revising third-party rates | Raises the fixed TP portion for everyone in that engine category |
| Making a claim | Resets your no-claim bonus to zero, removing a discount of up to 50% |
| Adding riders (zero depreciation, roadside assistance, engine protection) | Increases premium in exchange for wider cover |
| Choosing a higher IDV | Higher declared value means a higher OD premium |
| Letting the policy lapse | You can lose accumulated no-claim bonus and may need a fresh inspection |
| GST on the premium | Applied on top of the base premium at renewal |
They are not triggered by the bike simply crossing five years. They are either changes to your circumstances or external interest rate changes, and most apply at any age.
Watch the no-claim bonus
Losing your No Claim Bonus (NCB) is probably the main reason your premium will go up at bike insurance renewal. Your no-claim discount is given for having a claim-free record, and it starts at 20% after the first year and goes up to 50% a discount after five consecutive claim-free years. It is only applicable for the damages you did to your own bike, though. A single accident will wipe out your NCB and reset it to zero. Keeping a no-claim bonus has been a major factor in determining your renewal cost, even more than a bike's age.
Should you keep the no claim bonus on your bike insurance after 5 years?
Yes. The claim-free bonus/NCB is a discount, which reduces the premium for own-damage in case you don't make any claim in a year. After five consecutive years of claim-free, one gets a maximum discount of 50%, which remains if one continues the sixth year without claiming. In such a case, the discount gets applied on the even lower OD premium based on the IDV.
| Claim-free years | NCB discount on OD premium |
|---|---|
| After 1 year | 20% |
| After 2 years | 25% |
| After 3 years | 35% |
| After 4 years | 45% |
| After 5 years and beyond | 50% |
This is why a well-maintained bike with an unbroken claim-free record frequently renews cheaper at year six than a newer bike whose owner has made a claim.
Should you still buy comprehensive bike insurance cover on an older bike?
That depends on your bike's value and how much you rely on it. As the IDV falls, the own-damage payout you can receive also falls, so at some point the OD premium may feel high relative to the small claim you could get back. Two clear paths exist:
| Option | What you pay for | Best suited when |
|---|---|---|
| Comprehensive (TP + OD) | Both liability and damage to your own bike | The bike still has meaningful value or you use it daily |
| Third-party only | Only the legally mandatory liability cover | The IDV has fallen very low and OD payout would be minimal |
It is law that third-party cover must remain a part of your policy no matter what the age of the bike is, so that will never be a point of negotiation. It is one way to save money on an older low-value bike that you could only afford to drop the OD portion.
Key takeaways
A premium increase is not an automatic consequence of renewing a bike insurance policy every 5 years.
The policy has 2 component pricing elements: one is the third-party insurance cover (which has a fixed premium set by IRDAI) and the other is the owned damage insurance cover (for which a rider can expect to have to pay the premium for based on the fair value assessment of their bike).
OD premium tends to decrease over time because the actual value of the bike decreases as it gets older, hence, the depreciation is a natural factor.
Standard depreciation runs up to 50% at 4 to 5 years; beyond 5 years the IDV is mutually agreed with the insurer and continues to fall.
No-claim bonus, after five years of no claims, reaches the maximum of 50% and even thereafter, it will keep reducing your own damage premium.
The price rise of your renewal is still caused by the revision in rates from IRDAI, or the making of a claim (a new NCB has to be started), or the inclusion of riders, or the choice of a higher IDV, or simply let the bike policy lapse.
Third-party coverage continues to be mandatorily required by law for the bikes of every age, it is only for the optional damage part of your cover that one option is to discontinue.
Frequently asked questions
In India, third-party liability insurance is a legal requirement for any bike registered, regardless of its age. Even if you want a cheap bike and it's more than 5 years old, this bike is not eligible for dropping third-party liability insurance. Only the optional own damage cover can be dropped.
The reasons usually are that the IRDAI has changed third-party rates, claiming that you did an accident, which made your no-claim bonus reset, putting on more riders, or choosing a higher IDV. Just the bikes' age cannot raise the base own-damage premium.
Depreciation does not follow a fixed slab beyond 5 years. The Insured's Declared Value (IDV) is the amount agreed between you and the insurer, based on the bike's condition and market value. It normally decreases gradually.
No. The no-claim bonus is related to your claim-free record and not the bike's age. It can go up to 50% at the end of the fifth claim-free year, and you can keep that maximum discount level as long as you don't make a claim.
Yes. You can renew your policy for only third-party cover to cut down on the cost which is commonly done on low-cost older bikes. So in doing that, you won't get the cover for the damage to your own bike but you will still be within the law.
About the authors
Nikhila PS
Written by · Senior Content EditorNikhila is a content creator with 6+ years in EdTech and motor insurance, turning complex policies into clear, engaging content. She enjoys exploring digital trends, social media, and art while planning her next short escape.
Rekhit Singh Kaushal
Reviewed by · Senior Director - Motor UnderwritingRekhit Singh Kaushal is Senior Director at ACKO, a leading digital motor insurance provider in India. With deep expertise in insurance strategy and innovation, he brings trusted insights on car and bike insurance to help drivers stay protected.
