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Ins and outs of financially protecting your bike

Team AckoJan 17, 2024

A two-wheeler is a “depreciating asset”, which means that the market value of your bike will keep on reducing due to wear and tear with time. Not only that, but you need to spare money for periodic maintenance as well. But the major concerns for bike owners are related to bike damage, be it from accidents or calamities, theft, or compensation for the third party. These things can affect you (a bike owner) financially if you are not prepared in advance. Let us help by explaining the ins and outs of financially protecting your bike.

In this article, you will learn,

  1. Various ways to create a financial backup against bike-related events.

  2. What will happen if you are not financially prepared.




3 ways of financially protecting your bike

Following are some tools for you to prepare for future expenses related to the bike. Let’s also understand how feasible these options are.

1. Saving money

Saving a part of your income can come in handy if you face an unpredictable incident involving the bike. Here are some investment tools you can use to save bike-related contingencies.

  • Fixed deposits

  • Recurring deposits

  • Public Provident Fund (PPF)

  • Mutual funds

  • Stock market

Please note that the amount of money you are saving must be readily available for spending. In case of even a temporary lock on the money, using your savings may not be a feasible option. 

So out of the list mentioned above, you may eliminate fixed deposits, recurring deposits and PPF, as you will end up losing some amount if you make premature withdrawals. From the remaining two options, you can withdraw from mutual funds only if there is no lock-in on the funds (i.e. liquid funds). But these may take around a week to liquidate. 

Investment in stock markets is risky and only those who are well-versed with market conditions can take this risk. Else, you will end up losing the capital instead of making profits.

2. Borrowing a loan

Borrowing a personal loan from a bank can be an option to cover bike-related expenses. But you will pay more money than you borrow as the interest rates on such loans are usually higher. And so is the repayment tenure.

For example

Consider your superbike got damaged in an accident and you need, say Rs. 25,000 for repairs. You contacted your bank’s relationship manager and enquired about personal loans. He informs that you are eligible to get an instant loan of Rs. 1 lakh.

After deducting the processing charges, you receive Rs. 98,000 in your account. The interest rate on the loan is 19% so your repayment charge will be around Rs. 1.19 lakhs which you must pay within 12 months. 

Considering the loan and the repayment amount, the money you need for bike repairs is much lower. 

Borrowing a loan for covering bike-related expenses does not seem like a feasible option. Let’s explore the next section and find if bike insurance is a safe option for this purpose.

3. Opting for bike insurance

By now you must be wondering how bike insurance will help in repairs as the mandatory insurance does not even offer this coverage. The answer is simple. Opt for Comprehensive Bike Insurance. Here is how it works.

There are two types of bike insurance policies — Third-party (mandatory) and Comprehensive (recommended). The coverage you get depends upon the type of policy you select. 

Under a Third-party policy, you only get coverage against third-party liabilities. For example, third-party property damage, death, injury, etc. Here any damage to your bike is not covered. On the other hand, a Comprehensive policy is exhaustive. It not only provides the mandatory Third-party Bike Insurance but also Own Damage (damage to your bike) coverage. 

Here are the detailed coverages of a Comprehensive policy. 

  • Theft cover

  • Damage from accidents

  • Damage due to natural or man-made calamities

  • Fire damage

  • Coverage for third-party liabilities 

  • Various options to customise the coverage

What makes bike insurance the most feasible option?

If we compare various ways of financially protecting your bike, buying bike insurance is the most feasible one. Why? Here are some reasons.

  • Buying bike insurance is mandatory in India.

  • The premium you pay is much less than the claim amount in most cases.

  • Bike insurance works on the principle of “Indemnity”. This means, your bike insurance company will pay for the financial loss that you suffer. Consequently, you don’t have to repay the claim amount or pay additional interest on the same.

  • You can keep the savings intact by not using the amount for bike repairs or for paying third-party compensation.

  • If you are an ACKO customer, you can receive the claim amount for minor damages within a few hours of raising a claim. Then you can send the bike for repairs instantly.  

This was a small list of reasons why opting for a Comprehensive insurance policy is the most feasible option when it comes to protecting your bike financially.

What happens when you don’t have financial back-up?

In the previous section we understood how to financially protect your bike with insurance. Now let’s see what happens if you don’t have a financial back-up for the bike.

There are two types of bike insurance policies, Third-party and Comprehensive. Here is what will happen if you don’t have any of these types of policies.

Implications of not having Third-party bike insurance

  1. You are not allowed to ride a bike legally in India.

  2. If you do, you must pay fines.

  3. If you miss paying fines, you could face court trials.

  4. You must bear the cost of compensating a third-party for their loss. The compensation amount must be sufficient to cover the losses. The amount is decided by the Motor Accident Claims Tribunal. You must agree to their verdict.

  5. The compensation amount can be in lakhs in case you have caused the death of a high-income person, caused permanent disabilities, or caused damage to expensive vehicles/property.

Implications of not having Comprehensive bike insurance

  • All the implications of not having the Third-party bike insurance policy.

  • You must bear all expenses related to the damage to your bike.

  • No discounts like No Claim Bonus, no option for customising the plan.

  • You must borrow a loan or compromise on the saved amount to get your bike repaired.


Out of the various ways of financially protecting your bike, bike insurance seems like the most feasible option. It fulfills the dual purpose of complying with the law and getting holistic financial protection with Comprehensive policy. 

Buying a good bike insurance plan is a small investment of time and money that can save you from burning a hole in the pocket in case of bike damage or third-party liabilities. 

Frequently asked questions

Here are some questions related to financially protecting your bike from damages and third-party expenses. In case of more queries, you can get in touch with us by sending an email at [email protected].

What is the validity of a bike insurance policy?


The government mandates owners of new bikes to buy at least a 5-year Third-party policy. Along with that, the owner can choose to either opt for a short-term or long-term Own Damage policy. After the completion of 5-years, bike owners can buy short-term policies.

Is it okay if I skip bike insurance renewals?


No, renewing at least Third-party bike insurance is mandatory. You must not wait for a long time to renew the policy else, there could be multiple implications of not having a valid policy.

Can I save tax on bike insurance?


No, currently there are no provisions for tax savings on bike insurance.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions. Explore More:


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