If you are buying a new two-wheeler in India in 2026, you have already heard the phrase "five-year insurance" thrown around at the dealership. But what exactly are you paying for, and is the policy really as straightforward as it sounds? Understanding the 5 year bike insurance long term policy India rules can save you from overpaying, protect you from coverage gaps, and help you pick add-ons that actually matter.
This guide walks you through how the long-term mandate works, what the current IRDAI-regulated premium rates look like, the difference between a bundled and standalone policy, and the key questions to ask before you sign anything at the showroom.
Why Is a 5 Year Bike Insurance Long Term Policy Mandatory in India?
The mandate traces back to a Supreme Court directive and a subsequent circular from the Insurance Regulatory and Development Authority of India (IRDAI), which came into effect on 1 September 2018. Before that, millions of two-wheelers on Indian roads were uninsured — IRDAI data showed that as many as 66% of bikes were running without cover during FY 2018-19. The court and regulator responded by requiring all new two-wheelers to carry at least five years of third-party (TP) liability cover at the point of purchase.
The logic is simple: third-party insurance protects people you might injure or whose property you might damage in an accident. Without a long-term mandate, many riders simply let their annual policy lapse. A five-year upfront payment removes that risk for at least the first ownership cycle of the bike.
If you ride on a public road without valid bike insurance, you face a fine of ₹2,000 for a first offence and potential imprisonment for repeat violations under the Motor Vehicles Act.
The Three Policy Structures You Will Encounter
IRDAI has approved three ways to package a two-wheeler policy for new bikes. Understanding the difference is the single most important decision you will make at the dealership.
1. Standalone 5-Year Third-Party Policy
This is the bare minimum. It covers legal liability for injury, death, or property damage to a third party for five consecutive years. It does not cover any damage to your own bike — from accidents, theft, natural disasters, or fire. If you damage your own bike, you pay out of pocket.
2. Bundled Policy (5-Year TP + 1-Year Own Damage)
This is the most commonly sold option for new bikes. You get five years of mandatory TP cover bundled with one year of Own Damage (OD) cover. After the first year, your TP continues automatically, but you must renew the OD portion annually. Think of the OD renewal as your regular annual insurance event — you can switch insurers, adjust your Insured Declared Value (IDV), and renegotiate add-ons at every OD renewal.
3. Long-Term Comprehensive (Up to 3 Years)
Some insurers offer a combined TP + OD policy for up to three years — but not five. A full five-year comprehensive policy covering own damage is not available in India; the maximum comprehensive tenure is three years. If someone at a dealership tells you they are selling you "five-year full cover," read the policy document carefully — you are almost certainly getting a bundled product.
Current 5-Year Third-Party Premium Rates (IRDAI 2025–26)
IRDAI regulates TP premium rates, so every insurer charges exactly the same TP premium for a given engine capacity. There is no scope for comparison shopping on the TP component — the only variable is your insurer's OD pricing and claim settlement record.
The table below shows the indicative annual TP rates for existing bikes and the approximate five-year single-premium for new bikes, based on engine capacity (CC). Note that MoRTH and IRDAI are actively reviewing a proposed average increase of around 18% for FY 2026–27; these figures reflect the rates in effect for 2025–26 and should be verified at purchase.
| Engine Capacity | Annual TP Premium (existing bikes) | Approx. 5-Year Single Premium (new bikes) |
|---|---|---|
| Up to 75cc | ₹538 | ~₹2,690 |
| 75cc – 150cc | ₹714 | ~₹3,570 |
| 150cc – 350cc | ₹1,366 | ~₹6,830 |
| Above 350cc | ₹2,804 | ~₹14,020 |
Rates are base premiums before 18% GST. The five-year figures above are approximations; your actual invoice may differ slightly based on IRDAI's published long-term multiplier for the year of purchase. Always confirm with your insurer's policy schedule.
To illustrate: a Honda Activa (110cc), a Hero Splendor Plus (97cc), and a Bajaj Pulsar 150 all fall in the 75cc–150cc band, so each attracts roughly ₹714 per year in TP premium — or approximately ₹3,570 as a single five-year payment. A Royal Enfield Classic 350 sits in the 150cc–350cc band at roughly ₹1,366 per year.
Locking In Premiums: The Real Financial Advantage
The most tangible benefit of the five-year long-term policy is premium stability. IRDAI revises TP rates periodically, and two-wheeler insurance claims rose by 15% in 2024–25, with a further 10–12% rise expected in 2025–26. A proposed MoRTH-backed hike of up to 18–25% for certain vehicle categories is currently under review.
When you pay the five-year TP premium upfront, you are locked into the rate at which you bought — any subsequent hikes do not affect you until renewal. Over a five-year window, that can mean meaningful savings, especially for mid-segment bikes in the 150cc–350cc band where claim frequency is rising fastest.
For the OD component, locking in is a slightly different story. Because OD premiums depend on the IDV (which falls as the bike depreciates), a multi-year OD lock-in is not always advantageous. This is one reason the bundled (5-year TP + 1-year OD) structure works better for most riders — you keep the premium stability on TP while retaining flexibility to adjust your OD cover annually.
How No Claim Bonus (NCB) Works on a Long-Term Policy
NCB is relevant only to the Own Damage portion of your policy — not to third-party cover. Under a bundled policy, NCB works exactly as it does for an annual policy: you earn a discount of 20% on your OD premium after a claim-free year, scaling up to 50% after five consecutive claim-free years.
One important protection specific to long-term policies: if you make a claim during the policy period, your NCB does not reset to zero in the way it can under some annual policies. Instead, it steps back to the previous year's slab. This "soft reset" is a genuine benefit for riders who make occasional small claims.
A word of caution: claiming for small amounts — say, ₹2,000–₹3,000 for a minor scratch — is rarely worth it. Losing even one NCB slab can cost you more in the next renewal than the claim payout itself. Use OnePaisa's financial calculators to weigh the NCB cost before filing.
Choosing Add-Ons That Actually Work for a 5-Year Policy
Add-ons apply to the OD portion and are typically renewed annually with the OD component. The most useful ones for new bike owners in 2026 are:
- Zero Depreciation (Zero Dep): Eliminates depreciation deductions on plastic, rubber, and fibre parts during a claim. Without it, a ₹10,000 plastic panel claim could result in only a ₹5,000 payout after 50% depreciation. Zero dep typically costs ₹500–₹1,500 extra per year and is worth it for bikes under five years old.
- NCB Protection: Shields your No Claim Bonus slab even if you file one claim in a policy year. Particularly valuable once you have built up a 35–50% NCB discount.
- Roadside Assistance (RSA): Covers emergency services like towing, minor on-site repairs, and fuel delivery. Useful for long-distance commuters and touring riders.
- Engine Protection: Covers consequential damage to the engine from water ingression or lubricant leakage — a standard OD policy does not cover this. Highly recommended in flood-prone cities.
- Return to Invoice (RTI): In case of total loss or theft, pays you the original invoice price rather than the depreciated IDV. Available only in the first few years of ownership.
Most insurers cap zero-dep eligibility at bikes up to five or seven years old. Since you are buying these add-ons for the OD portion of a bundled policy, you can reassess them each year based on the bike's age and your usage patterns.
If you own a car in addition to your bike, note that car insurance follows different long-term rules — three years of mandatory TP for new cars, not five.
5-Year Policy for Used Bikes: A Different Rule
The five-year mandatory TP rule applies only to new two-wheelers sold after 1 September 2018. If you buy a second-hand bike, you are legally required to maintain a valid TP policy, but it can be renewed annually — there is no five-year obligation for used bikes. The responsibility for ensuring continuous TP cover transfers to the new owner at the point of sale.
If the used bike you are buying already has an active long-term TP policy, that policy transfers with the vehicle. Check the remaining tenure and confirm the transfer with the insurer before completing the purchase.
Frequently Asked Questions
Is 5-year bike insurance mandatory for all new two-wheelers in India?
Yes. As per IRDAI's directive backed by a Supreme Court order, all new two-wheelers sold in India on or after 1 September 2018 must be purchased with a minimum five-year third-party insurance policy. You cannot buy a standalone one-year TP policy for a brand-new bike at the dealership.
Can I cancel a 5-year bike insurance policy before it expires?
Yes, you can cancel a long-term policy, but only under specific conditions — such as if you sell the bike or if it is declared a total loss. In such cases, the insurer typically refunds the unused pro-rata premium for the TP portion after deducting applicable charges. You do not forfeit the entire premium; however, the exact refund calculation varies by insurer and policy terms.
Does a 5-year policy cover theft and own damage?
The mandatory five-year TP-only policy does not cover theft or own damage. For theft and accident coverage on your own bike, you need either the bundled policy (5-year TP + 1-year OD) or a separate standalone OD policy. Check your policy schedule carefully to confirm what is included.
Will my premium go up during the 5-year TP policy period?
No. Once you pay the five-year TP premium at the time of purchase, it is locked in for the entire tenure. Any IRDAI-mandated rate revisions during those five years do not apply to your existing policy. This is one of the strongest financial reasons to choose the long-term structure.
How is the IDV calculated under a bundled 5-year policy?
IDV (Insured Declared Value) is recalculated at each annual OD renewal based on the manufacturer's listed price minus standard IRDAI-prescribed depreciation. Depreciation is 5% in the first six months, rising to around 50% after four to five years. You have some room to negotiate IDV with your insurer within a permitted band — a higher IDV means a higher OD premium but a better payout in case of total loss or theft.
The Bottom Line: What to Do Before You Sign at the Showroom
The five-year TP component is non-negotiable — every new bike must have it, and the premium is the same regardless of which insurer you choose. Where you can make a real difference is on the OD side: compare OD premiums across insurers for the same IDV, choose add-ons based on your actual riding patterns, and never let the OD renewal lapse even after the mandatory TP period runs out.
Two things to confirm before you finalise the policy at the dealership: first, check the insurer's claim settlement ratio (CSR) — a higher CSR means fewer disputed or delayed claims. Second, make sure the policy document clearly separates the TP and OD components so you know exactly when each needs renewal.
Ready to compare plans and see what your premium should look like? Head to the OnePaisa bike insurance hub to compare quotes, review insurer CSRs, and find the coverage that fits your budget — without the showroom pressure.
Insurance & Mutual Funds Editor, OnePaisa Editorial
Sandeep writes on insurance and mutual funds for OnePaisa — term and health cover, policy wordings and exclusions, and fund categories, costs and risk labels. Premiums, sums insured and waiting periods come from insurer policy documents and brochures; fund data comes from SEBI category definitions and scheme documents, and past returns are never presented as a forecast. His guides explain how a product works and what it excludes — they are not advice.
Work published under this byline follows OnePaisa’s editorial standards — how our guides are researched, fact-checked against primary sources, and corrected.