Impact of New GST Rates on Two-Wheeler Insurance Premiums

🚦 What’s Changed in GST?

Here’s the new GST structure for vehicles:

• Above 350 cc bikes (like Royal Enfield 650, Harley, superbikes) → 40% GST

• Below 350 cc bikes (like Splendor, Activa, Pulsar) → 18% GST

• Electric bikes (EVs like Ola, Ather, TVS iQube) → 5% GST

👉 Everyday two-wheelers and EVs now look more affordable compared to luxury bikes.

💡 How Does This Impact Insurance Premiums?

Remember, insurance premium = Base Premium + GST

Example:

• Base premium = ₹5,000

• GST @18% = ₹900

• Customer pays = ₹5,900

Now, if GST is reduced further, the total premium also goes down. So, lower GST = lower insurance premium.

⚠️ But one thing to note: third-party insurance premium doesn’t change. It’s fixed by IRDAI. Only the own-damage portion gets affected by GST.

🎯 What Agents Should Highlight While Selling

• Affordability angle: “Sir, your insurance premium is lighter now because of GST changes.”

• EV advantage: “EVs have only 5% GST, so both the bike and insurance are cheaper.”

• Upsell opportunity: “You can use the GST savings to add zero depreciation or roadside assistance cover.”

• Long-term policies: “With lower GST, long-term policies save you even more in the future.”
  

📍 Other Factors That Still Matter in Premiums

• City / location (big cities = higher risk = higher premium)

• Daily use vs occasional use

• Add-ons (zero dep, engine protection, roadside assistance)

• No Claim Bonus (NCB) discounts

• Anti-theft devices

• Policy tenure
  

✅ Final Take

The revised GST rates don’t just make bikes cheaper – they also reduce the insurance cost. For agents, this is a golden chance to talk affordability, promote comprehensive policies, and encourage EV adoption.

So next time you’re with a customer, remember: lower GST = lower premiums = easier to sell.