Learn about the No Claim Bonus (NCB) in bike insurance, a discount for claim-free years. To save on premiums, be aware of their calculation, advantages, and transferability.
If you own a bike, you must have heard of the term "No Claim Bonus" or NCB. But what exactly is NCB and why is it important for your bike insurance?
In this article, we will explain everything you need to know about NCB in bike insurance, including what it is, how it works, and why it is beneficial for you.
What is NCB in Bike Insurance?
NCB stands for No Claim Bonus, and it is a discount that is offered by insurance companies to policyholders who do not make any claims during the policy period. In other words, if you do not make any claims on your bike insurance policy, you are eligible for a discount on your premium when you renew your policy.
NCB is a reward for safe and responsible driving, and it encourages policyholders to drive carefully and avoid accidents. It is also a way for insurance companies to incentivize their customers to renew their policies and maintain a long-term relationship with them.
How Does NCB Work?
The NCB is calculated as a percentage of the own damage premium of your bike insurance policy. The percentage of NCB increases with each claim-free year.
For example, if you have a bike insurance policy with an own damage premium of Rs. 10,000 and you have not made any claims for 3 consecutive years, you will be eligible for an NCB of 35%, which means you will get a discount of Rs. 3,500 on your premium when you renew your policy.
It is important to note that NCB is only applicable to the own damage premium of your bike insurance policy and not on the third-party liability premium.
How to Avail NCB?
To avail NCB, you must renew your bike insurance policy within 90 days of the expiry of your previous policy. If you do not renew your policy within this time frame, you will lose your NCB and will have to start from scratch.
When you renew your policy, your insurance company will automatically apply the NCB discount to your premium. You do not have to submit any documents or make any special requests to avail the NCB.
NCB in Case of Bike Insurance Claim
If you make a claim on your bike insurance policy, you will lose your NCB for that particular year. However, you can still avail NCB in the following year if you do not make any claims.
For example, if you have a bike insurance policy with an NCB of 35% and you make a claim in the current year, your NCB will be reduced to 0%. But if you do not make any claims in the following year, you will be eligible for an NCB of 20% when you renew your policy.
NCB Transfer in Bike Insurance
If you sell your bike and buy a new one, you can transfer your NCB to your new bike insurance policy. To do this, you must provide the NCB certificate from your previous policy to your new insurance company. The NCB certificate is valid for 3 years from the date of expiry of your previous policy.
If you do not have an NCB certificate, you can still transfer your NCB by providing the policy document of your previous bike insurance policy. However, in this case, the NCB will be calculated based on the information provided in the policy document, and there may be a slight difference in the NCB percentage.
NCB in Multi-Year Bike Insurance Policies
In recent years, insurance companies have started offering multi-year bike insurance policies, which provide coverage for a period of 2 or 3 years. In such policies, the NCB is applicable for the entire policy period.
For example, if you have a 2-year bike insurance policy and you do not make any claims during this period, you will be eligible for an NCB of 25% when you renew your policy after 2 years.
How is NCB for Two Wheeler Insurance calculated?
Now let’s see how to check NCB for bike insurance. NCB is available to you if you have not filed a claim for a year. The NCB discount from the previous year will be applied to the premium for the following year. As a result, you will be able to carry over the discount from Year 1 into Year 2. The amount of money that can be saved by accumulating discounts over time is huge. The premium calculator will do the calculation on an annual basis throughout the length of the insurance.
The table below shows how the eligible discount amounts are broken down by the number of years:
| Claim Free Year | Applicable No-Claim Bonus(NCB) |
|---|---|
| After 1 year | 20 |
| After 2 year | 25 |
| After 3 year | 35 |
| After 4 year | 45 |
| After 5 year | 50 |
Now if you wish to sell your existing bike and buy a new one, the accumulated NCB can be transferred to the new bike.
Benefits of NCB in Bike Insurance
NCB offers several benefits to policyholders, some of which are listed below:
Discount on Premium
The primary benefit of NCB is the discount on your bike insurance premium. As mentioned earlier, the NCB percentage increases with each claim-free year, which means you can reduce a significant amount on your premium when you renew your policy.
Encourages Safe Driving
NCB is a way for insurance companies to reward policyholders for safe and responsible driving. It encourages policyholders to drive carefully and avoid accidents, which not only benefits them but also reduces the number of claims for the insurance company.
Transferable
As mentioned earlier, NCB is transferable, which means you can transfer it to your new bike insurance policy if you sell your bike and buy a new one. This way, you do not lose your NCB and can continue to avail the discount on your premium.
Long-Term Savings
If you maintain a claim-free record for several years, you can avail a significant NCB percentage, which can result in long-term savings on your bike insurance premium. This is especially beneficial for those who have multiple bikes or renew their policies for several years at a time.
Conclusion
In conclusion, NCB is a discount offered by insurance companies to policyholders who do not make any claims during the policy period. It is a way to reward safe and responsible driving and encourage policyholders to renew their policies and maintain a long-term relationship with the insurance company.
If you have a bike insurance policy, make sure to maintain a claim-free record to avail the benefits of NCB. And if you are planning to buy a new bike, do not forget to transfer your NCB to your new policy to save on your premium.
