No Claim Bonus in Two Wheeler Insurance

Understanding NCB in Bike Insurance

No Claim Bonus is a reward offered by your motor insurer if you do not raise a single claim during the policy tenure. In simple terms, it is a saving on the premium offered by the insurance provider for riding your bike responsibly and maintaining it in good condition. All you need to do is to find the bike insurance plan that offers suitable NCB to save on premiums.

Now that you know what NCB is in two-wheeler insurance, let us discuss more about this insurance jargon to make the most of it.

How Does NCB Works?

The NCB is a reward that can range from a minimum of 20% to a maximum of 50%, with an increase in every consecutive claim-free year. Hence, it is an accumulated bonus and will help you to save huge on premiums. However, you can get these savings during policy renewal.

Moreover, NCB in two-wheeler insurance is only applicable to own damage premiums and not to third-party premiums. Make sure you have a comprehensive bike insurance plan or standalone own damage cover to avail benefits of NCB.

How is NCB Calculated in Bike Insurance?

The No Claim Bonus for your bike starts with the first renewal of your comprehensive bike insurance policy. A savings of 20% is granted on successfully renewing your two-wheeler insurance policy after the first claim-free year. Every consecutive claim-free year, the bonus percentage increases by 5-10% during renewals.

The following table shows how to check NCB in bike insurance based on the number of claim-free years-

For instance-

As a bike owner, you get 20% NCB after your first bike insurance renewal for not raising a claim. You decide to retain it and not use it. Then after the second claim-free year, your percentage increases to 25%. Similarly, the NCB increases to 35% and 45% after the third and fourth claim-free renewals. Ultimately, you get 50% NCB after five consecutive claim-free years. Now, you decide to use the NCB savings on your premium amount and pay only half the amount. Thus, you will receive higher savings on your premium by accumulating and using the NCB after five consecutive claim-free years.

Note- the NCB will not increase after five consecutive claim-free years. Thus, you should use your NCB after the fifth-year bike insurance renewal and restart your NCB cycle from the next renewal.

Benefits of NCB in Bike Insurance

No Claim Bonus (NCB) in bike insurance offers the following benefits to the policyholder-

• It helps to reduce the premium amount from a minimum of 20% to a maximum of 50% if the policyholder does not raise a single claim in the policy period.
• It is granted solely to the policyholder for prudent use of their bike and, thus, remains with them irrespective of whether he sells his bike or changes his motor insurer.
• It can be easily transferred from one insurer to another or from one bike to another in case you decide to change your bike or your insurance provider.
• It acts as compensation or reward for not using the motor insurance facility in the policy year despite paying the premium.
• It encourages bike riders to drive their bikes safely.

Some Popular FAQs Related to NCB in Bike Insurance

To guide you in this, here are some popular FAQs related to NCB in two-wheeler insurance that you should not miss.

1. Can I Use the No Claim Bonus on Two Different Bikes?

   No, it is not feasible to use the acquired No Claim Bonus on two different bikes at the same time. However, if you sell the older bike and buy a new one, you can transfer the NCB earned on your old bike to the new one. This is because NCB belongs to the policyholder, not the vehicle, and thus, NCB remains with them.

2. How is NCB Transferred to Another Bike?

   NCB in two-wheeler insurance can be transferred or retained with you if you replace your existing bike with a new one or even if you want to change your current insurance provider when the renewal is due.

   Transfer of NCB is an easy task. Let us understand this with the help of an example-

   Suppose you bought an Activa 5G scooter in 2018 and the premium you pay is Rs. 18000. Out of the total premium, Rs. 15000 goes towards your own damage cover. If you have not raised a claim in your bike insurance so far, you can claim 45% NCB during policy renewal. If you decide to switch the insurer on the same premium and use your NCB acquired with the previous insurance, you will receive a discount on your two-wheeler's own damage premium, and that is a great deal.

   However, if you want to transfer your NCB to your new two-wheeler, then you will be required to submit Form 29, 30, accompanied by the application requesting for transfer of the NCB addressed to the existing insurer. Based on this, the insurer will issue an NCB certificate with a validity of three years. You have to submit the certificate to the new insurer so that you can avail the benefits of NCB.

   If you buy two-wheeler insurance online, there is no need for this NCB certificate, as a declaration would suffice. However, do not hide any circumstances under which a claim was raised, as the new insurer will verify every detail with the previous insurer. At any point, if it finds you guilty, the insurer can reject your application.

   You may like to read- How No Claim Bonus is Calculated in Bike Insurance?

3. Can I Get NCB on Third-Party Bike Insurance?

   No Claim Bonus is only associated with own-damage or comprehensive bike insurance policy. Hence, you cannot avail it if you own a 3rd party two-wheeler insurance only, irrespective of how many claim-free years you have.

4. When is the NCB Terminated?

   Your NCB in bike insurance is terminated in two scenarios explained below-

   1. First, when you raise a claim during the policy tenure.
   2. Secondly, if you do not renew your bike insurance before the expiry date and miss the grace period in your bike insurance policy.

   Either of these incidents will lead you to lose your NCB and turn the acquired NCB into ZERO.

5. Can I Make a Claim and Retain my NCB?

   Yes, you can retain your NCB in bike insurance despite raising claims if you have No Claim Bonus (NCB) Protection as an add-on cover. With this cover, you can make insurance claims up to the number specified by your insurer without losing your NCB.

   However, you need to check with your insurer if they offer this add-on cover during the purchase of a bike insurance policy, as not all motor insurers offer it. Besides, you must go through the terms and conditions of the policy carefully.

6. How long is NCB Valid in the Case of Two-Wheeler Insurance?

   The NCB in two-wheeler insurance is valid for two years. It means that your NCB expires in two years. So, if you are off the road for any reason and have not possessed a policy for more than 2 years, you will have to start from the beginning and earn NCB again whenever you take a bike insurance policy.

Getting the Most Out of NCB in Bike Insurance

While buying your bike insurance policy, you never back down when negotiating for savings. Here the insurance aspect seems to take a backseat. However, it is somehow possible to save on the premium offered by utilizing the NCB in the right manner. Here are certain things to follow to get the most out of your NCB benefit-

• In case of selling the old vehicle, ensure that only the ownership is transferred and keep a copy of the new entry in the RC book for future reference.
• After receiving the delivery note, send a copy of the same to the insurance provider. Based on this, the insurer will issue an NCB certificate with a validity of 3 years.
• This certificate has to be sent to the dealer from whom you are planning to buy your new vehicle. They will process the transfer process with the new bike insurer.
• If you are buying two-wheeler insurance online, do not ignore checking the various available add-on covers and comparing them. For better insights and comparison, you can visit Policybazaar.com & find the right bike insurance policy for you.
• While switching the policy, the existing insurer will provide proof of no claims at the end of the term or during the bike insurance, which you have to show the new insurer.
• It is advisable not to switch your insurer unless it is necessary. Remain with the same insurer and not claim your insurance so you can earn as much NCB as possible.

The Final Words!

There you have it - one of the most crucial aspects of two-wheeler insurance is the NCB benefit. It is the element that helps in reducing the own-damage policy premium. It also makes you a skilled driver by enabling you to master the skill of riding safely and not raise claims for minor damages. In turn, it helps to earn more credibility and rewards from the insurer.